Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

Emmanuel Goldstein makes the case for our Scaled Tariff in his blog
Howard Richman, 1/17/2012

On December 14, Emmanuel Goldstein endorsed our scaled tariff in a blog commentary entitled "The case for a scaled tariff." His writing is clear and powerful.

He begins by discussing the American jobs crisis, not only the high unemployment, but also the growing income inequality and the stagnating median income. He points out that the solutions provided by the right (lower taxes and regulation) and the left ("a large federal entitlement for everyone") would not solve the problem.

He understands the classical economic argument against tariffs, but also understands that it does not apply in the United States today. He writes:

[A]ccording to classical economic theory, high tariffs only serve to protect inefficient import-competing industries while inviting retaliatory tariffs that hurt more efficient exporting industries.

The thing is, that theory only holds when trade is fairly balanced. The problem is that the US has a massive trade deficit with a number of developing countries (led by China) who limit their imports. So while we lose lots of jobs to outsourcing and imports from countries with lower labor costs, because of the trade deficit we gain a comparatively tiny number of jobs in exporting industries.

In his final paragraph he recommends our Scaled Tariff as a possible solution. He writes:

One possible solution, proposed by two authors at the American Thinker, is called a scaled tariff (look at the end of the article). In a scaled tariff, the tariff rate for each country is proportional to our trade deficit with that country. Thus the tariff would disappear once trade is balanced. Balancing trade might be one way to preserve our manufacturing jobs and our status as the world's dominant economic power. 

If you wish to make Goldstein's blog a regular part of your daily reading, you can find it here: http://the-individual.blogspot.com/