“I am thinking that your music career actually might be distracting you a bit. I read your article on ‘The Trouble with Tariffs’ [see article below], and I do not see the level of excellence I have come to expect from you, or maybe I just have a slightly different view on the subject.”
That was the first paragraph of an email I received from a thoughtful and very smart friend who takes ideas seriously. Now, coming from someone I didn’t know, I might have quickly filed this email into the trash bin of insults (fortunately, I receive very few).
Yet my friend, who I will from here on call “NP,” went on to deliver a thoughtful critique of my ideas on tariffs. Unfortunately, while his comments were thoughtful, they also demonstrated a major flaw in his thinking. That flaw is a failure to think in terms of principles.
Let me demonstrate.
NP writes, “I understand the libertarian, free-market notion that ‘tariffs are really import taxes, eventually paid by the U.S. consumer.’ While that is true, it is an oversimplification of the entire concept.”
First, let’s be clear. Tariffs aren’t just taxes “eventually” paid by U.S. consumers. Tariffs are paid directly by the American companies importing goods. Yes, those added costs tend to get passed on to the consumer in the form of higher prices, but that’s just a negative consequence.
The real harm here is that tariffs are punitive governmental acts of force placed on citizens engaging in the pursuit of happiness.
NP, are you an advocate of government penalizing citizens for engaging in the pursuit of happiness?
Now, I know NP is pro-free market. In fact, he grew up in an Eastern European country, and he knows firsthand the evils of collectivism. So, NP, I ask you: What is the difference between government penalties via tariffs and government controls imposed on citizens?
If you think in principles, you know the answer is there is no distinction.
NP goes on to acknowledge, “Yes, tariffs are taxes on the U.S. consumer, but only when looking at the economy as a static system, which it is not, The static vs. dynamic economy distinction is exactly the same argument we use when trying to counter liberal arguments that supply-side economics is a dynamic model of the economy that results in increasing the overall pie and benefitting everyone, while the divide-the-pie-in-equal-slices-for-everyone collectivists’ economic modes is static and inaccurate.”
Unfortunately here, NP is mixing up concepts. Yes, the economy is a dynamic system. And yes, companies and economies will always adjust to government intervention in order to survive and ultimately thrive. But, again, think in principles. Just because companies and economies adjust to wrongheaded interventions by governments doesn’t mean those interventions are somehow ok.
Tariffs remain punitive government edicts on Americans, and whether some outcomes for some companies or some industries turn out to be positive matters not. NP also points out that tariffs will “generate some revenue for the federal government that can be used to pay down debt and to collect less money from the people.”
The problem here is that tariffs collect money from American companies up front, so even in the off chance that money could be used to “collect less money from the people,” the government is simply collecting more from other people, first.
I ask you, NP, what is moral about that?
Principally, taxation is theft. One can cloak tariffs in some kind of supply-side dynamic model theory, but “A is A.” Tariffs are taxes, and taxes are inherently theft — and theft is immoral.
Now, NP did correctly point out to me that the United States is among the countries with lowest average tariffs. While this is true, does that mean that just a little bit of theft is ok?
Apparently, NP thinks it is, because he writes, “Therefore, a few tariffs here and there for a limited time might not be overly detrimental in the short run and could prove significantly beneficial over the long term.”
Allow me to point out here, again, the failure to think in terms of principles.
The principled mind sees tariffs as poisonous. And a few “here and there” are just as immoral as someone coming into your house and stealing a few items “here and there.”
Finally, I will employ a quote from a maestro of principled thought that I know NP has read, novelist Ayn Rand: “In any compromise between food and poison, it is only death that can win. In any compromise between good and evil, it is only evil that can profit.”
From a principled viewpoint, tariffs are poison, and I know NP knows this. However, fear not, my friend, as I have just administered your first curative dose of the Jim Woods’ principled-thought antidote.
Love you.
**************************************************************
1,000 Graves
You can dig a thousand graves
But you’re never gonna bury that ghost
Floats up from the ground and a caution hangs
Hangs in your hair like a Jesus stone
–Ruston Kelly, “1,000 Graves”
We all have ghosts that haunt our lives. Some are of our own making, and some descended upon us through no fault of our own. And while we can try to bury our ghosts in “1,000 Graves,” the better strategy is to recognize the world is how it is, and no amount of wishing will make things different. Accept the truth of your existence, because it’s the only way to keep from digging 1,000 graves.
Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.
In the name of the best within us,
Jim Woods
