Tariffs The dictum preached by professors since the 1960's is that the "lowest cost producer" should be rewarded with everyone's business. And within a range of activity there is truth in that. But if you examine the past 50+ years what actually has happened is that "you imported the metals (or cars or whatever product...) and you exported your jobs..." Ross Perot had it right... "We have got to stop sending jobs overseas. It's pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,...have no health care —that's the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south. ...when [Mexico's] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it's leveled again. But in the meantime, you've wrecked the country with these kinds of deals." - (Wickipedia). Any monkey can extrapolate that if you raise the cost of an item with a tariff that you will increase the cost of that item to the consumer. “Thanks oh wise and humble professor...” But if you look at the second order effect of exporting our jobs you will also increase our unemployment....which leads to third order effects of family stress, violence, drug addiction, increased welfare costs, increased health costs, increased mental health costs, polarization in politics and class warfare etc etc. Take away the jobs and look out for the long term consequential and collateral effects! From Wickipedia: “The Moynihan Report generated considerable controversy and has had long lasting and important influence. Writing to Lyndon Johnson, Moynihan argued that without access to jobs and the means to contribute meaningful support to a family, black men would become systematically alienated from their roles as husbands and fathers, which would cause rates of divorce, child abandonment and out-of-wedlock births to skyrocket in the black community (a trend that had already begun by the mid-1960s), leading to vast increases in the numbers of households headed by females and the higher rates of poverty, lower educational outcomes, and inflated rates of child abuse that are allegedly associated with these factors.” All of us have been paying a tremendous "hidden" premium in these pervasive second order and third order costs! Sugar can improve the taste...or too much sugar can ruin the recipe. Sure, we can buy Chinese products cheaper at Walmart...but what good is that if half of the state of Michigan has abandoned factories and many of their citizens are unemployed or underemployed? For the past 50 + years the citizens of our country have been drinking the kool aid promoted by weasel politicians who are puppets of corporate lobbyists and naive college economics professors! We don't want to cut off all trade...and we don't want to establish a monopoly. The best situation is a "recipe" that protects our security and protects our jobs within a common sense range. But what about our domestic exporters? If their costs go up due to the tariffs won’t their sales drop? Won’t we lose domestic jobs from this action? Yes, and that is where the various interests have to be balanced to determine the right “recipe” for the country as a whole. When 70,000 steelworkers lost their jobs in the 1960’s to Japan...and textile workers....and autoworkers...and appliance makers etc etc ...the choice was made to abandon our industries and jobs. What are the long term effects for our country? “Well everyone will just need to go to college and they will have even better jobs than the ones that were exported...correct?” Well that doesn’t seem to be happening . The reality is that education keeps getting more dollars and more teachers with little improvement. Big city crime, death in the ghetto, and the opioid crisis continues. And, by the way, many college graduates can’t find a job that allows them to pay off their education loans... The unfortunate history of thinking that a "little bit of foreign competition is good...so even more must be better" is naive and dangerous. This applies to immigration and government regulations and foreign ownership of production as well. (Remember when we were afraid that the Japanese were going to buy so many factories and so much real estate that we would eventually be a subsidiary of Japan?) A balanced tariff policy can be a part of the “recipe” to prevent further economic cancer that has been consuming our productive economy and our nation. Remember the second and third order long term social costs that occur from the loss of jobs! Ford had an ad saying “Safety is Job One” and another saying “Quality is Job Number One”. Now we should say that “Jobs are Job Number One” - John Doyle
Hey Ed, glad to hear you are doing well. Myself and the rest of the family are still in the business, though in separate companies. Last time I saw you was at a variance meeting in Buffalo Grove. Thanks for your contributions to the industry.
Chicago Sign and Light Company