No Debate: Both Men are Economically Ignorant
by DON BOUDREAUX on OCTOBER 17, 2012
in SEEN AND UNSEEN, TRADE
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Each man insists that America’s economy can be harmed by inexpensive imports – in other words, harmed by opportunities for voluntary exchanges that lower Americans’ cost of living.
By promising to raise taxes on Americans who buy Chinese-made goods, Mr. Romney again promised to break his campaign promise to not raise taxes. That he is unaware of the contradiction isn’t promising.
Mr. Obama is no better. He bragged that he “saved a thousand jobs” with his “tough” trade action that – by raising taxes on Americans who buy Chinese-made tires – ensured “that China was not flooding our domestic market with cheap tires.”
By this logic, the President’s policy is inexcusably lame. If creating more jobs in U.S. tire factories justifies forcing consumers to pay higher prices for tires, the Obama administration should also outlaw the sale of used tires (which, like low-priced imports, are “flooding our domestic market”). Indeed, the president should seek legislation mandating that all rubber used to make tires be non-vulcanized. The resulting decline in tire durability will create even more jobs in U.S. tire factories by “protecting” our market from being “flooded” with cheap tire durability – that is, with tires that last for tens of thousands of miles before needing to be replaced.
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It’s hard to imagine that there is any rationale for restrictions?
Do we want to be a nation of tire makers?
In the Sixties were more expensive for a poorer quality. Now they are “cheaper” and more durable.
(Remember that the value of money has been inflated away. Gas is up by a multiple of 100 in dollars but about 50% cheaper in silver. Tires in the Sixties ran about $20 each; some more some less. Priced in gold a tire was 20/35 = 4/7 = 0.57 oz. So today, just recently I paid over 100$ per tire; where as I should have paid over a 1k$ each. SO tires have gotten 90% cheaper. It’s the value of money that obscures our vision.)
I want Americans to have cheap tires so they can spend their money on other needs and wants.
If it means the tire industry has to go to China, all well and good.
If the Chinese are so dumb as to give us tires for worthless green pieces of paper, great!
The market will peacefully decide what gives us the most bang for our buck. With out a politician “helping”.