Drudge Retort: The Other Side of the News

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DarkVader

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Tariffs are not a bad tool to discourage outsourcing of manufacturing.

But they've got to be set up and targeted carefully. You can't just slap a new tariff on something and not expect it to fail. You've got to have a long term implementation for things that don't currently have domestic production, and that's hard to do. You've got to know how long it will take for US factories to be set up and people trained. You've got to target the entire supply chain, not just the final product. And you've got to implement at the right speed. If it will take 10 years to set up US production, you start slowly with a 1% tariff the first year as a "Yes, we're serious" with tariffs increasing very slowly over the next decade, not even hitting 5%, but with a law in place that at year 11 the tariff will jump to 200%. The concept is not that anyone will ever pay the high tariff, the concept is that the US company is essentially being told "If you don't move production to the US, you WILL be put out of business, and somebody else can set up production here." If you want to really make it hard for them to say no, if progress has not been made by year 5, start voiding their patents.

Now, for something that hasn't yet been outsourced, you absolutely can use preemptive tariffs to discourage it. And those tariffs can immediately be very high, punitively high.

But in all cases, tariffs and other punitive measures have to be carefully targeted. And we have to be ready to abandon the entire destructive concept of "free trade" as the failure that it is. The WTO must be crushed. If we want to use tariff policy to help some nations develop, then lower tariff policy needs to be targeted to do that, not the current worldwide "no tariffs for anybody" default.

And we do have to get away from the current "inflation bad" idea. Inflation is good, but that's if and only if wages and the social safety net are increasing faster than inflation. Inflation also reduces debt by making debt less valuable. And don't hesitate to revalue the currency as part of that.

All this is ultimately temporary anyway. At some point we'll have a planetary government and do away with all borders entirely. And that's a goal we should be working toward. But until fascist governments cease to exist, it can't happen.

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