Jennifer Rubin powerfully exposes the GOP’s hypocrisy on trade and free markets. (Overlook her minor point about borrowing from China. The nationalities of Americans’ creditors are irrelevant.) Here’s her conclusion:
For Republicans who voted for Trump because he said he’d cut taxes, tariffs pose a challenge to their intellectual consistency (to the extent they still care about that). Tariffs are taxes. They are the essence of picking winners and losers. To carry this out, Trump is compelled to spend more money and grow the size of government. Republicans have now become what they abhor — the party of big government, anti-market regulation and big deficits.
First, its loan programs create capital misallocations. Consider the guaranteed loans. They transfer the risk of lending away from private lenders to the taxpayers, which drastically reduces the incentives to evaluate applicants and projects thoroughly or apply proper oversight. These programs privatize gains and socialize losses — in other words, taxpayers bear the downside risk and the companies and the banks that receive the guarantees get the upside benefit. These loans also give an incentive to lenders to shift resources toward subsidized projects and away from nonsubsidized ones, independent of the merits of the projects.