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No Debate: Both Men are Economically Ignorant
Posted By Don Boudreaux On October 17, 2012 @ 9:48 am In Seen and Unseen,Trade | Comments Disabled
Here’s a letter to the Wall Street Journal:
Yesterday’s presidential debate further exposed Messrs. Obama’s and Romney’s economic illiteracy (“China a Punching Bag in U.S. Presidential Debate ,” Oct. 17). 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.
Given their economic pronouncements, Mr. Obama and Mr. Romney should agree that such policies would be positively wonderful for the economy.
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030
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