Friday, May 4, 2012

Tariffs are an American Tradition



Remember George Washington, Thomas Jefferson, and John Adams? They all favored tariffs and made sure the U.S. had stiff ones. Now, in the spirit of honoring our nation's founding daddies, let's look at today's situation. Just as back then our industry wasn't directly competitive with Europe, today we're not competitive with China.



The RRR (Rich Republican Right-wing) solution is to impoverish American workers, who they believe are overpaid, as evidenced by their efforts to get rid of the paltry minimum wage law we have today and reduce the minimum to $0.00 per hour.


A saner solution would be a minimum tariff of 25% to 30% on all imported goods and services. From the government's perspective, this tax would at least partially make up for taxes lost when work is done elsewhere instead of here. For workers, there would be some screaming fomented by the RRR crowd about paying twice as much for 1Pads.


Except this is patently absurd, considering that intellectual property, mostly patents, is a large share of an iPad's value. In fact, most estimates claim the manufacturing labor portion of an iPad's retail price is about $10. Fine. Multiple that by four if the things are made in the USA, plus $0.001 for a "Made in the USA" sticker on each one. Big deal. In return for the assembly labor benefiting fellow Americans, we pay $40.001 more for an iPad.


I know, the world is flat, free trade is our religion, blah blah blah.


Except free trade is ruining our country. We sell so little to the major exporters that losing some of those sales won't hurt us enough to notice.


So why aren't we setting up tariff barriers? They were good for the founding fathers, and they're good enough for me.

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