Friday, August 26, 2016


“Don’t tax you, don’t tax me, tax that fellow behind the tree.”
The well-known maxim came from then Senate Finance Committee Chairman Russell B. Long (D-La), who was bluntly explaining the underlying motivation behind tax reform legislation that was then moving through Congress back  in the 1970s.
It’s still true today when it comes to tax – and trade – legislation in Congress.  And the country’s two Presidential candidates – former senator and secretary of state Hillary Clinton and businessman Donald Trump, both of whom should know better – are taking up the antitrade banner in earnest.
Substitute “tariff” for “tax” and you have both candidates’ policies in a nutshell – imposing tariffs on other countries will make life better for Americans by creating new jobs and increasing living standards – without any negative impact here.
Not quite so.
Lower consumer prices for imported goods contributes to more disposable income for Americans – especially poorer folks – and provide US manufacturers with the inputs they need so their finished products can be sold competitively on the world market.  Don’t forget the United States – although it maintains a goods deficit – is the second largest manufacturer exporter in the world.
And recent World Bank statistics confirm what pro-trade advocates have said for a long time – that there indeed is an exploding middle class of consumers in once dirt-poor developing countries.  That now includes China – the world’s most populous nation.
The opportunity for US trade and exports should not be ignored.
But Mr. Trump and Mrs. Clinton ignore that fact and envision a US economy in isolation from the rest of the world.  Globalization is here and well-established.  There is no going back to the decade of the 1930s.
Rhetoric broadcast almost daily from Presidential candidate Trump that suggests a country having a trade surplus with the United States should be enough reason to trigger tariffs is both simplistic and wrong-headed.
And simplistic and wrong-headed is exactly what both candidates’ trade policies amount to – the notion that all trade agreements are bad and all US manufacturing jobs lost over the past 30 years can somehow be regained if we “renegotiate” the North American Free Trade Agreement and kill the TransPacific Partnership.
That kind of thinking clearly does not hold muster with most Americans.  Overall, according to recent public opinion polls, Americans understand that they stand to benefit from trade – both in terms of jobs and lower consumer prices.  Recent polls also suggest that many Americans, who express opinions on trade, support TPP – which our two Presidential candidates would have you believe is not the case.
In sum.  The whole Presidential debate is silly – and woe to the country if the winner in November does not do what is natural for politicians and ignore his or her campaign promises.

Mary and Jim Berger

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