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Space Station
I've been creating a lot of backgrounds for my Lord Killian character over on YouTube. I'm particularly proud of this one.

Credit where it's due: the space station model itself is from Glenn Campbell on Free3D.com. I did a lot of remapping, not just changing the logos. The background is an actual nebula where I erased the stars, and made it cloudier with layers of Difference Clouds on top. Showing through is an actual starmap from the Hipparcos data.

I haven't used it in a video yet, but likely will soon. The station slowly spins. In future, I might add flashing lights to make it more interesting. I'm also considering making the middle wheel counter-rotate, but that would mean breaking apart the model.
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So I put it to my Patrons what the next video in this series should be, and they picked tariffs. Tariffs are basically taxes on imported goods where there isn't a corresponding tax on domestic goods, also known as "import duties" or "customs duties." With our new president promising to use tariffs to give us an advantage over other countries like China and Mexico, it's more important than ever for statists who support tariffs to formulate their arguments so they are convincing to reasonable people—which, as usual, is what they haven't done.



By the way, this video will be from an American perspective, but the concepts are universal and apply everywhere. So if you're somewhere else in the world, just replace "America" with your own country and it still applies.

This issue is very much tied in with economics, so fair warning: there's a good bit of economics in this video, but it's important. So here are the things you need to keep in mind if you want to support tariffs:

1. Understand the economics behind it.


In the supply/demand model, increased costs push the supply curve to the left, meaning that producers can't produce as many items of a certain good at each price level as they could before. This increases the equilibrium price while decreasing the equilibrium quantity.

Tariffs are a cost that have to be added to the sale price of the imported good. So the only difference they'll make is in higher prices and fewer consumer goods sold.

The economic data backs this up. According to a 2008 paper published by the National Bureau of Economic Research:
Long ago, Díaz Alejandro (1970) pointed out that if—like the Argentines—you double the price of a machine via trade barriers, then you are placing an enormous tax on investment and accumulation that will depress output. Historical evidence accords with his view...Where those barriers have dropped growth accelerations have been significantly higher than where barriers have remained. Some countries have reaped the benefits. More could yet do so and enjoy higher incomes and lower poverty rates...
Essentially, you need to explain how making things more expensive helps Americans.

2. Learn the Law of Comparative Advantage.


In the early 19th century, economist David Ricardo posited the Law of Comparative Advantage. It's one of the few effects in economics that is accepted pretty much in every school of economics. To see how it works, let's simplify things a bit.

Let's say there are only two people in the world. Let's call them "Adam" and "Steve." They're going to need things to survive. We'll focus on two things: spears to hunt food, and axes to chop wood for fire and shelter.

Adam can make axes more easily than spears, and Steve can make spears more easily than axes. So they decide to have Adam make the axes and Steve make the spears. They then trade an axe for a spear. If that sounds like simple division of labor to you, you're absolutely correct. And if you're thinking you have all of the advantages that come from that, like specialization, you're also correct. But there are two counterintuitive things that Ricardo and others who built on his work observed.

Let's say Adam can make an axe in 3 hours and a spear in 4, and Steve can make a spear in 1 hour and an axe in 2. So Steve can make an axe and a spear in the same time it takes Adam to make just an axe. It may sound as if Steve doesn't need Adam and Adam's going to lose out, and a lot of policies—including tariffs—are made around this misunderstanding.

But it doesn't matter. If they make the trade, then Steve only has to work two hours making two spears; it's still beneficial for him to trade with Adam. By trading, Adam only has to work 6 hours instead of 7, and Steve only has to work 2 hours instead of 3. They both save an hour of labor, and so it's beneficial to make the trade, even if Steve is better overall at making both.

The second is that this doesn't just apply to cavemen making axes and spears. It applies to everyone in a modern economy, and—this is the important part—it applies to countries as well. If Japan is better at making cars than airplanes, and America is better at making airplanes than cars, then both countries are better off if America just makes planes to sell to Japan, and Japan just makes cars to sell to America. So in such a case, putting a tariff on cars hurts Americans.

Now, you might be thinking that it has to be equal for this to work out. If Americans buy lots of Japanese cars but Japan only buys a few airplanes, Americans will lose out. But the next thing you need to do is:

3. Give up the "Trade Deficit."


If America buys millions of Japanese cars but only sells hundreds of airplanes to Japan, you might call that a "trade deficit" and say it's a bad thing. This is just a non-starter of an argument. There is no such thing as a trade deficit.

Let's leave money out of it for a second. If we're trading airplanes for cars, then it just means that we'll trade (say) ten thousand cars for one airplane. Like Adam and Steve before, even if Japan can make an airplane for the same resources it can use to make ten thousand cars or even less, both countries are still better off making the exchange.

But it doesn't even have to be that way since countries are trading in their currencies. When Japanese want to buy an American plane, they need US dollars to do it, which means they'll have to give up some of their Japanese yen for them. And Americans who want to buy Japanese cars will need to give up some of their dollars for yen. And in the real world, of course, this happens across every product both countries trade.

For all the trade that's going on, if Japanese need 1 million dollars to buy American goods, and Americans need 1 million yen to buy Japanese goods, the exchange rate will be 1 dollar to 1 yen. But let's say there's a "trade deficit," where the amount of goods Americans buy from Japanese is more than what Japanese buy from Americans. So Americans need 2 million yen whereas Japanese still just need 1 million dollars. Now the exchange rate is 2 yen to 1 dollar. Any imbalance between trade is adjusted for by the exchange rate. And when government tries monkeying with the exchange rate, bad things happen, like in Venezuela.

But that's not what politicians are actually referring to when they talk about a trade deficit. They look at it after the exchange rate has taken place: where the exchange rate is still 2:1, but Japanese are buying less than 1 million dollars of American goods. You may be thinking, "Then what are they wanting the rest of the money for?" That is exactly the question you should ask—but it's one that politicians and the news media never seem to want to discuss.

There are only two things that can be done with money: it can be spent, or it can be invested. So if they don't want that money to purchase American goods, they must want it to invest in American capital. That means they'll be providing funds for businesses to expand, or for people to buy houses, or whatever. Investment is also known as deferred gratification, meaning in this case that Japanese are going to do less consuming, putting off some of that wealth until a later point in time, so Americans can take advantage of it.

Economists actually refer to a "trade deficit" as "net foreign investment." Because as long as exchange rates are free to fluctuate, any imbalance must be due to more investors in one country investing in the other than is going the other way. So whenever you use the term "trade deficit," understand that we see it for what it is: investment coming from other countries to expand our economy and our businesses, creating jobs and allowing us to produce more and have more for ourselves than we would have otherwise. They're doing without for a little while so that we can have more. You're going to have a very hard time convincing us that this is a bad thing.

In Chapter 6 of Economic Sophisms, Frédéric Bastiat wrote:
The truth is that we should reverse the principle of the balance of trade and calculate the national profit from foreign trade in terms of the excess of imports over exports.  This excess, minus expenses, constitutes the real profit.  But this theory, which is the correct one, leads directly to the principle of free trade...Assume, if it amuses you, that foreigners flood our shores with all kinds of useful goods, without asking anything from us; even if our imports are infinite and our exports nothing, I defy you to prove to me that we should be the poorer for it.
Here's a beautiful refutation of the fallacy: Hong Kong has virtually no natural resources; it imports everything. What it does produce, like integrated circuits, is made with imported raw materials. They have a "trade deficit" of over $400 billion, almost twice their GDP. But Hong Kong is still a very prosperous nation, with the quality of life increasing by leaps and bounds, thanks to free trade, the world's freest market, and zero tariffs.

As the late Marc Allan Feldman said:
I have a trade deficit with my barber: I give him money; he cuts my hair. He never gives me money. Who cares? He cuts my hair.

4. Why do economists across the board believe they're bad?


There aren't many things that economists of every school believe. So when you do get one, it's time to take notice. Every single school of economics agrees that free trade makes a country prosperous and that any kind of tariff makes the nation poorer.

This isn't just economists from 200 years ago, or kooky Austrians working in Libertarian thinktanks or whatever. Economists across the board, from every school of thought, agree that tariffs make us worse off—a scientific consensus of the kind rarely seen in the field of economics.

The Initiative on Global Markets, or IGM, is a research organization that did a survey last year of numerous economists from many different universities and schools of economics. The statement they were asked to agree or disagree with was: "Adding new or higher import duties on products such as air conditioners, cars, and cookies — to encourage producers to make them in the US — would be a good idea." Not a single one of them agreed with the statement or even said they were uncertain; they all answered either "Disagree" or "Strongly Disagree." And this included economists from MIT, Yale, Berkeley, Harvard, Princeton, Stanford, and others across the country. If they couldn't find a single economist to agree, then how can you justify it?

Interestingly, one of these economists was David Autor of MIT, who said: “Taxing consumers to subsidize domestic production is bad economics and a violation of the WTO agreement.” This is interesting because one of his papers, "The China Shock," is being actively misinterpreted as a promotion of tariffs and a refutation of free trade. What the paper actually found was that the labor market is high friction in places like Ohio and Michigan, due to things like unionization and high taxes, and this adversely affects industries where products can be imported from China. The economy can and will improve in the face of such a shock, but only if politicians allow it to and don't tax and regulate everything right and left. This is another example of government causing a problem and pointing the finger of blame somewhere else.

This is also the conclusion of a paper from the St. Louis Fed which found:
China's trade shock resulted in a loss of 0.8 million U.S. manufacturing jobs, about 50 percent of the change in the manufacturing employment share unexplained by a secular trend. We find aggregate welfare gains but, due to trade and migration frictions, the welfare and employment effects vary across U.S. labor markets.
In other words, those job losses were more than made up for by job and wage gains elsewhere. So when they point to the job losses in manufacturing, they're cherry-picking; they hope you look at this and blame it for part of the unemployment we're experiencing, but those job losses happened because that sector was less efficient. The result was that economic resources moved to other sectors that were more efficient, making life better for everyone in the country. You need to look elsewhere for a cause of unemployment, because this isn't one.

Also:
Our results indicate that although exposure to import competition from China reduces manufacturing employment, aggregate U.S. welfare increases."
So the manufacturing sector might get a bit of a boost from tariffs, but the rest of us are worse off for it.

So that means you need to:

5. Explain how tariffs are better than straight-out welfare.


Let's think about this: tariffs make goods more expensive for Americans. If we are as generous to your side as we can possibly be, tariffs increase domestic employment (they don't, for reasons we've covered; at best it might boost a certain sector at the expense of others, but we'll grant it for the time being). But only a part of that additional price is going to go to the workers; the rest is absorbed in other costs of doing business.

That being the case, why would it not be better to simply tax Americans that extra money and pay it directly to those would-be workers? And what is the moral difference?

I'll tell you one difference: tariffs are a regressive tax that disproportionately hurts the poor. That's what a paper published by the Center for Economic and Policy Research found:
Tariffs—taxes on imported goods—likely impose a heavier burden on lower-income households, as these households generally spend more on traded goods as a share of expenditure/income and because of the higher level of tariffs placed on some key consumer goods.
More specifically, the lowest income decile spends over 1.5% of after-tax household income on tariffs, compared to .6% for the second decile and less than .3% for the top decile. The burden is worse on families with children, especially single parents.

This same effect applies to subsidies on exports. Yes, if you subsidize exports, more people in foreign countries will buy the exported goods. But think about what you're doing: you're taxing Americans so that foreigners can have cheaper products. It's exactly the same as if you'd taxed Americans to give money to foreigners so they can buy more stuff. And that helps us, how?

If you understand that, then you also see that you need to:

6. Deal with the arguments against protectionism.


What we hear from a lot of politicians is that all of this is very well and good when there's free trade in both directions, but since foreign countries are putting restrictions on trade from the US, we need to put restrictions on them to stop them from hurting American consumers.

If you understand what I just said about subsidies, you'll understand why foreign subsidies are no reason to place tariffs. Foreign subsidies don't hurt Americans; they hurt the people in that country because they have to pay the taxes that go to the subsidies. It's exactly as if they forced their own citizens to pay for part of the price of the goods that we buy.

Conversely, if they place a tariff on our goods, they're only shooting themselves in the foot, for the same reason US tariffs end up costing Americans.

Politicians may crow about "unfair competition." Through subsidies or tariffs or currency manipulation or whatever, they make their goods so cheap that America just can't compete. But what that really does is allow Americans to have greater purchasing power: our paychecks now go further since many of the goods we buy are cheaper. The costs of all of this don't come from Americans somehow; the burden is placed on the people in that country in the form of higher taxes or inflation. "Unfair competition" really means "prices are advantageous to consumers, not producers," and that is the problem with protectionism: it's really about enriching cronies at the expense of the people.

Tariffs increase the price of foreign goods, meaning consumers will buy domestically. But why weren't they before? It must have been because the domestic goods cost too much. Ultimately, this is price manipulation that makes everyone poorer. Those crony industries may profit more in the short run, but in the long run, our economy isn't as prosperous as it otherwise would have been. "Protection" really means exploiting the consumer.

Prices—including the price of imported goods—convey information about how efficiently resources are being used. They give consumers valuable information about where their earnings would best be spent. And it goes the other way, too: by making decisions on whether or not to buy a certain good, consumers use the price mechanism to communicate information of their own. In this example, they're telling domestic producers not to produce so much of this particular good, and instead to divert those resources somewhere else where they can be put to better use. Insomuch as they are a conveyance of information, prices are a form of speech. And they are the most effective form of speech that consumers have with producers. Tariffs, subsidies, currency manipulations, and for that matter, any form of price control is, in a very real sense, a violation of our freedom of speech.
No, my candidate didn't win. But like all Libertarians, I can still feel good and hold my head high.

Because while the Republicans and Democrats have just faced their worst nightmare—a nightmare they face every four years—we Libertarians exist in a world of our own: one where principles matter, and where who we are is defined by them.

I voted against war and for peace. I voted against hatred, bigotry, envy, and division. I voted for both fiscal and personal responsibility. I voted for sound economics and mathematics. I voted to make America sane again.

My vote means that hundreds of thousands of dollars won't have to be spent in my home state combating Demopublican election-rigging. My vote helps bring about a day where true alternatives to violence, cynicism, and sociopathy will be available to American voters.

My vote was a refusal to play the game the elites want us to play. It was a refusal to choose between the angry demagogue and the corrupt warmonger.

My vote was for building bridges instead of walls, and hope instead of bombs.

My vote was for a people state, not a police state. My vote was for a secure state, not a surveillance state.

My vote was a vote for national defense, not international offense.

My vote wasn't for a lesser evil, and so it wasn't a vote for evil.

My vote wasn't about staving off destruction, but creating opportunities.

My vote was for something, not against anyone. It was about ideas, not personalities.

My vote was a positive step forward in a marathon that will one day reach the finish line, even if I don't see it happen in my lifetime.

My vote helped lay the groundwork for a much better America.

Today, I hold my head up high. And so can all Libertarians.

Because yesterday, we won.
So many politicians, bureaucrats, and pundits are proposing weakening our crypto to allow searches by law enforcement without understanding the issue, that I thought it'd be good to have a quick reference to explain why this is a bad idea. Feel free to copy this and send to politicians, news reporters, or anyone else you think needs to know this.

The Ten Commandments of Encryption Policy


  1. In Applied Cryptography (2nd Ed., John Wiley & Sons, 1996), Bruce Schneier wrote: "There are two kinds of cryptography in this world: cryptography that will stop your kid sister from reading your files, and cryptography that will stop major governments from reading your files." Therefore, anything that allows our government to read our messages will automatically put our crypto into the "kid sister" category.

  2. Anything that allows government to read your message will also allow hackers to read your message. Cryptography is just math, and math works the same for everybody. It doesn't distinguish between good people and bad, or who has a warrant and who doesn't.

  3. When strong crypto is outlawed, only outlaws will have strong crypto. The encryption genie is already out of its mathematical bottle. Weakening our crypto so our governments can read it will only make us vulnerable to hacker groups and terror organizations like ISIS, who will have no hesitation about breaking the law to use strong crypto themselves.

  4. "If you have nothing to hide, you have nothing to worry about" is a very dangerous mantra. Just ask anyone who's had their identity stolen.

  5. When people talk about giving law enforcement authorities access to our data, remember that they're talking about the same law enforcement authorities who illegally tapped Martin Luther King Jr.’s phones.

  6. Terror attacks, mass shootings, and mass hackings are all proof that we cannot rely on laws to protect us. We need to protect ourselves with math. Protecting our data is too important to be left to governments.

  7. Always remember that lawmakers want solutions that are visible, that they can point to and say, "See? It works." But security solutions that actually work are invisible. People go about their lives unaware of the attacks they were protected from. People don't notice the days their house doesn't get burgled.

  8. Don't be caught up in considering how much security you "need." You won't know how much that is until after the worst happens and it's too late. We need to be able to give ourselves every last bit of security that we can.

  9. Before you bring up the founders or the Constitution, remember that they themselves often communicated using ciphers. Thomas Jefferson even invented a wheel cipher for this purpose.

  10. We need to consider the consequences of constant observation. Every bit of human progress began as an idea that most people opposed. The last thing we want to do is make people afraid to express those ideas.
Even before 9/11, terrorism was a huge issue, and fear of Muslims was far from unheard of. If you don't believe me, just look at movies like The Siege and TV shows like early episodes of The Practice. The 9/11 attacks kicked it into high gear, and if anything, the statist woos are even more gung ho about waging war and sending drones to kill anyone who happens to be in the vicinity of someone who might be a terrorist.

Yes, once again, we libertarians are unimpressed, so if you want to defend this policy, here are the things you need to do, and the things you need to stop doing.



First and foremost:

1. Stop giving US interventionism a free pass.


If we define "terrorism" as "the killing of noncombatants for political reasons," then the fact of the matter is, the biggest terrorist group on the planet is the Federal government of the United States of America. One 2012 analysis estimated that the US drone strikes have killed 50 civilians for every suspected terrorist; other estimates put it as low as 9, but that's still pretty bad. 10% is hardly "precision."

Every single one of those innocent deaths results in an alienated family, a new desire for revenge, and more recruits for the extremists.

For one example, look at Somalia in 2005, where drone strikes were used against Somalis resisting the UN provisional government that was run more by Ethiopia than any government of the people. While they did kill the targets, they killed a lot of innocents as well, and the show of force by the Americans radicalized the population and gave the extremists even more power. It all culminated in the Ethiopian military invasion.

People generally don't like militant extremists in their country. But when militant extremists from another country start killing them, the domestic militants become seen as necessary, then likable, then righteous.

In case you're under any delusions that US drone strikes are all about justice and peace and stuff, check out actual Pentagon documents obtained by The Intercept. These papers detailed how the Pentagon, always on orders direct from President Obama, engaged in strikes that were anything but precise. They issued strikes based on information of questionable reliability, and it was even known in many cases that the target wasn't the actual terrorist they were gunning for, but someone using the terrorist's SIM card after the terrorist sold it on the black market. And they issued the strikes anyway.

They also reveal a lot of Pentagon experts saying it's far better to capture suspected terrorists than to engage in summary execution.

What's worse—and there can be few things more disturbing than this—are the terms used by officials when engaging in these strikes. Here are just a few examples:

A "jackpot" is when the target is killed; if they miss the target entirely and kill a completely different person, the term is "EKIA: Enemy Killed In Action." Over a five-month period, US drone strikes killed 155 people in northern Afghanistan. 19 of them were jackpots; the other 136—people they had no reason to believe were terrorists at all—were enemies killed in action. Sound Orwellian enough for you? They must have been the enemy—the US wouldn't have killed them otherwise!

A "touchdown" is when they successfully locate and destroy a target's phone—or, at least, his SIM card. Which, again, has most likely been sold on the black market and bought by a completely innocent person.

And most psychopathically, when innocent children are killed by a drone strike, each child is labelled a "TIT," or a "Terrorist In Training." (Also, "fun-sized terrorists.") And these include toddlers and infants.

This effect of drone strikes radicalizing the population and creating more terrorists has been confirmed not only by pretty much every intelligence expert the US has, but according to a 2012 Pentagon document recently released under the Freedom of Information Act, The Islamic State of Iraq (as it was then) was only able to gain a foothold as a result of the US taking down Saddam Hussein, who for all his faults was actually pretty good at keeping terrorists out of Iraq. The document not only showed that the US has been supporting Al-Qaeda and the Muslim Brotherhood in Syria as part of the resistance against Assad, but also that it would lead to ISI getting a foothold in Syria, which is actually what ended up happening. That's why they're now known as ISIS: the Islamic State of Iraq and Syria, or ISIL, the Islamic State of Iraq and the Levant, into which Syria is their first entry.

Yes, that's right: the US government has been knowingly supporting the Muslim Brotherhood, Al Qaeda, and ISIS in Syria—and they're the only reason ISIS became ISIS to begin with! And the Obama administration was warned in advance by the Defense Intelligence Agency that their policy would help Al-Qaeda and ISIS grow while endangering the US-backed government in Iraq.

And they did it anyway.

The fact is, US interventionism has been creating and supporting terrorists pretty much since day one. And it gets even worse than that once you:

2. Understand how interventionism changed the Muslim world.


It may seem hard to believe, but most of the Muslim world looked quite different in 1950 from what it is now. Far from the radicalized hotbed of Muslim sects that fight both the whole world and each other, most of the Islamic world was industrialized, westernized, and progressive—in the literal sense of the word, if not the political sense. They even had mostly equal rights for women, and were even chilling out about homosexuals. Don't believe me? Here's a speech from Egyptian President Gamal Nasser about his attempt to reason with the Muslim Brotherhood:



That's how much of a joke they were then. But that was all going to change.

The beginning of the end for Nasser came with the Six-Day War in 1967. The US and Israel had entered into a secret agreement: the US would support Israel in waging war against Egypt. By this point, Nasser's aide, Abdel Amer, had become a political rival, assuming ultimate command over the military with Nasser continually trying to wrest control back. Unbeknownst to Nasser, Amer received word from the Soviet Union that Israel was going to launch an attack. Meanwhile, Nasser had been warned by King Hussein of Jordan of the US-Israel conspiracy to wage war. Amer advocated a preemptive strike; Nasser refused.

On June 5th, the Israeli Air Force struck Egyptian air fields and captured the town of el-Arish. After what some present styled a "non-stop shouting match" between Nasser and Amer, Nasser committed the military to the defense of Egypt. It was for naught, and Egypt lost the war—a war of Israeli aggression with American support.

It was the beginning of the end for Nasser, both his presidency and his life. In 1968, Nasser sought to reclaim the lost territories and end the Israeli blockade of the Suez Canal. All-out war resumed in March of 1969. Through it all, Nasser sought peace, his only requirement being a withdrawal of Israel from the occupied territories. Despite the fact that the Soviet Union and eventually even the US backed Nasser's plan, Israel wouldn't budge.

In September of 1970, President Nasser, the man who made Egypt independent of Britain and established social justice and liberal democracy while diminishing feudalistic influence, died from diabetes and arteriosclerosis.

His successor was Anwar el-Sadat. Sadat immediately began reversing many of Nasser's policies. In fairness, it wasn't all bad; he did institute free market reforms and developed a multi-party system. But he also released Muslim Brotherhood prisoners and enlisted their help against his opposition. Ironically, the Brotherhood ended up being key players in Sadat's assassination, due to Sadat signing a peace treaty with Israel. After that, they became a pro-democracy movement and eventually won a plurality of seats in 2005 and the presidency in 2012.

You can't absolve the US of its share of the blame here. It was US interventionism—specifically, their alliance with Israel in its war of aggression against Egypt—that got the ball rolling on all of these events.

Another prominent example is Iran. Things really began looking up for Iran in the Second Constitutional Era which was the beginning of the end for the Ottoman Empire. Iran created a Constitution and a Parliament in 1906, with opposition from Mohammad Ali Shah, who was forced to abdicate in 1911. Full democracy came to Iraq with the fall of the Qajar Dynasty in 1921, and Reza Pahlavi became the first democratically-elected Shah with limited powers checked by Parliament.

Reza Shah immediately set about modernizing Iran with industry and railways, he established a modern judiciary system, set up a public education system, and began implementing secularist and Western political policies.

He oversaw a movement called the Women's Awakening. Women no longer had to wear the chador—a traditional head covering—while working, got equal say in divorce proceedings, and had the option of having their legal actions tried in civil courts instead of Shariah courts.

He was also the first Shah to show great respect for Jews, and even ended the segregation that left them confined to ghettos. Through it all, he clashed with the clergy, but was able to keep them completely at bay.

However, he made one mistake: he wanted to remain neutral in World War II, and that just didn't sit well with the US. The allies attacked, invaded, and occupied Iran in August of 1941, and deposed Reza Shah, putting his son, Mohammed Reza Pahlavi, into power, and he pretty much became a puppet of the United States. Fortunately, his power was still limited.

Then, 1953 rolled around. The US and the UK wanted Iran's oil reserves for BP; Iran's Parliament, under Prime Minister Mohammad Mosaddegh, refused to capitulate. The CIA, under direct orders from President Eisenhower, worked with the UK's MI6 to forcefully depose Prime Minister Mossadegh and disband Parliament, giving the Shah ultimate power and ending democracy in Iran.

Up until this point, Shia Muslims were this small little nobody sect, but the CIA and MI6 enlisted their help in the overthrow of Parliament, increasing their influence.

The Shah became a tyrant, and the people turned against him. A resistance emerged, its leader the Shia cleric Ruhollah Khomeini. Public sentiment turned against the US, its actions in 1953 living in the memory of Iranians to this day. The revolution ultimately succeeded in 1979, the Shah fled to the US, and Iranians demanded that he be returned to Iran to face justice for his crimes against the Iranian people. The US refused, and this led directly to the hostage crisis in November of 1979, which ended on the 20th of January 1981, right when newly-elected President Ronald Reagan finished his inaugural address.

The result of all of this is the Islamic Republic of Iran that we all know today, as a direct result of the US overthrowing the democratic, secular, and westernized government of Iran. And it hurt the US not only in Iran, but throughout the Muslim world as well. Supreme Court Justice William O. Douglas, who visited Iran both before and after the coup, wrote:
"When Mossadegh and Persia started basic reforms, we became alarmed. We united with the British to destroy him; we succeeded; and ever since, our name has not been an honored one in the Middle East." (Kinzer, Stephen, Overthrow: America's Century of Regime Change from Hawaii to Iraq, Henry Holt and Company, 2006, p200.)
And there are similar stories throughout the Middle East, where the US meddles, progress is thwarted and even reversed, and anti-American sentiment grows.

Here's one question we ask over and over again that you would really do well to answer: how would we in the US feel if another country—say, China—were to do the same thing to us? And when you answer, be sure to consider how radicalized the whole country became after 9/11—and see the radicalization within yourself as well. You're not going to convince us by displaying a lack of self-awareness here.

3. Stop pretending all Muslims are terrorists.


Even by our government's laughably bloated estimates, there are only about 500,000 Islamic terrorists in the world. But there are 1.8 billion Muslims! That's a rate of about 28 per 100,000. The violent crime rate in the United States is 387 per 100,000—an order of magnitude greater! So if terrorism means that all Muslims are terrorists, violent crime means that all Americans are violent criminals.

In fact, that figure of 28 terrorists per 100,000 is very close to our rape rate of 27 per 100,000. So I guess all Americans are rapists, by your logic. Hey, I'm just looking for some consistency here!

A more sane estimate came from Angel Rabasa, senior political scientist at the RAND corporation. He estimated a figure of 325,000 Muslims worldwide who were at risk of becoming radicalized. Even if they all were to become radicalized, he pointed out that this isn't enough to make them violent extremists; that only happens if they fall into a circle of people who are advocating violence.

Here's the fact that you just can't get around: There are 1.8 billion Muslims. If they all wanted us dead, we'd be dead.

4. Stop pretending the issue is their religion, and that all terrorists are Muslim.


It is true that Muslim terrorists use their religion to justify it. In fact, Rabasa's research shows that the only way they can commit an act of violence is if they can find scriptural support. But you people are getting it the wrong way around: they aren't reading scripture and becoming violent as a result; they become violent through other ways that I mentioned, and then find scriptural justification for it.

But this has been the case with pretty much every religion ever! Christianity has pretty much cooled out today; hardly anyone would say that Christians are violent simply because their religion says so. But this is a Christianity tempered by the Enlightenment; before then, Christian acts of terror—and even violent Christian states—were much more the norm than Islamic terrorism is today.

And they had plenty of Bible verses backing them up. Here are just a few:
"Anyone arrogant enough to reject the verdict of the judge or of the priest who represents the LORD your God must die. In this way you will purge the evil from Israel." Deuteronomy 17:12
"You must keep the Sabbath day, for it is a holy day for you. Anyone who desecrates it must be put to death." Exodus 31:12-15
"If a man commits adultery with his neighbor's wife, both the man and the woman who have committed adultery must be put to death." Leviticus 20:10
"And the daughter of the man who is a priest, if she begins to fornicate, she profanes her father; she shall be burnt with fire." Leviticus 21:9
"Anyone who blasphemes the Name of the LORD must be stoned to death by the whole community of Israel. Any native-born Israelite or foreigner among you who blasphemes the Name of the LORD must be put to death." Leviticus 24:16
"If your brother, your mother’s son, or your son or daughter, or the wife you cherish, or your friend who is as your own soul, entice you secretly, saying, ‘Let us go and serve other gods’ (whom neither you nor your fathers have known, of the gods of the peoples who are around you, near you or far from you, from one end of the earth to the other end), you shall not yield to him or listen to him; and your eye shall not pity him, nor shall you spare or conceal him. But you shall surely kill him; your hand shall be first against him to put him to death, and afterwards the hand of all the people." Deuteronomy 13:6-9
"The woman must be taken to the door of her father's home, and there the men of the town must stone her to death, for she has committed a disgraceful crime in Israel by being promiscuous while living in her parents' home. In this way, you will purge this evil from among you." Deuteronomy 22:20-21
"Cursed are those who refuse to do the LORD's work, who hold back their swords from shedding blood!" Jeremiah 48:10
And in case you think the New Testament is any better:
"For their women exchanged the natural function for that which is unnatural, and in the same way also the men abandoned the natural function of the woman and burned in their desire toward one another, men with men committing indecent acts...although they know the ordinance of God, that those who practice such things are worthy of death." Romans 1:26-32
"And whoever would not seek the LORD God of Israel should be put to death, whether small or great, man or woman." 2 Chronicles 15:12-13
"Anyone who rejected the law of Moses died without mercy on the testimony of two or three witnesses. How much more severely do you think someone deserves to be punished who has trampled the Son of God underfoot, who has treated as an unholy thing the blood of the covenant that sanctified them, and who has insulted the Spirit of grace?" Hebrews 10:28-29
According to the Skeptic's Annotated Bible, there are 842 violent passages in the Bible, compared to only 333 in the Koran. And the fact is, most of the cruelty of the Koran was inherited from Christianity, which was largely inherited from Judaism—which, in turn, was inherited from the secular Code of Hammurabi, including things like executing women for adultery.

And in case you think the same thing can't happen to Christians or Jews today, look at what's going on in eastern Europe, or central Africa, or India, in places where these populations are being violently oppressed.

Or even the US today, with attacks on Planned Parenthood clinics and other places radical Christians oppose. In 2010, Department of Homeland Security analyst Daryl Johnson said that the Hutaree Christian fundamentalists "had an arsenal of weapons larger than all the Muslim plotters charged in the United States since the Sept. 11 attacks combined." Despite the fact that the number of DHS analysts focused on non-Islamic terrorism had been dropped from six to just two, we can expect even more radicalization among and violence from first-world Christians. And the trigger for it? Anti-Muslim rhetoric. Hope you're proud.

It just isn't the case that violent passages in a religious text is what you need to trigger mass violence in the population. You need brutality, war, oppression, and victimization. Whereas culture, empathy, information, and empowerment of the individual can bring even the most ardent fundamentalist into a peaceful lifestyle. And remember what we saw earlier: this was the state of the Islamic world until the US and other countries started intervening militarily.

5. Don't pretend that the people who point this out are radical Muslims or terrorist sympathizers.


We know that you have no answer for these. Why? Because you don't even try to respond to them. Instead, you attack the character of those pointing it out, saying that they're really secret members of ISIS or Muslim sympathizers or something. Really, this is every bit as desperate—and no more convincing—than an anti-GMO nutbar saying that those who debunk their bogosity are just shills for Monsanto.

It's tempting to just leave it at that (since there really is nothing more that needs to be said), but I do think it's worth it to point out just who it is that's saying these things. When Ron Paul pointed this out in a televised debate among GOP presidential hopefuls, Rudy Giuliani attacked him, saying he didn't know of anyone who took that position. In response, Ron Paul gave Giuliani a summer reading list of books he apparently was completely unfamiliar with.

These authors included Michael Scheuer, chief of the CIA's Bin Laden unit from 1996 to 1999 and special advisor to the chief until 2004, Robert Pape, political scientist and air strategist for the U.S. Air Force’s School of Advanced Airpower Studies, former CIA consultant Chalmers Johnson, and even the 9/11 Commission themselves. So why don't you try levying your accusations at them?

And on a related note:

6. Don't pretend that the people who point this out are blaming the US for acts of terror.


It's inevitable. Guiliani did it to Ron Paul, and every imperialist does it to a person of sense who points out the evil and psychopathy of what they're doing. "Oh, you're blaming America for acts of terrorism!"

This is a tu quoque fallacy. It's also shallow kindergarten-level thinking. No one is trying to absolve terrorists of any blame; we're pointing out that these things don't happen in a vacuum. If you'd bothered reading any of the books in the list I mentioned—if you'd bothered to even take ten minutes to educate yourself on this matter instead of mindlessly regurgitating your state cult's talking points—you'd realize that terrorists are just splinter groups. You'd realize that, by having our troops stomping around over there with boots on the ground, or even worse, cowardly hiding in their safe little bunkers on another continent while they drop bombs via drone, you're taking peaceful people and radicalizing them. And you'd realize that this is exactly what these splinter groups want. ISIS beheaded those journalists specifically to provoke a bombing response by the US, and the US graciously accommodated them. That did more to get local sentiment on the side of ISIS than anything. Make no mistake: ISIS's most valuable recruiter has been President Barack Hussein Obama.

And it's even worse: by going to war with ISIS, the US legitimizes them. War is something you do against states, and more than anything ISIS wants to be recognized as a state. Whereas if the president had acted properly, using the tools the Constitution gave him to deal with violence by non-state organizations: letters of marque and reprisal, he could have gone after the specific individuals who are committing these evil acts, not dropping bombs on innocents and being their greatest recruitment tool ever.

But then, they don't actually care about this. They want to wage war. Which reminds me:

7. Stop believing the same lies government always tells to get us into war.


By now, we all know the lies the US government told us to get us into war with Iraq. The government has been telling much of the same lies about Iran. So just in case you're quaking in your little booties about the prospect of Iran getting a single nuclear weapon, here are the facts about Iran's nuclear program, contrary to the lies Obama has told about it:

Iran has signed on to the Biological Weapons Convention and the Chemical Weapons Convention and ratified the Nuclear Non-Proliferation Treaty. By every report, it has complied with every jot and tittle of these agreements. The same, by the way, cannot be said for Israel.

The fact is, there isn't the first piece of objective evidence that Iran has been working on developing nuclear weapons. A lot was made of their enrichment program, but that uses Zippe centrifuges, and centrifuges of this type—even in the numbers Iran has them—are incapable of making weapons-grade material unless you run them for several centuries. Gernot Zippe himself laughed at these allegations when they were made against Iraq's centrifuge program; although he died in 2008, it's clear he would have levied the same ridicule against the Iran claim as well. Most of Iran's uranium was enriched to 5%, the typical amount for a nuclear reactor.

In March of 2012, Congress tried to sound alarm bells when it was "discovered" (read: when Iran came right out and said) that it had enriched uranium up to about 20%. This is far short of the 90% required for nuclear weapons, and the process gets exponentially more difficult as you go; they are far from one-fifth of the way there. The reason for the 20% enrichment is, as a consensus of experts worldwide has agreed, that it is necessary for the production of medical radioisotopes. Although the International Atomic Energy Agency confirmed that Iran had uranium enriched to 19.8%, they acknowledged that it was for medical reactors. They also acknowledge that the enriched uranium had been oxidized as the reactors require—and once you oxidize uranium, you cannot enrich it further.

Moreover, Iran has declared a fatwa against all nuclear weapons. And Muslims do not kid around with fatwas!

Repeated IAEA reports have consistently said that there is no evidence whatsoever to support the claim that Iran is attempting to obtain nuclear weapons. But even if they were, so what? The Soviet Union had thousands of them, we were able to deal with them, so what would be the big deal of Iran getting a single nuke? Especially since that Iran has never committed a single act of unprovoked aggression against another country in the entirety of its existence; all of the wars they've been involved in have been defensive. The same cannot be said of the US.

The same cannot be said of Israel, either. Unlike Iran, Israel does have nuclear weapons and has not signed on to the non-proliferation treaty—one of only four nuclear countries not to do so. Israel has never publicly admitted that it has nuclear weapons, but in 2014 Jimmy Carter let it slip that it's been known that they have more than 300 nuclear weapons. This is greater than the 100 revealed in 2010 by journalists operating in Israel.

Even though there's no evidence whatsoever that Iran was trying to obtain nuclear weapons, could you really blame them if they were? And on what basis could you possibly deny them that?

Really, there's only one basis left, so:

8. Stop pretending that this isn't really about race.


Given all of the above, it's the only thing left. It's not about Muslims, it's about people who look Middle-Eastern. How else could you possibly explain the policies you're espousing? Like racial profiling at airports, which is as ridiculous as all forms of statistical profiling, not anywhere near as good as predictive profiling, and neither one of which even come close to just searching people at random.

Now you're going to bleat about how it isn't "racial profiling" because you're targeting Muslims, and Islam isn't a race. Just how stupid do you think we are? Are you honestly saying you're going to have psychics at airports reading people's minds to find out what their beliefs are? Come on! You're talking about searching brown people. That's all there is to this.

That's why you're not complaining about Christian terrorists in eastern Europe or even here at home. That's why you're not complaining about African Christian terrorists or even African Muslim terrorists, because they're black, not brown. Only Middle-Eastern terrorists. And when you talk about "all" Muslims being terrorists, it's Middle-Eastern Muslims that you point to.

Let me shatter your pathetic excuse right here and now: according to Pew Research, of the 1.6 billion Muslims they estimated for 2010, only 317 million of them were in the Middle East and northern Africa. Muslims in sub-Saharan Africa had similar numbers: almost 250 million. Most Muslims in the world—almost 1 billion of them—are Asian. And the country with the largest Muslim population is actually Indonesia, with 209 million people identifying as Muslim.

If this really isn't about race, then you're doing everything wrong.

So, from this point on, tread carefully. Because now that all of this has been pointed out to you, then if you continue to use these tactics to defend the War on Terror, all you really prove to us is that you're nothing but a racist psychopath.

deviantID

shanedk
ShaneDK
Artist | Professional | Film & Animation
United States
So I put it to my Patrons what the next video in this series should be, and they picked tariffs. Tariffs are basically taxes on imported goods where there isn't a corresponding tax on domestic goods, also known as "import duties" or "customs duties." With our new president promising to use tariffs to give us an advantage over other countries like China and Mexico, it's more important than ever for statists who support tariffs to formulate their arguments so they are convincing to reasonable people—which, as usual, is what they haven't done.



By the way, this video will be from an American perspective, but the concepts are universal and apply everywhere. So if you're somewhere else in the world, just replace "America" with your own country and it still applies.

This issue is very much tied in with economics, so fair warning: there's a good bit of economics in this video, but it's important. So here are the things you need to keep in mind if you want to support tariffs:

1. Understand the economics behind it.


In the supply/demand model, increased costs push the supply curve to the left, meaning that producers can't produce as many items of a certain good at each price level as they could before. This increases the equilibrium price while decreasing the equilibrium quantity.

Tariffs are a cost that have to be added to the sale price of the imported good. So the only difference they'll make is in higher prices and fewer consumer goods sold.

The economic data backs this up. According to a 2008 paper published by the National Bureau of Economic Research:
Long ago, Díaz Alejandro (1970) pointed out that if—like the Argentines—you double the price of a machine via trade barriers, then you are placing an enormous tax on investment and accumulation that will depress output. Historical evidence accords with his view...Where those barriers have dropped growth accelerations have been significantly higher than where barriers have remained. Some countries have reaped the benefits. More could yet do so and enjoy higher incomes and lower poverty rates...
Essentially, you need to explain how making things more expensive helps Americans.

2. Learn the Law of Comparative Advantage.


In the early 19th century, economist David Ricardo posited the Law of Comparative Advantage. It's one of the few effects in economics that is accepted pretty much in every school of economics. To see how it works, let's simplify things a bit.

Let's say there are only two people in the world. Let's call them "Adam" and "Steve." They're going to need things to survive. We'll focus on two things: spears to hunt food, and axes to chop wood for fire and shelter.

Adam can make axes more easily than spears, and Steve can make spears more easily than axes. So they decide to have Adam make the axes and Steve make the spears. They then trade an axe for a spear. If that sounds like simple division of labor to you, you're absolutely correct. And if you're thinking you have all of the advantages that come from that, like specialization, you're also correct. But there are two counterintuitive things that Ricardo and others who built on his work observed.

Let's say Adam can make an axe in 3 hours and a spear in 4, and Steve can make a spear in 1 hour and an axe in 2. So Steve can make an axe and a spear in the same time it takes Adam to make just an axe. It may sound as if Steve doesn't need Adam and Adam's going to lose out, and a lot of policies—including tariffs—are made around this misunderstanding.

But it doesn't matter. If they make the trade, then Steve only has to work two hours making two spears; it's still beneficial for him to trade with Adam. By trading, Adam only has to work 6 hours instead of 7, and Steve only has to work 2 hours instead of 3. They both save an hour of labor, and so it's beneficial to make the trade, even if Steve is better overall at making both.

The second is that this doesn't just apply to cavemen making axes and spears. It applies to everyone in a modern economy, and—this is the important part—it applies to countries as well. If Japan is better at making cars than airplanes, and America is better at making airplanes than cars, then both countries are better off if America just makes planes to sell to Japan, and Japan just makes cars to sell to America. So in such a case, putting a tariff on cars hurts Americans.

Now, you might be thinking that it has to be equal for this to work out. If Americans buy lots of Japanese cars but Japan only buys a few airplanes, Americans will lose out. But the next thing you need to do is:

3. Give up the "Trade Deficit."


If America buys millions of Japanese cars but only sells hundreds of airplanes to Japan, you might call that a "trade deficit" and say it's a bad thing. This is just a non-starter of an argument. There is no such thing as a trade deficit.

Let's leave money out of it for a second. If we're trading airplanes for cars, then it just means that we'll trade (say) ten thousand cars for one airplane. Like Adam and Steve before, even if Japan can make an airplane for the same resources it can use to make ten thousand cars or even less, both countries are still better off making the exchange.

But it doesn't even have to be that way since countries are trading in their currencies. When Japanese want to buy an American plane, they need US dollars to do it, which means they'll have to give up some of their Japanese yen for them. And Americans who want to buy Japanese cars will need to give up some of their dollars for yen. And in the real world, of course, this happens across every product both countries trade.

For all the trade that's going on, if Japanese need 1 million dollars to buy American goods, and Americans need 1 million yen to buy Japanese goods, the exchange rate will be 1 dollar to 1 yen. But let's say there's a "trade deficit," where the amount of goods Americans buy from Japanese is more than what Japanese buy from Americans. So Americans need 2 million yen whereas Japanese still just need 1 million dollars. Now the exchange rate is 2 yen to 1 dollar. Any imbalance between trade is adjusted for by the exchange rate. And when government tries monkeying with the exchange rate, bad things happen, like in Venezuela.

But that's not what politicians are actually referring to when they talk about a trade deficit. They look at it after the exchange rate has taken place: where the exchange rate is still 2:1, but Japanese are buying less than 1 million dollars of American goods. You may be thinking, "Then what are they wanting the rest of the money for?" That is exactly the question you should ask—but it's one that politicians and the news media never seem to want to discuss.

There are only two things that can be done with money: it can be spent, or it can be invested. So if they don't want that money to purchase American goods, they must want it to invest in American capital. That means they'll be providing funds for businesses to expand, or for people to buy houses, or whatever. Investment is also known as deferred gratification, meaning in this case that Japanese are going to do less consuming, putting off some of that wealth until a later point in time, so Americans can take advantage of it.

Economists actually refer to a "trade deficit" as "net foreign investment." Because as long as exchange rates are free to fluctuate, any imbalance must be due to more investors in one country investing in the other than is going the other way. So whenever you use the term "trade deficit," understand that we see it for what it is: investment coming from other countries to expand our economy and our businesses, creating jobs and allowing us to produce more and have more for ourselves than we would have otherwise. They're doing without for a little while so that we can have more. You're going to have a very hard time convincing us that this is a bad thing.

In Chapter 6 of Economic Sophisms, Frédéric Bastiat wrote:
The truth is that we should reverse the principle of the balance of trade and calculate the national profit from foreign trade in terms of the excess of imports over exports.  This excess, minus expenses, constitutes the real profit.  But this theory, which is the correct one, leads directly to the principle of free trade...Assume, if it amuses you, that foreigners flood our shores with all kinds of useful goods, without asking anything from us; even if our imports are infinite and our exports nothing, I defy you to prove to me that we should be the poorer for it.
Here's a beautiful refutation of the fallacy: Hong Kong has virtually no natural resources; it imports everything. What it does produce, like integrated circuits, is made with imported raw materials. They have a "trade deficit" of over $400 billion, almost twice their GDP. But Hong Kong is still a very prosperous nation, with the quality of life increasing by leaps and bounds, thanks to free trade, the world's freest market, and zero tariffs.

As the late Marc Allan Feldman said:
I have a trade deficit with my barber: I give him money; he cuts my hair. He never gives me money. Who cares? He cuts my hair.

4. Why do economists across the board believe they're bad?


There aren't many things that economists of every school believe. So when you do get one, it's time to take notice. Every single school of economics agrees that free trade makes a country prosperous and that any kind of tariff makes the nation poorer.

This isn't just economists from 200 years ago, or kooky Austrians working in Libertarian thinktanks or whatever. Economists across the board, from every school of thought, agree that tariffs make us worse off—a scientific consensus of the kind rarely seen in the field of economics.

The Initiative on Global Markets, or IGM, is a research organization that did a survey last year of numerous economists from many different universities and schools of economics. The statement they were asked to agree or disagree with was: "Adding new or higher import duties on products such as air conditioners, cars, and cookies — to encourage producers to make them in the US — would be a good idea." Not a single one of them agreed with the statement or even said they were uncertain; they all answered either "Disagree" or "Strongly Disagree." And this included economists from MIT, Yale, Berkeley, Harvard, Princeton, Stanford, and others across the country. If they couldn't find a single economist to agree, then how can you justify it?

Interestingly, one of these economists was David Autor of MIT, who said: “Taxing consumers to subsidize domestic production is bad economics and a violation of the WTO agreement.” This is interesting because one of his papers, "The China Shock," is being actively misinterpreted as a promotion of tariffs and a refutation of free trade. What the paper actually found was that the labor market is high friction in places like Ohio and Michigan, due to things like unionization and high taxes, and this adversely affects industries where products can be imported from China. The economy can and will improve in the face of such a shock, but only if politicians allow it to and don't tax and regulate everything right and left. This is another example of government causing a problem and pointing the finger of blame somewhere else.

This is also the conclusion of a paper from the St. Louis Fed which found:
China's trade shock resulted in a loss of 0.8 million U.S. manufacturing jobs, about 50 percent of the change in the manufacturing employment share unexplained by a secular trend. We find aggregate welfare gains but, due to trade and migration frictions, the welfare and employment effects vary across U.S. labor markets.
In other words, those job losses were more than made up for by job and wage gains elsewhere. So when they point to the job losses in manufacturing, they're cherry-picking; they hope you look at this and blame it for part of the unemployment we're experiencing, but those job losses happened because that sector was less efficient. The result was that economic resources moved to other sectors that were more efficient, making life better for everyone in the country. You need to look elsewhere for a cause of unemployment, because this isn't one.

Also:
Our results indicate that although exposure to import competition from China reduces manufacturing employment, aggregate U.S. welfare increases."
So the manufacturing sector might get a bit of a boost from tariffs, but the rest of us are worse off for it.

So that means you need to:

5. Explain how tariffs are better than straight-out welfare.


Let's think about this: tariffs make goods more expensive for Americans. If we are as generous to your side as we can possibly be, tariffs increase domestic employment (they don't, for reasons we've covered; at best it might boost a certain sector at the expense of others, but we'll grant it for the time being). But only a part of that additional price is going to go to the workers; the rest is absorbed in other costs of doing business.

That being the case, why would it not be better to simply tax Americans that extra money and pay it directly to those would-be workers? And what is the moral difference?

I'll tell you one difference: tariffs are a regressive tax that disproportionately hurts the poor. That's what a paper published by the Center for Economic and Policy Research found:
Tariffs—taxes on imported goods—likely impose a heavier burden on lower-income households, as these households generally spend more on traded goods as a share of expenditure/income and because of the higher level of tariffs placed on some key consumer goods.
More specifically, the lowest income decile spends over 1.5% of after-tax household income on tariffs, compared to .6% for the second decile and less than .3% for the top decile. The burden is worse on families with children, especially single parents.

This same effect applies to subsidies on exports. Yes, if you subsidize exports, more people in foreign countries will buy the exported goods. But think about what you're doing: you're taxing Americans so that foreigners can have cheaper products. It's exactly the same as if you'd taxed Americans to give money to foreigners so they can buy more stuff. And that helps us, how?

If you understand that, then you also see that you need to:

6. Deal with the arguments against protectionism.


What we hear from a lot of politicians is that all of this is very well and good when there's free trade in both directions, but since foreign countries are putting restrictions on trade from the US, we need to put restrictions on them to stop them from hurting American consumers.

If you understand what I just said about subsidies, you'll understand why foreign subsidies are no reason to place tariffs. Foreign subsidies don't hurt Americans; they hurt the people in that country because they have to pay the taxes that go to the subsidies. It's exactly as if they forced their own citizens to pay for part of the price of the goods that we buy.

Conversely, if they place a tariff on our goods, they're only shooting themselves in the foot, for the same reason US tariffs end up costing Americans.

Politicians may crow about "unfair competition." Through subsidies or tariffs or currency manipulation or whatever, they make their goods so cheap that America just can't compete. But what that really does is allow Americans to have greater purchasing power: our paychecks now go further since many of the goods we buy are cheaper. The costs of all of this don't come from Americans somehow; the burden is placed on the people in that country in the form of higher taxes or inflation. "Unfair competition" really means "prices are advantageous to consumers, not producers," and that is the problem with protectionism: it's really about enriching cronies at the expense of the people.

Tariffs increase the price of foreign goods, meaning consumers will buy domestically. But why weren't they before? It must have been because the domestic goods cost too much. Ultimately, this is price manipulation that makes everyone poorer. Those crony industries may profit more in the short run, but in the long run, our economy isn't as prosperous as it otherwise would have been. "Protection" really means exploiting the consumer.

Prices—including the price of imported goods—convey information about how efficiently resources are being used. They give consumers valuable information about where their earnings would best be spent. And it goes the other way, too: by making decisions on whether or not to buy a certain good, consumers use the price mechanism to communicate information of their own. In this example, they're telling domestic producers not to produce so much of this particular good, and instead to divert those resources somewhere else where they can be put to better use. Insomuch as they are a conveyance of information, prices are a form of speech. And they are the most effective form of speech that consumers have with producers. Tariffs, subsidies, currency manipulations, and for that matter, any form of price control is, in a very real sense, a violation of our freedom of speech.

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GuineaPigDan Featured By Owner Jul 12, 2014   Filmographer
Oh wow, I didn't know you had a dA!
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TravisRetriever Featured By Owner Jun 13, 2014
Thanks for the watch back. :)
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