The US decides to go full protectionist in the 70s

Aug 2014
4,673
Australia
#11
Milk consumption had been decreasing in USA for a long time, so dairy farmers should have adapted to the market long ago. They should have used their lands for producing all kinds of farm products in addition to dairy. Canada puts some 325% tariff on some US dairy products - in place for ages. Far eastern countries that have great trade surpluses have had hefty tariffs on US products for a long time, and are doing pretty well.
There are three issues: depressed milk prices due to oversupply, increased running costs, and tariffs. Farmers were managing to survive until the tariffs - they were the last straw. Tariffs were promoted by this administration as being good for industry. They aren't. In the dairy industry they have accelerated the rate of bankruptcies.
 
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kandal

Ad Honorem
Aug 2015
2,767
USA
#12
There are three issues: depressed milk prices due to oversupply, increased running costs, and tariffs. Farmers were managing to survive until the tariffs - they were the last straw. Tariffs were promoted by this administration as being good for industry. They aren't. In the dairy industry they have accelerated the rate of bankruptcies.
Farming has been a borderline business for a long time, needing subsidy from the government. As a result countries subjected to US tariffs counter-tariff those businesses to punish USA. But in the long run things should work out.
 

Dan Howard

Ad Honorem
Aug 2014
4,673
Australia
#13
Farming has been a borderline business for a long time, needing subsidy from the government. As a result countries subjected to US tariffs counter-tariff those businesses to punish USA. But in the long run things should work out.
Half-arsed and lazy policy (which is a good description of everything this president does). Keynes was right when he said, "in the long run we are all dead". Long term goals are pointless if nobody survives the short and medium terms.

Full quote: "The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."
 
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Dan Howard

Ad Honorem
Aug 2014
4,673
Australia
#14

Code Blue

Ad Honorem
Feb 2015
4,077
Caribbean
#15
Full protectionist? Where does one get such rhetoric?

I haven't checked, but in whatever years this refers to, what country was buying more foreign goods than the "full protectionist" USA?
 

Code Blue

Ad Honorem
Feb 2015
4,077
Caribbean
#16
Modern economies are service economies. Protectionist policies at the cost of service economy for the benefit of chosen industries would yeild a net negative.
What is a service economy? As good are so expensive, in order to save money, maybe I could try to eat, wear, and drive service: and build a house and some rental properties out of it?
 

Code Blue

Ad Honorem
Feb 2015
4,077
Caribbean
#17
Can anyone find a single industry today that is benefitting from the current round of tariffs?
Even the dairy industry is suffering.
How about the steel industry?

A couple ideas.
First, when people want to rebuke tariffs, why don't they use the period of 1787-1913 during which some weak former colonies grew to be the world's economic superpower?
Second, since I am often informed that the federal government has to have money, why "industry" benefits from income tax? How does the income tax benefit the consumer other than reduce the consumer's purchasing power and driving up prices? (And by "industry," I don't mean the "service" economy, like HR and Block).
 

Dan Howard

Ad Honorem
Aug 2014
4,673
Australia
#18
Yep. The steel industry is benefitting from them. Strangely it isn't because of price. Steel prices rose a little immediately after the introduction of tariffs but fell back to the old prices soon after. Tariffs are giving local producers a greater share of the market, which has let them expand their plants and increase output. If tariffs go on for much longer, the steel industry will grow dependent on them and are likely to fail completely if tariffs are later removed. The steel industry had some legitimate complaints. There was clear evidence of dumping by countries like China.
 
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Apr 2019
80
U.S.A.
#19
At the end of WWII Japan and Germany were bombed to ashes and pretty much flattened. The steel industry in japan no longer existed. With low interest loans and help from the American steel industry, Japanese steel industry was rebuilt new. Many people of the era did not know this and perhaps still dont. Steel workers of the US were labeled as “lazy union” guys that sat around all day long on coffee break. The facts are much different. Having worked in a steel mill in the US during that time, I can tell you that the job was dirty, HOT and hard. There was no loafing around. If you did not pull your weight, fellow workers would ensure you did. What was the problem was that Japan had all NEW, MODERN steel production mills with up to date machinery, we had old prewar outdated equipment. For example: soaking pits were a huge pit where ingots, (each ingot made 30 plus cars) were placed to process. We were laborers and would go into the pits with 90 lbs. jack hammers to clear slag from the bottom. There were 4 holes in the bottom we would open them, then drop the slag as we broke it lose in the holes to a “bucket” below the would be removed to empty with a forklift. It would take 4 men in the pit with a “safety man” up top and a “babysitter” on the forklift below. The safety man would insure that no yellow hot ingots were carried over the open pit by the crane. This same job in Japan was done with TWO men and a digging machine and one below. No one would be in the pit but a man would run the machine from above. This is only one example of why the Japanese steel industry undermined the US steel industry. Same with automobile manufactering. Japan, Germany had NOTHING at the end of WWII. The japanese by the late 60’s and into the 70’s were already begining to use robotics in manufacturing while the US were still using semi-skilled monkeys hanging on the ends of wrenches. Had the US hit them with terriffs, it would have come right back around and bite us worse. What needed to be done was total modernization and media to stop blaming the union workers. The hardest jobs I’ve had in life were union jobs. The union helped us to get safety issues resolved.
Today, you hear about bringing back industry but its too late. If it did come back it would be short lived. We needed then, as we need to now, focus ahead and develope.
 

kandal

Ad Honorem
Aug 2015
2,767
USA
#20
Half-arsed and lazy policy (which is a good description of everything this president does). Keynes was right when he said, "in the long run we are all dead". Long term goals are pointless if nobody survives the short and medium terms.

Full quote: "The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."
When USA championed free-trade it was based on the prevailing assumption that the country would continue to produce higher paying manufacturing jobs while the lower paying ones got exported. Some economists supported this theory while others didn't. (I believe this free-trade policy was undertaken because of USA's over confidence in its own economy and prosperity). As time went on, it became clear that USA didn't produce such jobs nowhere in high numbers to replace the jobs exported. But Capitalists kept on exporting all kinds of manufacturing jobs to overseas, since they could make the products a lot cheaper, and they got more profits selling them at the same price as before. They made lots of money while the workers lost jobs and wages. Economic disparity started and wages stagnated or declined. To top it all, USA didn't seem to care whom it was free-trading with. As a result an adversary China became the manufacturing powerhouse and wealthy, and began to challenge USA in all areas. Lots of manufacturing technology had been lost to other countries like China. For example, if USA wants to make iphones in the USA now, it would find that it simply lacks the technology to do it. While all this was taking place the country was being flooded with illegal Latino migrants, taking away whatever jobs available and keeping wages depressed.

Then came Trump, who was able to politically capitalize on all these, and became the President. His opponent didn't even see this coming until the election night.
 
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