Community Preference (Part 2)

So, how am I going to turn back the clock?

  1. Trade embargoes will be needed for countries that do not float their currencies, protect their workers, require environmental protection or that do subsidize exported goods.
  2. Tariffs will be applied to all goods coming from countries outside of our “community”. Our parasitic friends already have huge tariffs so don’t suggest that we would be acting in bad faith (A Jeep Wrangler costs $196,ooo in China because of tariffs!).
  3. Corporate taxes will be lower for companies that employ more domestic workers than foreign ones.
  4. Transaction taxes will be applied to all electronic hiring services where the employee is outside of the community. Taxes must be paid on top of salaries paid to foreign workers. Tax evasion penalties will be enforced by the IRS.

Efficiency 

Economists and many consumers will scream and protest as they see the price of many consumer goods rise. What they have failed to consider is that there are extra costs associated with every pair of blue jeans you buy at Wal-Mart:

  • Food stamps
  • Unemployment insurance
  • The income tax revenue needed to cover Medicare, Medicaid and education
  • Costs associated with higher crime and drug use that come from high unemployment rates

The last I checked Walmart does not cover any of these expenses. We have developed a first world taste for gov’t benefits while the wage rates on offer are falling gradually to third world levels.

Our New Old World

Can you even imagine a world like the 1960’s where an American refrigerator looks different from a German or Japanese one. The foreign one may even be better but it won’t be cheaper since there will be import duties attached to it.  When you travel you’ll see truly foreign cars, odd looking electronics and prices that will vary widely. The ancient system of barter required spice traders to come up with goods to sell into Asia and the Middle East or else the supply of cinnamon and ginger would dry up. So it must be again.

This concept blows up multinationals and forces them to split themselves into regional versions of themselves. They and WalMart will spend endlessly to prevent such a turning back of the clock. We have tested the economic theory of unrestricted, unregulated international trade – and it has almost bankrupted us. As extreme as our current mis-allocation of wealth is – we ain’t seen nothing yet. Middle class wages are headed down to Chinese levels and profits, for a while will enrich the owner class spectacularly. Our peasants may get very angry.

The 1950’s were not a golden era because we had high taxes on rich people (as many Dems like to argue). They seem great in hindsight because the rest of the world had successfully blown itself up [with our help]. The ROW produced almost nothing. Until they rebuilt themselves they simply could not compete with us. When our trade account was in surplus, life was good. Savings were directed back into domestic investment. If there was demand for a new product, we figured out how to make it here. There was no other choice. Profits correlated positively with wages.

It was of course not as prosperous a time for the super rich. Their money did not go as far becausestuff was not made by third world peasants. Taxes were higher, yachts were more expensive, and gardeners had to be paid (at least) the minimum wage. I’m not arguing that we need to raise taxes back to the levels of the 1950s or 60’s, but if we do not block access to our markets from mercantalist parasitic countries outside our community, then we will devolve into a stratified economic structure that only an ancient Roman would recognize.

Roman-slave-market
A Roman Slave Market

Acuras would still be sold in the US at the same price since they are made here. Tesla would no longer need government loans since most Japanese hybrids would jump up in price. Yes, we would have to learn how to make TV’s again or buy them at much higher prices. Our spending would probably decline and so we would save more. That savings would go into building domestic production capacity – exactly the way economic text books say it’s supposed to.

This would end the leap-frog multinational game of moving production around the world to find cheaper labor every time a country sees an increase in wages corresponding to productivity growth or sales. They might actually be forced to become more efficient with the existing labor pool which would mean higher wages and profits.

It’s time to wind back the clock.

 

 

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