So Much for “Draining the Swamp”

In a recent tweet, Alan Tonelson argued that Veronique de Rugy’s warning against tariffs is actually an argument for tariffs.

His argument that downstream tariffs should be approved every time upstream tariffs are approved is weak, both economically and ethically.  But such a scheme would also undermine the supposed goal of the Trump Administration to “drain the swamp.”  Opening up the possibility of protections for downstream industries will increase the lobbying by said industries to get protections.

Furthermore, we run into an issue of who, exactly, are “downstream” industries?  Economics teaches us there are countless unseen connections we may be unaware of.  For example, let’s say a tariff on steel and washing machines causes people to buy fewer washing machines: people use more laundromats.  In turn, they now refloor the old laundry room with hardwood rather than tile.  Tile manufacturers would be injured here.  Would they be eligible for protections?  They’d certainly try.  And subsequently, the hardwood flooring manufacturers would lobby.  As would, then, the distributors, the loggers, the facemask and chainsaw manufacturers, etc etc.  There is no logical stopping point here.

Rather than drain the swamp, this scheme would vastly increase it.

One thought on “So Much for “Draining the Swamp”

  1. Keeping in mind that the end user pays all costs, we, as consumers could proclaim “The Tariff Stops Here”. When everyone in the production chain has been protected, we the consumers will bear the burden of all tariffs – and every other cost imposed by government.

    BTW in Don’s Post on this subject, “An Open Letter To Alan Tonelson” for the first time ever, as far as I know, Don failed to refer to Veronique as “My intrepid Mercatus Center colleague Veronique de Rugy”

    And OT, if you want to appear be fair minded and offer your students some balance to your fierce support of free markets, you might consider assigning this book.

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