On What Does the U.S. Impose Tariffs?

“Where do we have tariffs?” President Trump asked on October 25, 2018.

Ryan Bourne:

One obvious answer is on imported clothing and footwear, where tariffs are both substantial and hit low-income consumers hard.

The United States raised $33.1 billion in tariff revenue in 2017, but $14 billion of that came from tariffs on apparel and footwear alone. These items account for 4.6 percent of the value of U.S. imports, but 42 percent of duties paid. That means while the average effective tariff rate for U.S. imports overall is just over 1.4 percent, rates for apparel and footwear are 13.7 percent and 11.3 percent, respectively.

Read on.

 

Advertisements

Three Widely Believed Economic Fallacies

Steve Horowitz:

The Fallacy of the Zero-Sum Game

The first of these fallacies is the belief that market activities, especially exchange, are zero-sum games. Zero-sum games are those in which the total gained from playing the game is zero. So, for example, if each of five people playing poker buys into the game for $100, there is only $500 to be won.

. . .

We see this misperception of markets in a variety of forms. At the most general level, the belief that the rich get rich by impoverishing others is a species of zero-sum thinking.

 

 

The Fallacy That Order Requires Design

The second fallacy is the belief that economies require someone or some group to design and/or control them. Often this belief is linked to an argument from complexity: only a simple economy could be left to its own devices. Complex, advanced economies like those across most of the globe require human monitoring and regulation to function properly.

. . .

The flaw at the heart of this fallacy is that it ignores the idea of spontaneous or undesigned order.

 

The Fallacy that Consumption is the Key to Growth

The final fallacy is the belief that consumption is the source of economic growth. This belief is widely held by everyone from the citizenry at large up through economic journalists and politicians. We hear it every time the economy enters a recession and begins to recover. Pundits declare that consumers need to start buying things to generate a recovery, and reports about the latest data on consumer spending make the headlines.

. . .

In fact, consumption expenditures vary the least as economies go through booms and busts. The component with the greatest variation is private sector investment. If anything is needed during a recovery, it is more investment by the private sector, not more consumption.

. . .

The heart of the fallacy, however, is that consumption consumes things! When we consume goods and services, we destroy their value by using them up. Consuming food does not create anything valuable, it eliminates something valuable.

Excellent work. Read it.

Amazon Executives Face NYC Protesters and Legislators

“We have a crumbling subway system, record homelessness, public housing that is in crisis, overcrowded schools, sick people without health insurance and an escalating affordable crisis,” said City Council Speaker Corey Johnson, a Democrat.

All those local issues, in one of the highest taxing and spending states in the U.S. Why is that so? And a proud progressive city and state to boot:

State Assemblyman Ron Kim, a Queens Democrat, told protesters rallying on the steps of City Hall before the hearing, ” Any politician in our progressive city and our state who’s willing to had $3 billion to Amazon — that should be a career ender right there.”

It would be funny if it weren’t so sad.

Whole thing here.

2019 Inductees to Rock and Roll Hall of Fame

Inductees: Janet Jackson, Def Leppard, Stevie Nicks, Radiohead, the Cure, Roxy Music and the Zombies.

Eligibility:

Artists—a group encompassing performers, composers and/or musicians—become eligible for induction 25 years after the release of their first commercial recording. Besides demonstrating unquestionable musical excellence and talent, inductees will have had a significant impact on the development, evolution and preservation of rock & roll.

There’s one quantitative datapoint (25 years) plus several qualitative requirements.

Farm Bill Socialism in Senate

 

Republicans have criticized the socialism of Democrats such as Rep. Alexandria Ocasio-Cortez, but they should reflect on their own party’s socialist vote in the Senate yesterday. The upper chamber voted 87-13 for the bloated monstrosity known as the farm bill, which funds farm subsidies and food stamps. Republicans in the Senate voted in favor 38-13.

I’m less worried about the food stamp wealth distribution. After all, it is part of a safety net in a market economy. Its the corporate and industry control that is more worrisome: ” 807 pages of legalese laying out excruciating details on crop prices, acres, yields”. It also pays wealthy landowners who live in a city but qualify for subsidies because they finagle the rules that say they are farmers.

Some Republican hypocrites listed. But it is a bipartisan freak show.