Sunday, September 2, 2018

The book Justin Amash wants Trump to read

On Twitter, Justin Amash offered Trump a free book. Here’s what the president would learn if he read it - Erin Dunne, Beltway Confidential, Washington Examiner:

August 29, 2018 - "On Tuesday, Trump tweeted, 'I smile at Senators and others talking about how good free trade is for the U.S. What they don’t say is that we lose Jobs and over 800 Billion Dollars a year on really dumb Trade Deals… and the same countries Tariff us to death. These lawmakers are just fine with this!'

"In response, Rep. Justin Amash, R-Mich., offered Trump a free copy of an economics book. That book, Economics in One Lesson, by Henry Hazlitt, is ... not very long but chock-full of excellent advice explained simply. I agree with Amash; the president, if he ever took a break from Twitter, would do well to read it.

"The one lesson the book’s title touts is deceptively simple: 'The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all other groups'.... Actions have consequences both in the short and long-term and for groups beyond those directly implicated....

"Even if Trump didn’t get beyond that first introduction, that simple lesson might give him pause before engaging in all out-trade wars with just about every country he can think of. But should the president be inclined to read more than two sentences, he might do well to open to the chapter on tariffs, given his apparently fondness for them.

"That chapter outlines, first in the words of Adam Smith, the inherent benefit of free trade. Quoting Smith, Hazlitt explains, 'In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.' Free international trade makes the production, trade and distribution of those goods possible to the benefit of all.

"But tariffs cut into all of that benefit by making goods more expensive. Sure, a tariff might protect a specific industry and specific jobs, but it does not help the economy overall. Because consumers have to pay more for one product, they necessarily have to spend less elsewhere. As explained in that chapter, 'In order that one industry might grow or come into existence, a hundred other industries would have to shrink. In order that 50,000 persons might be employed in [one] industry, 50,000 fewer people would be employed elsewhere.'

"In short, Trump is wrong; the U.S. is not losing jobs or money by engaging in free trade. On the contrary, free trade is making all products cheaper, creating new opportunities and boosting overall efficiency. Tariffs only restructure the economy and reduce real wages and wealth, because they cause efficiency and production to decline as materials and products become more expensive. In the end, that will hurt everyone, even the industries that the tariffs propose to protect....

"Trump would do well to take a walk over to Amash’s office and take him up on the offer of a free book [or] if Trump is too busy to walk over, there is also a free PDF copy of this very book available online from the Foundation for Economic Education. Happy reading!"

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1 comment:

  1. George,
    I agree in principle, but not in practice. To better understand why, you may want to read my post on the subject: The triple-U of free trade.
    The point I am making in it is that the so-called “Free Trade” agreements are anything but free. They are about harmonizing and cartelizing government intervention in the economy.
    The point of contention between Canada and the US is Canadian Supply Management, not a particularly free market idea. Of Trump can strong-arm Canada into dropping it, the free trade agreement would be a little bit freer. Canada would be a little bit freer.