Tariffs

What I expect to hear from free market economists: Dear Leaders of other countries, your smart move here is to eliminate your tariffs and not retaliate with even more. If our leader is threatening to injure us because you are injuring your citizens, it’s even dumber for you to injure your citizens even more than you are already.

Strangely, they only focus their criticism on our leader.

Also, they tell us tariffs are taxes that just raise prices.

That makes me wonder, don’t all taxes just raise prices? Why the special vigor for tariffs over all other taxes?

Some say, tariffs are more distortionary than other forms of taxation.

Then I wonder, are they more distortionary than a 7,000 page income tax code or property and sales taxes that can vary widely from one locale to another?

I mean, I can buy the same bag of coffee at store A in my town and pay a few points lower sales tax rate than store B because Store A is not in a special TIF zone that has a higher tax rate. Why don’t economists cry about that? Is that not distortionary?

For the people or despite the people?

Democrats, like Elizabeth Warren, are pointing out that nobody elected Elon Musk. This is propaganda sound bite meant to try to reduce his influence over their plans.

They’re don’t realize that what Elon is saying is what many people think.

And since politicians stopped listening to these people long ago, they like having a representative of their voice that politicians are listening to.

Politicians, in general, corrupt or not, seem to see their job as pulling and pushing people the way the politicians and their monied interests want them to go, rather than serving the people.

Now, who knows? Maybe those politicians are taking us in a good direction, but we don’t know because they stopped trying to convince us.

Rather, their public relations folks deemed it better persuasive strategy to not only avoid answering critical questions, but to keep those questions from being asked in the first place, to prevent ‘platforming’ concerns, fearing that might cause their base supporters to question it, too.

If Elon stops saying what many of these people are thinking, they will cast him aside.

As long a he is saying what they think, politicians might want to try to address the concerns he’s raising rather than sound biting their way out of it. That rings hollow now.

It’s not a mandate

When either side wins the election, they like to tell us they have a ‘mandate’ so they can run hog wild implementing their agendas and ‘dunk’ on the other side.

After all, ‘elections have consequences,’ one President told us.

They should implement their agendas, but I think they (and us) would be better served if they didn’t try to sell us the mandate BS. All that attitude seems to do do is harden the opposition so they will hate everything you do, even it turns out good, and will work harder to limit your power the next time around, as early as 2-years down the road during the mid-terms. Few people like sore winners.

Plus, I see the vote counts and did pretty good in 5th grade math. I know that the national elections fall roughly 50/50 plus or minus a few points. Those elections are basically decided in the margin of error.

I know, the electors map looks like a convincing case for a mandate, but I also know that even in the reddest of the red states, there is a fair chunk of blue voters. And in the bluest of the blue states, there is a fair chunk of red voters there, too.

Why not try to bring some of your opposition along?

‘Hey, we won, but I noticed a lot of you disagree. Rather than dunking on you and running hog wild with our agenda, how about we hold some Q&A sessions so you can learn why we think this is the best way forward? For the most part, we want the same outcome, a better life for all of us. We disagree on how to achieve that. Let’s talk. Maybe you can gain a better understanding of why we think ours is a better way.’

Maybe I’m wrong, but I feel like if just 5-10% of these folks were convinced that you aren’t so bad then maybe you could implement your agenda without all the kicking and screaming and might not only have 2-years to implement your agenda and for the results to demonstrate that it was good.

My first rule of politics

Discussion about the politicians’ characters dominates political discourse.

I think that’s a waste of time.

I assume all politicians aren’t good people. I assume they are all class A narcissists. That’s my first rule of politics.

What you know about politicians’ characters has been filtered through media. Those filters are deliberately managed for marketing appeal to fool you.

Since I believe they are all goons, being a goon doesn’t disqualify them from my vote. Nor does it interest me to entertain who might be the bigger goon.

Rather, I compare their policies and choose the candidates with the policies that better fit what I believe government should do.

I will often interrupt “who’s the bigger goon” debates by asking what the folks involved think government should do and which goon better fits those policies.

Some people can’t even start to answer that question. For them, I recommend they spend some time forming thoughts on that before worrying about which goon is slightly less goonish.

Often people will state roles of government that lines up more with the goon they could just never bring themselves to vote for, not realizing they are a perfect example of how well the goon fools them.

By the way, I also assume politicians lie about their policies. But, I’d rather vote for candidates who say they want more of the policies that I want. Then I have something objective to hold them accountable to.

Election results

I’ve seen a lot of takes that I agree with and disagree with. I don’t want to re-hash those. I haven’t seen this one, yet.

Based on the numbers I’m seeing, about the same number of folks voted for Trump in 2024 as in 2020, but about 15 million fewer voted for Harris than Biden.

Of course, X is abuzz with the eyebrow raising that this might indicate there was something amiss in 2020.

But, let’s say it’s legit.

One theory I have for why Biden earned a record number of votes, by a large margin, was that about 15 million folks then couldn’t stand Trump, so they voted against him by voting for Biden, but not really supporting Biden.

Maybe those same folks still didn’t want to vote for Trump, but also didn’t want to vote for Harris, so they didn’t vote. Maybe they were sick of Democrats after four years. Maybe they didn’t like Harris as a candidate. Maybe they are tired of paying high prices for eggs and gas.

If true, that tells me they at least softened their position on Trump. They still couldn’t bring themselves to cast a ballot for him, but they weren’t as passionate about voting against him, either.

I don’t know if that says much, but I think that is different and might have different implications than a lot of the other breakdowns.

Mark Cuban on Living Wage

On X, Cuban wrote to someone named Collin about a living wage:

Collin, let me give you another POV. When someone is not paid enough to live, they use more government services. Housing, Care, Food, etc.

When companies pay less than what someone needs to live a basic life, it’s often the taxpayers that subsidize the difference.

First, credit to Cuban for trying to have discussions. We are short on that these days.

Second, here’s another POV for Cuban:

When people have more government services available to them to supplement their wages, they are less likely to want to learn valuable skills and seek higher paying work.

When folks like Cuban consider the employer/employee/government subsidy scenario, they see that the government subsidy can change the behavior of employers (to pay less), but don’t see how the government subsidy also changes the behavior of the worker (to be less motivated to learn more valuable skills).

In reality, it does both.

They also seem to be able to imagine only one scenario: should the government subsidy be reduced or removed the workers will suffer more.

They don’t consider that, using their own logic, removing the government subsidy would mean employers wouldn’t be able pay less. Since workers wouldn’t have a subsidy to help, they would be less willing to accept lower pay, so employers would need pay more to attract workers.

I will admit, I did a little sleight of word play. Did you catch it? Cuban is talking about a ‘living wage’ while I am talking about paying workers less or more.

Removing government subsidies will result in higher pay, but it still may not meet Cuban’s definition of a ‘living wage.’

That leads to another discussion. Should all jobs have to pay a living wage?

I don’t think so. A simple thought experiment answers this question, by evaluating your own behavior for when you are an employer.

Have you ever hired a neighborhood teenager to mow your lawn?

I think most people have, or for some similar type of work, like babysitting, shoveling snow or raking leaves.

Did you pay them a living wage?

What are the chances you would hire them if you had to pay a living wage? What even is that amount? Who would decide?

My guess is you view that as a win-win. You win in that you don’t have to mow your lawn. The neighbor kid wins in that they earn some money as they learn a marketable skill, along with some other important lessons like the importance of showing up and doing the work consistently, being polite to your customers and doing the job how they want it to be done.

But, that same situation can be framed how Cuban did, with you cast as the employer who doesn’t pay lower skilled workers enough to live on. The kid’s parents are subsidizing your lawn getting mowed. And, it’s possible his parents are working lower skilled jobs, too, and are being partially subsidized by government.

So, in a roundabout way you’re contributing to the problem, not helping. The only way for you to help, it seems to folks like Cuban, is to pay the kid enough to live on.

But, that’s too expensive, so you end up doing the job yourself or buying a robot lawnmower.

Which framing do you prefer? The win-win or Cuban’s?

Economic and political rights first

I just finished reading, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly.

Russ Roberts interviewed Easterly in this EconTalk podcast.

I recommend reading the book and listening to the podcast.

Easterly’s key and powerful point is that the economic and political rights of humans in third world countries are often not considered by experts looking to prove out their prescribed solutions for alleviating poverty and often do so by working with the very leaders of those countries who suppress those rights.

Easterly made the excellent observation that Martin Luther King Jr. didn’t seek to alleviate poverty among African-Americans first. He understood that ensuring that they had economic and political rights came first.

The last half of the book provides a nice description of how the incentives work in a free market (or when people have economic and political rights) to be the most effective pill against poverty. Easterly, though, steers away from using terms that carry baggage in today’s political clime, like markets and capitalism, and keeps the focus on the individuals. Instead of calling it capitalism, he refers it to a people trying to solve other people’s problems.

If it can help just one…

A common political sales tactic is the ol’, “Even if this government action helps just one person, then it’s worth it” snow job.

It seems we are beyond that snow job now with Obamacare. Apparently, if it only hurts 5% of the population, that’s acceptable.

Liberty is the Golden Rule

Why I’m Libertarian is a new Tumblr blog (via Pretense of Knowledge and EconLog blogs) where folks declare why they are libertarian. Great idea.

Here’s why I’m libertarian: Because I believe in The Golden Rule. I believe that’s the true source of liberty.

Do unto others as you would have done unto yourself.

The day we talked about The Golden Rule in church when I was a kid was a clarifying moment. I remember thinking, man, that makes a lot of sense. What a fabulously easy way to test your actions. Would I want others to do that to me? If the answer is no, or even a maybe not, don’t do it.

Lots of libertarians say they are libertarian because of things like ‘limited government’, ‘individual rights’, ‘don’t believe in war’…and so forth.

But, for me the Golden Rule is why all of those things are important.

Update: In another coincidence on this blog, in this week’s episode of EconTalk, Russ Roberts interviews Nassim Taleb about an essay he wrote called, Skin the Game. He also discusses the source of the Golden Rule.

I personally believe that the Golden Rule is a social norm that is responsible for the advances in the standards of living humans have experienced over the last several hundred years. I haven’t finished listening to the EconTalk podcast yet, but I’m hoping Taleb will agree with me.

 

Governmentalism

I’m surprised we don’t hear this word more often. It came out of the discussion on my previous post. I thought it might be original because I don’t recall hearing it before.

But, it is a word and it means what I wanted it to. It means:

the tendency toward extension of the role of government

I think too often discussions in this country go off track because of the “What is it?” red herring. That is, we spend a lot of time trying to fit societies and what people believe into existing -isms like socialism, capitalism, fascism, communism, etc.

But, often these -isms don’t quite fit.

Maybe using the word governmentalism will help keep discussion on track.