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PaperclipPerfector  30d ago (text post)   33449 thread views

Culture War Roundup for the week of March 31, 2025

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This will be a dry post: I'm laying out my thoughts over the tariff discussions of the last few days as succinctly as I can.

Dangers to tariffs:

  • Tariffs that are higher than other countries can incentivize domestic companies to move abroad to gain access to cheaper inputs. It has similar negative incentives to a high corporate income tax (the latter of which was reduced in 45's term to be more in line with the rest of the world).
  • Danger of a trade war loss. If you don't have market power (attractive consumer base or exports) then a trade war is likely to end in a loss. Costs will be passed to citizens. The US is rather unique in having outsized market power.
  • Protectionism can lead to complacency in the citizenry. Lack of competition breeds inefficiency and lethargy. The workforce and economy needs to be sufficiently diverse to maintain competition.
  • Less efficient global distribution of resources.
  • Tariffs are distortionary in a way that (flat) income tax and universal sales tax are not.
  • Less foreign investment (assuming trade deficit shrinks). A trade deficit means US dollars go abroad: those dollars have to come back somehow, usually in the form of investment. Losing this foreign injection of capital is a double edged sword: a benefit is that it will make investments cheaper for domestic savers (cheaper stocks, cheaper housing). This will benefit younger generations who are buying the cheaper stocks and housing at the expense of retirees.

Economic/Political Benefits to tariffs:

  • If you are in a position of strength, it can distort the global economy in your favor. Companies may wish to domicile in your country (especially if you have low corporate income tax rates) in order to access your consumers and/or workforce.
  • Supply chains will become more intra-national, improving national security.
  • If you are in a position of strength, it is a useful foreign policy tool.
  • If everyone else is doing tariffs except you, then the economy is already distorted; and implementing reciprocal tariffs may "un-distort" the global economy.
  • If you want to raise revenue and you don't fear a trade war, tariffs may have less of an impact on GDP as other methods of taxation (eg, income tax).

Ideological benefits to tariffs:

  • Less interconnected global economy leads to less systemic risk (anti-fragile). The revealed fragility of supply chains during Covid shocked me, and made me realize we have traded efficiency for instability. I wrestle with this on a more local level here: https://pyotrverkhovensky.substack.com/p/texas-roadhouse.
  • Destruction of the Bretton-Woods post-war hegemony.
  • Reciprocal tariffs punishes other nations for constantly hitting "defect" in an iterative "trade" game. It could force the world towards a better equilibrium.
  • Tariffs are explicitly allowed in the Constitution, income tax had to have an amendment.

Other thoughts:

If you are going to do protectionism, tariffs are better than subsidies.

Tariffs will change the relative cost of goods, but being a tax they should be net deflationary rather than inflationary.

Sanctions are like extreme "reverse" tariffs; if Russia and Iran are any example energy-rich countries seem to weather sanctions well.

Okay, let me try too.

Dangers and downsides to having the US air force firebomb Kansas City:

  • A lot of people will die in agony.
  • A lot of housing and means of production will be destroyed.
  • Refugees will increasing the housing crisis in other cities.

Economic benefits of the USAF firebombing Kansas City:

  • Housing prices in KC will be much lower while it is an uninhabited wasteland
  • It will incentivize other US cities to prefer non-burning building materials and invest in air defense, which will both increase disaster preparedness and be a boon to the some industries.
  • It will open up avenues to redevelop the city.

Ideological benefits (for various ideologies):

  • It will drastically lower the amount of immigrant crime at ground zero.
  • Over a period of a decade, it will likely lead to lower GHG emissions.

In general, firebombing is much more acceptable than nuking because of (a) the lack of nuclear fallout and (b) it does not contribute to the normalization of nuclear weapon use.

In conclusion, there are good economic and ideological arguments both for and against firebombing random cities, and experts in law, strategy and economy disagree if it is net beneficial or not. The fact that every administration before president Harris has refrained from burning down KC does not mean that she is wrong to do so.

This seems needlessly bilious. Yes, it is possible to make a cost/benefit analysis for literally everything. No, nobody is talking about bombing Kansas City, which is why you're using it as a reductio ad absurdam.

The point I was trying to make, unsuccessfully, was that in my world model, an economic superpower trying to fix their trade deficit by applying tariffs proportional to that deficit would be considered a terrible idea by a broad majority -- basically everyone except for "destroy all corporations" radical leftists, and lizardman's constant worth of outliers (some de-growthers, some sourvereign citizens, some fringe isolationists who want to see America 100% autark, even if that means giving up on oil and coffee, et cetera).

Naturally, here at the motte we have a proud tradition of taking fringe ideas far out of the overton window serious, and I am fine with that. I just feel that "starting a global trade war will actually go great" was plenty discussed here already, and I would much rather discuss the next fringe idea, perhaps "legalize marital rape" or "build a sub-aquatic habitat in the Mediterranean Sea for the Gazans". In my mind, the fact that someone has just announced a fringe idea as the national policy of the US should not make it less fringe than if a random poster had posted it here. I am not a fan of the forced neutrality displayed by the original poster. If party A wants the living room thermostat set to 280K, and party B wants it to be set to 680K, setting one's preference to 480 Kelvin is not neutral, but just about as insane as 680K.

I grew up vaguely left-wing and peace-y. Then Putin happened, and suddenly I found myself having to defend the North Atlantic Treaty and mutually assured destruction. Now Trump has taken a turn towards economic authoritarianism, and I find myself holding up the torch for libertarianism -- not because I think taxation is theft, but because I recognize that capitalism leads broadly to better outcomes than all the alternatives which have been tried.

That's the first time I've been accused of being too neutral! Let me try to be less so: Income taxes are bad. We have had them for over a century. Tariffs are bad. We have not had them to this extent for nearly a century. Yet in a world in which Trump EO'd the income tax to zero rather than implementing tariffs there would be the same hand-wringing, from the same people, who are currently saying tariffs will destroy the economy. The hypocrisy irritates me.

Trump EOing the income tax to zero without cutting defence or entitlement spending would be far more destructive than the tariffs - it would be full Weimar/Zimbabwe.

The income tax is a bad thing that we tolerate because the spending it pays for is good and at certain margins it is less bad than borrowing.

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