Donald Trump famously saw himself as gatekeeper to the U.S. economy and happily referred to himself as a “tariff man” — but President Joe Biden has quietly maintained the same stance. Although interrupted by the 2020 pandemic recession, tariff revenues have until quite recently continued to accelerate.
Figuratively speaking, for six years, our government has put rocks in our harbors to keep out foreign-made goods. Now, the tariffs are taking a small bite out of Christmas. Scrooge would be proud. In each instance, the rocks were said to improve the well-being of some Americans or industries, sometimes supplemented by patriotic or even environmental appeals, but at the expense of a lot of other Americans.
While we call the practice “protectionism,” the industries and groups gaining protection are numerically few, highly organized, and politically active. Those picking up the tab are much larger in number, diverse, and less organized, and so most of them — like you and I — quietly pay the cost through higher prices or other means. Put another way, the politics of the matter favor those who know how to play the game.
[DBx: Yes. A more accurate name for what we call “protectionism” is “destructionism.”]
Prosperity without profits? The piece goes on to suggest plans for universal income and canceling international debts and by now readers may be getting the feeling that this is not so much about saving the environment as it is about tearing out the institutions of capitalism root and branch.
Enter American Enterprise Institute economist Michael Strain with a new paper challenging the claim that worker productivity no longer determines workers’ pay.
Strain notes, for instance, that when measuring someone’s pay, it is essential to use total compensation as opposed to only wages. If one fails to include fringe benefits, one fails to capture what is today one-third of workers’ pay. Strain concludes, “When properly measured, with variable definitions based on the most appropriate understanding of the relevant underlying economic concepts, trends in compensation and productivity have been very similar over the past several decades.”
No one disputes the damage – the question is whether it was a price worth paying for a smaller pandemic death toll. But advocates of lockdown seem strikingly uninterested in finding out. A report was published earlier this month by (among others) Chris Whitty and Sir Patrick Vallance, the two gentlemen of Corona, to summarise what they learned from handling the pandemic. What about lockdowns? Hard to tell these things, it says, because so many things happen at once. In this way, the £400 billion question – do lockdowns work? – is breezily cast aside.