Quotulatiousness

February 25, 2025

Argentina’s experience of life with high tariffs

Filed under: Americas, Business, Economics, Government, Politics, USA — Tags: , , , , , , — Nicholas @ 05:00

Marcos Falcone explains how Argentina’s unusually high tariff barriers distort ordinary economic activity for Argentines every day:

When Argentines go abroad, they usually go shopping. Many of the products they want cannot be bought at home, ranging from clothes to smartphones and all kinds of home appliances. Because of this, it has become a tradition to return from a trip with one or two extra suitcases filled with smuggled goods. Did you know that it is more expensive to buy an outdated iPhone in Argentina than it is to fly from Buenos Aires to Miami, stay for three days, and get the newest one?

[…]

Tariffs do not just make it difficult to get phones at home — they can make life dangerous as well. Argentina’s most sold car, which is artificially expensive because of protectionist measures, got 0 (zero) stars on one of Latin America’s most renowned safety tests. Cars in Argentina are not only more expensive than elsewhere in the region, but also markedly less safe.

To achieve these terrible results, the only thing Argentina had to do was enact tariffs, and now the US seems to be heading in the same direction. But in the past, protectionism has caused the same damage in the north as it caused in the south. Back in the first Trump administration, protecting the steel-production industry saved some jobs, but eliminated many more. Tariffs have also hurt businesses that rely on imports within the US and can continue to do so in a world of globally integrated supply chains. More generally, the 1933 Buy American Act, which forces the government to pay more for US-made goods, has been proven to be both ineffective and costly.

There is no escaping the negative effects of blocking outside competition. The more barriers a country enacts, the more damage it causes to itself. If we, as individuals, acted in a protectionist way, we should aim to grow our own food, build our own house, or make our own cars. But how does that make any sense? Economist Robert Solow once said, “I have a chronic deficit with my barber, who doesn’t buy a darned thing from me”. He meant it as a joke, but he had a point: What matters is to create wealth, which can be done both by selling and buying from others.

The revival of protectionism in the US is worrisome. To avoid it, Americans should take a look at the enormous destruction of wealth that tariffs have caused in other countries. Despite President Milei’s recent efforts to lift tariffs and take Argentina out of the “prison” in which it exists, the fact that the country shot itself in the foot decades ago has put it in a very delicate economic position. The US should not follow its path.

February 21, 2025

QotD: Why does it cost so much to build modern infrastructure?

Filed under: Britain, Bureaucracy, Economics, Government, Quotations — Tags: , , , , — Nicholas @ 01:00

Now, obviously, there are reasons why building infrastructure is expensive. One is that politicians have taken unto themselves the power to decide what infrastructure should be built how and where. Therefore infrastructure is built by fuckwits, obvious, innit? We’ve also allowed far too many people to dip their ladle in the gravy — that £300 million planning inquiry into a tunnel under the Thames. And did I say fuckwits already — that £100 million bat tunnel.

But one reason all these things are so expensive is because we’re not doing them on terra nullius. If we start with a bare field a ground source heat pump might well not be that bad an idea. Communal heating systems into an entirely new development, maybe.

But putting ground heat pumps into central London? Can’t do that ‘ere mate, someone’s already built central London right where you want to dig up. HS2 goes right through some of the most expensive — and inhabited by the highly vocal — countryside in the nation. Edinburgh, minor though it is, still has that central London problem.

This also explains why Mercury Comms employed the ferrets. The tubes already existed and fibreoptic could be stuffed down them. They didn’t have to dig up central London, see?

Agreed, this isn’t one of the world’s truly great insights but it is something to keep in mind. The reason building the infrastructure for the next level of civilisation costs so much is because we already have a civilisation. The existence of which gets in the way of the building men …

Tim Worstall, “Why Is Infrastructure So Damn F’n Expensive?”, It’s all obvious or trivial except …, 2024-11-18.

February 19, 2025

A brief nod to the shade of Missouri Representative James Beauchamp “Champ” Clark

Filed under: Cancon, Economics, Government, History, Politics, USA — Tags: , , — Nicholas @ 03:00

I was aware that the greatest Liberal Prime Minister in Canadian history, Sir Wilfred Laurier, had lost an election on the basis of a negotiated free trade deal with the United States, but I was not aware of exactly how that happened. Colby Cosh provides the gory details that got Laurier out of office for good:

Funny thing I noticed: Friday marked the anniversary of the 20th century’s most remarkable explosion in Canadian-American relations, which took place on the floor of the U.S. House of Representatives in 1911. On that day, Feb. 14, Missouri Democratic congressman James Beauchamp “Champ” Clark gave a short speech in defence of a free-trade agreement that had been hammered out between the (Republican) Taft administration and Wilfrid Laurier’s Liberal government.

Clark, a progressive and witty westerner who had already been chosen to become Speaker of the House in April, was widely expected to be the Democratic nominee for president in 1912. He was, in other words, a man who counted. And on the floor of the House, he advocated passage of the free-trade deal on grounds that eventually doomed it: namely, that it was a conscious step toward total American absorption of the Dominion of Canada.

When Clark’s remarks hit the newspapers up north — and no news story hit harder between 1900 and the dawn of the Great War — there was a spasm of anti-American and pro-Empire feeling throughout the country. As any schoolbook will tell you, this helped lead to the defeat of Laurier and the ruin of the trade deal in September 1911’s general election. This gaffe is indeed now what Clark is best remembered for, along with his eventual fumbling away of the 1912 presidential nomination to an unassuming professor named Woodrow Wilson.

When I was an undergraduate, we all had to have it explicitly explained to us that back in Edwardian days, the Liberals were the party of free trade, and the Conservatives the great defenders of tariff protection (although Sir John A. had sometimes sought without success to kick-stark “reciprocity” negotiations with the U.S.). Perhaps the most confusing feature of the 1911 controversy to students of today will be Champ Clark’s idea that the U.S. government would want to lower trade barriers to facilitate eventual annexation of Canada, rather than raising them to mutually punitive levels as a matter of crude antagonism.

Between Confederation and Champ’s time, Americans often just assumed as a matter of course that Canada would fall into their laps without any need for aggression or invasion. We northerners would eventually see that the benefits of American citizenship were more valuable than our romantic imperial attachments, and we would come beat down the door. This was certainly Clark’s own idea, and it created no controversy among Americans themselves when he expressed it.

Of course, in Laurier’s day “liberal” meant something closer to the modern sense of “libertarian” than it does to the current incarnation (or shambling corpse) of that party.

February 16, 2025

Free-market economist grapples with a new kind of tariff

Filed under: Business, Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 03:00

With US President Donald Trump seemingly utterly entranced by the possibilities of killing off as much world trade as he can using tariffs, I did not expect to read that renowned libertarian economist David Friedman is not sure about the latest kind of tariffs being proposed:

I have finally encountered a kind of tariff that I am not sure I am against. The idea is to impose the same tariff on another country’s exports that they impose on your exports. A tariff makes the country that imposes it worse off, a fact that neither Trump or most of the media appear to understand — Vance may — but it makes the country it is imposed against worse off as well. Imposing a tariff can be in the interest of the politicians who impose it for public choice reasons, as a way of buying support from a concentrated and well organized interest group such as the auto industry at the expense of a dispersed interest group such as their customers. That is one of the two reasons tariffs exist, the other being that the false theory of trade economics is simpler and easier to understand than the true theory.1

But another country’s tariff barriers against your exports make both your country and its politicians worse off. So if imposing tariffs on their imports results in tariffs being imposed on their exports, it might be in the interest of the politicians as well as the country they rule to lower, even abolish, their tariffs — and free trade, zero tariffs, is my first best tariff policy.

Reciprocal reduction of tariffs is, of course, a routine objective of trade negotiations. What Trump appears to be proposing is to automate the process. That might have some advantages. It would reduce the amount of time and effort spent on trade negotiations. More important, it would make it harder for a government that wanted to keep its tariffs to pretend to its citizens that negotiations for mutual reductions had broken down over details.

It is not obvious what “reciprocal tariffs” means in practice, because tariffs, typically, are on particular goods. China imports oil and exports textiles. If they impose a tariff on American oil there would be no point to the US retaliating by imposing a tariff on Chinese oil — we don’t import Chinese oil.

    Under the Plan, my Administration will work strenuously to counter non-reciprocal trading arrangements with trading partners by determining the equivalent of a reciprocal tariff with respect to each foreign trading partner. (Reciprocal Trade and Tariffs Memo)

It isn’t clear what “the equivalent” means. One possible approach would be to figure how much revenue a country collects from tariffs on American exports and set a uniform tariff on that country’s exports set to bring in the same amount of revenue. That would be simple and would reduce the political support for tariffs, since they could not be targeted to protect specific industries.

For which reason I don’t expect it to happen. The closest version that seems politically plausible is a nonuniform tariff schedule that brings in the equivalent revenue. Unfortunately that would let the administration protect favored industries with tariffs high enough to reduce imports, and revenue, to near zero.

Of course, the target country could, in a true system of reciprocal tariffs, solve the problem by reducing their tariffs to zero.

QotD: Why we’re stagnating

Filed under: Books, Economics, History, Quotations — Tags: , , , , , , — Nicholas @ 01:00

I won’t attempt to recap here the many arguments that have been made recently about whether and how our society is stagnating. You could read this book or this book or this book. Or you could look at how economic productivity has stalled since 1971. Or you could puzzle over what else happened in 1971. Or you could read Patrick Collison’s list of how fast things used to happen, or ponder how practically every new movie these days is a sequel, or stare in shock at declines in scientific productivity. This new book by Byrne Hobart and Tobias Huber starts with a survey of the most damning indicators of stagnation, moves on to suggest some underlying causes, and then suggests an unexpected way out.

Their explanation for our doldrums is simple: we’re more risk averse, and we don’t care as much about the future. Risk aversion means stagnation, because any attempt to make things better involves risk: it could also make things worse, or it could fail and turn out to be a waste of time and money. Trying to invent a crazy new technology is risky, going into consulting or finance is safe. Investing in unproven startups or speculative bets is risky, investing in index funds is safe. Trying to overturn the scientific consensus is risky, keeping your head down and publishing papers that don’t say anything is safe. Producing challenging new art is risky, spewing an endless stream of Marvel superhero capeshit is safe. Even if, in every case, the safe option is the “rational” choice for an individual actor in maximin expected value terms, the sum total of these individually rational choices is a catastrophe for society.

So far this is a lame, almost tautological, explanation. Even if it’s all true, we still haven’t explained why people are so much more fearful of failure than they used to be. In fact, we would naively assume the opposite — society is much richer now, social safety nets much more robust, and in the industrialized world even the very poor needn’t fear starvation. In a very real sense, it’s never been safer to take risks. Failing as a startup founder or academic means you experience slightly lower lifetime earnings,1 while, in the great speculative excursions of the past, failure (and sometimes even success) meant death, scurvy, amputations, destitution, children sold into slavery or raised in poorhouses — basically unbounded personal catastrophe. And yet we do it less and less. Why?

Well, for starters, we aren’t the same people. Biologically, that is. We’re old, and old people tend to be more risk-averse in every way. Old people have more to lose. Old people also have less testosterone in their bloodstream. The population structure of our society has shifted drastically older because we aren’t having any children. This not only increases the relative number (and hence relative power) of older people, it also has direct effects on risk-aversion and future-orientation. People with fewer children have all their eggs in fewer baskets. They counsel those kids to go into safe professions and train them from birth to be organization kids. People with no children at all are disconnected from the far future, reinforcing the natural tendency of the elderly to favor consumption in the here and now over investment in a future they may never get to enjoy.

Old age isn’t the only thing that reduces testosterone levels. So does just living in the 21st century. The declines are broad-based, severe, and mysterious. Very plausibly they are downstream of microplastics and other endocrine-disrupting chemicals. The same chemicals may have feminizing effects beyond declines in serum testosterone. They could also be affecting the birth rate, one of many ways that these explanations all swirl around and flow into one another. Or maybe we don’t even need to invoke old age and microplastics to explain the decline in average testosterone of decisionmakers in our society. Many more of those decisionmakers are women, and women are vastly more risk-averse on average.2

John Psmith, “REVIEW: Boom, by Byrne Hobart and Tobias Huber”, Mr. and Mrs. Psmith’s Bookshelf, 2024-11-11.

    1. And given the logarithmic hedonic utility of additional money and fame, that hurts even less than it sounds like it would.

    2. If you’re too lazy to read Jane’s review of Bronze Age Mindset but just want the evidence that women are more cautious and consensus-seeking than men on average, try this and this and this for starters.

February 13, 2025

From Ruins to Recovery: The Fight to Rebuild – W2W 004

Filed under: Britain, Economics, France, Germany, History, Japan, Military, USA — Tags: , , , , — Nicholas @ 04:00

TimeGhost History
Published 12 Feb 2025

In 1946, the world is struggling to rebuild from the devastation of WWII. Cities lie in ruins, economies are shattered, and millions are displaced. As the old powers of Britain and France weaken, the rising superpowers — the U.S. and USSR — compete to shape the new world order. Will reconstruction lead to stability, or is the world heading for another conflict?
(more…)

QotD: Social Darwinism

Filed under: Economics, History, Politics, Quotations, Science, WW2 — Tags: , , , , — Nicholas @ 01:00

Social Darwinism fails both on its own terms, and in the implementation. On its own terms, because we simply can’t account for all the variables. I use the example of billiards: The math is simple enough behind any given billiard shot, but once you introduce obvious real world variables like imperceptible imperfections in the felt of the table, the balls themselves, the cue … plus the inability of human muscles to consistently apply the necessary force in just the right way … your average PhD physicist should be a much better pool player than, say, your average barfly, but the reality is far different. How much more complex is an entire living system, than a pool table?

Social Darwinism fails in practice for the most obvious reason: You can’t practice it with the necessary consistency without massive State intervention, and what kind of fool would give a State, any State, that power? It has been tried, 1933-45 being the most prominent example, and it didn’t go well.

Severian, “The Experiment”, Founding Questions, 2021-09-25.

February 11, 2025

The End of Empire? Colonialism in Crisis – W2W 003

Filed under: Britain, Economics, France, History, Russia, USA — Tags: , , , , , , — Nicholas @ 04:00

TimeGhost History
Published 9 Feb 2025

In 1946, the old colonial empires of Britain and France struggle to maintain control as nationalist movements rise and their economies crumble. Meanwhile, two new superpowers — the U.S. and the USSR — seek to reshape the world in their image, using decolonization as both an ideal and a tool for influence. As the colonial order fractures, global power shifts, and the battle for dominance begins.
(more…)

February 10, 2025

Trump’s EO against central bank digital currencies

Filed under: Economics, Government, Politics — Tags: , , , , — Nicholas @ 03:00

The Trudeau government’s illegal move to freeze the bank accounts of Canadians who supported the Freedom Convoy should have clearly illustrated the dangers of allowing a government to exercise that level of control over individuals’ financial affairs. (It’s hard to express just how inhumane that move was to deprive thousands of Canadians their ability to conduct any financial business at all … in the middle of the winter just because they’d chipped in small donations to a cause Trudeau didn’t like.) I don’t know if Donald Trump took note, but another of his long list of executive orders directly addresses crypto and CBDCs:

“Bitcoin – from WSJ” by MarkGregory007 is licensed under CC BY-NC-SA 2.0

While the order has upsides and downsides concerning current crypto policies, the parts of the order I’m most excited about are the portions on Central Bank Digital Currencies, or CBDCs. A CBDC is essentially a government-created centrally controlled version of cryptocurrency. As FEE has discussed in the past, CBDCs are a very dangerous idea, and it was troubling that they were being pursued by the Biden administration.

So what does the Trump executive order say about them? Take a look:

    [The Trump administration is] taking measures to protect Americans from the risks of Central Bank Digital Currencies (CBDCs), which threaten the stability of the financial system, individual privacy, and the sovereignty of the United States, including by prohibiting the establishment, issuance, circulation, and use of a CBDC within the jurisdiction of the United States.

Section 5 of the order covers how this will be done. By the order, it’s now illegal for bureaucrats within government agencies to pursue any plans to establish a CBDC unless it is required by law. In other words, barring the possibility that some bureaucrats could break the law, CBDC initiatives must immediately end unless the legislature passes bills requiring them.

This is a big step because the establishment of a CBDC would require significant political, bureaucratic, and technological infrastructure to be implemented. Trump’s order puts a pause on the building of that infrastructure which began under Biden.

On net, Trump’s order seems to have been taken well by crypto markets, with Bitcoin seeing a small price surge after the announcement of the order. So while the future of government crypto regulation remains unclear, the new administration’s commitment to stopping CBDCs and protecting the rights of those engaging in crypto mining and transactions seems to be a good sign.

February 8, 2025

Interprovincial trade barriers in Canada

Filed under: Cancon, Economics, Government, History — Tags: , , , — Nicholas @ 03:00

In the National Post, Jamie Sarkonak pours some icy cold water on the fever dream that we can fix what ails us economically with this one neat trick:

Understand what an interprovincial trade barrier is: it isn’t a simple matter of repealing tariffs, because internal tariffs don’t exist — provinces aren’t allowed to impose them. Instead, barriers take the form of red tape that differs in shade by province; if there are 10 provinces that each regulate, say, what shape of toilet seat is required to be used on a construction site, expect 10 different rules on the matter (Ontario requires a gap at the front of the seat; Alberta doesn’t care).

For Canada’s toilet seat manufacturers, that’s another level of complexity that can complicate production and make it costly to expand to new jurisdictions.

Now repeat the mental exercise for every other provincially regulated product: food, alcohol, pesticides, lumber and so on. And again, with all the other provincially regulated things you can buy but not hold: massage therapy, legal services, hair and aesthetic services, provincially regulated securities.

It adds up to a lot, and that’s by design: in 1867, the Constitution explicitly handed authority over most sectors to provincial governments. Provincial regulations, and by extension, interprovincial trade barriers, are central to provincial autonomy.

Theoretically, rule consolidation is a good deal. It would be far easier to do business in Canada if it worked more like one country with one set of rules, rather than a heterogenous group of 10 micro-states packed into one.

On the taxpayer side, there are savings to be had, too: regulatory bodies use public funds and there are (theoretically) savings to be had by centralizing the offices of 10 different sheriffs into one. Estimates vary, but lifting barriers is thought to add a boost of $80 billion (International Monetary Fund) to $200 billion (Canadian Federation of Independent Business) to the economy.

But standing in the way of free-trade utopia are the practical considerations, the big one being protectionism. Making its case in the Journal de Montreal, William Rousseau put it well: “The abolition of these barriers can even be economically harmful, because for each barrier that blocks a company from the rest of the country, there is a Quebec company that benefits from it and whose business model takes this barrier into account.” The exact same can be said for any province.

This is why I thought well of Pierre Poilievre’s recent trial balloon about ways to coax the provinces into reducing interprovincial trade barriers by … let’s be honest … providing a financial bribe from the federal government. By allowing the individual provinces to “capture” some of that “lost” revenue, it may provide enough incentive to start dismantling at least some of the structural barriers to free trade within Confederation.

February 5, 2025

QotD: Economies and disasters

Filed under: Economics, Quotations — Tags: , , , , — Nicholas @ 01:00

Here’s a question: Are natural or manmade disasters good for the economy? Dr. Larry Summers, top economic adviser to President Obama, said about the Kobe, Japan, earthquake: “(The disaster) may lead to some temporary increments ironically to GDP as a process of rebuilding takes place. In the wake of the earlier Kobe earthquake Japan actually gained some economic strength.” After devastating Floridian hurricanes, it’s not uncommon to read newspaper headlines such as “Storms create lucrative times”, or “Economic growth from hurricanes could outweigh costs”, or “It’s a perverse thing … there’s real pain, but from an economic point of view, it is a plus”. Then there’s Nobel Laureate Paul Krugman who wrote in his New York Times column “After the Horror”, after the 9/11 attack, “Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could do some economic good”. He went on to explain that rebuilding the destruction would stimulate the economy through business investment and job creation.

One would never hear my colleagues in George Mason University’s economics department spouting such insanities. Just ask yourself whether the Japanese economy would have faced even greater opportunities for economic growth had the earthquake also struck Tokyo, Hiroshima, Yokohama and other major cities? Would the 9/11 terrorists have made a greater contribution to our economy had they also destroyed lives and buildings in Chicago, St. Louis, Los Angeles and Atlanta? The belief that a society benefits from destruction is sheer lunacy.

French economist Frederic Bastiat (1801-1850) explained it in his pamphlet “What is Seen and What is Not Seen”. He said, “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen”. That’s why my George Mason University colleagues are good economists.

Walter E. Williams, “Economics Reality”, Townhall.com, 2020-02-04.

February 4, 2025

Trump tariff diary, days 2 and 3

Filed under: Cancon, Economics, Government, Media, Politics, USA — Tags: , , , — Nicholas @ 03:00

Posted to social media yesterday:

To celebrate Groundhog Day, Governor Trudeau wore commemorative Groundhog-themed socks. Governor Trudeau’s announced counter-tariffs seem to have made no difference to the Big Orange Meany, so the Great State of Canada proceeds with plans to annex Guam and American Samoa. China has indicated interest in purchasing Vancouver Island or leasing the naval base in Esquimault. The National Post‘s Tristin Hopper suggested “Spend 10 years relentlessly kneecapping the Canadian economy for no reason to show Trump we’re not scared of him”, but we’ve already done that.

Today’s tariff diary entry was going to be:

Reports indicate that the Mexican government is folding to Trumpian pressure. Governor Trudeau insists he won’t budge, regardless of the economic damage to Canadian consumers … what a hero! A few of us may lose our jobs, our businesses, and our economic futures, but he’s willing to take that risk. Update: Trudeau folded like the cheap suit he so resembles. Tariff war on hold for 30 days as Trudeau looks for a way to sign the terms of surrender without any blame attaching to him or his party … he’ll probably blame the provincial governments and the federal NDP (who’ll still support him in Parliament, regardless).

… But the “pause” in tariff enforcement may be enough to let Trudeau and the Liberals — with the active connivance of the bought-and-paid-for Canadian legacy media propagandists — portray this as a great national victory and attempt to turn it into votes for Liberal candidates in the next federal election. I’d love to be proven too cynical here, but the Liberal track record isn’t good.

QotD: The American political spectrum

Filed under: Economics, Politics, Quotations, USA — Tags: , , , , , — Nicholas @ 01:00

I tend to think of the American political spectrum as broadly dividing into six major groups (political “tribes” we might say), arranged very roughly from left to right, though I must note that there are serious differences within tribes as much as between them. Going left-to-right, there is first (1) The Left, who are the sort of left-leaning folks who get upset if you call them liberals and are committed to more aggressive forms of socialism that envision and end to or massive curtailment of things like markets. Your actual Marxists go here. Then moving right there are (2) Progressives, who are generally committed to liberalism as a philosophy, but favor large-scale government intervention inside that framework to reshape society (“progressivism”), which they believe can be reshaped for the better. Bernie Sanders, Elizabeth Warren and AOC go here; some of these folks will call themselves social democrats, evoking the form of this ideology in Europe. Then you have (3) Left-Liberals (“Social Liberals”), who have the same ideological components as the progressives (progressivism+liberalism), but with an inversion of the emphasis, where the individual liberty claim of liberalism is the dominant strain over the society-reshaping goals of progressivism. This is where the mainstream and especially moderate wings of the Democratic party sits.

Then on the right you have (4) Right-liberals (“Classical liberals”), who share liberalism with groups (2) and (3) but reject (or at least substantially challenge) the idea that society can be “engineered” with positive results. This group largely left the Republican party between 2016 and the present (though some were already libertarians). Notably, (3) and (4) in the United States tend to share hawkish anti-authoritarian, anti-communist foreign policy views; this is where the foreign policy “blob” lives. To their right are (5) Traditionalist Conservatives. Because the United States was founded as a liberal country, they tend to still hold some liberal views (and respond well to liberal, “freedom-centered” framing) but their main ideological commitment is generally conservative in its literal meaning of being traditionalist, desiring things to not change or to recover that which has changed and there is a willingness to compromise on liberalism in the pursuit of that. This, I’d argue, is where the core of the Republican Party currently exists. Finally, you have (6) Right-Authoritarians, who come in various forms based on the authority they believe ought to structure society, e.g. populist authoritarians are fascists, whereas Catholic religious authoritarians are integralists and so on. But the core idea here is that there exists an authority, be it the “national will” (invariably channeled by an individual charismatic leader and often herrenvolk in nature) or tradition or the church or whatever else, which has a right to structure society which supersedes individual liberties. For our purposes, they key is they generally despise liberalism because it places limits on that authority. They tend to insist that liberalism makes societies weak even as liberal societies pound their favorite dictators into dust over and over again.

To put the spectrum another way, we might think in terms of publications: Jacobin (1) <-> Vox (2) <-> The Atlantic (3) <-> The Bulwark/Dispatch (4) <-> National Review (5); few major publications openly identify as being in (6) in the United States, but you can see editors at The Federalist or First Things platform political visions that [derive] from it. To the degree to which “horse-shoe theory” works it is because the thing that The Left and the Right-Authoritarians have in common is that they believe in an effectively unlimited claim on the individual by the community, whereas the core of liberal ideology is that the social claim on the individual is and must be limited.

Bret Devereaux, In a footnote to “Collections: The Philosophy of Liberty – On Liberalism”, A Collection of Unmitigated Pedantry, 2024-07-05.

February 3, 2025

Rational response to Trumpish provocations? Don’t be silly, we must run in circles with our hair on fire!

Filed under: Cancon, Economics, Government, Humour, Politics, USA — Tags: , , , , , , — Nicholas @ 03:00

My first entry in the “Trump tariff diary” on social media perhaps takes the situation too flippantly:

President Trump trolled Justin Trudeau about Canada becoming the 51st state.

Trump tariff diary, day 1: Governor Justin Trudeau of the Great State of Canada struck back at the Big Orange Meany by wearing particularly fashionable socks to his press conference. Ontario will remove all bottles of Jack Daniels from the government liquor monopoly distribution system. The American national anthem will be formally booed at all NHL games played in Canada from now on.

At the National Post, Tristin Hopper offers much more substantive and serious suggestions:

Order Ryan Reynolds to defame American directors until free trade is restored.

Spend 10 years relentlessly kneecapping the Canadian economy for no reason to show Trump we’re not scared of him.

Politely suggest that the U.S. may have confused us with China. Say that although both countries start with the letter C, China is the one seeking to destroy American hegemony via economic means, and we’re just an obsequious neighbour who sells them raw materials.

As a gesture of fealty to American continental supremacy, immediately adopt the U.S. Constitution as Canadian law. Uphold it about as loosely as our existing constitution so there’s no material change.

Volunteer an honour guard of Mounties to serve alongside the Secret Service. Force them to wear red serge if Trump asks.

Offer to pillory a Trudeau at Mar-a-Lago if the tariff threats stop, but don’t specify which one.

Put sugar in the crude oil so all the U.S. refineries seize up.

Instead of shutting off Canadian electricity exports, export too much electricity so that their toast burns and the coffee is too hot.

Send Trump a bentwood box filled with smoked salmon as a gesture of goodwill. When he opens it, it’s just filled with bees.

On a rather more serious note, PPC leader Maxime Bernier posted this on the social media platform formerly known as Twitter:

It’s important to understand that the 25% tariffs announced by President Trump today are NOT imposed on Canada — they will be paid by American consumers and businesses who buy goods imported from Canada. Tariffs are a tax, and Americans who will have to pay more or go without our products will be the first to suffer.

Of course, Canadian exporters of these goods will as a consequence lose clients, contracts and sales, and will be forced to cut down on production and lay off workers. Or they will lower their prices to keep market shares and will see their profits diminish.

Because 75% of our exports go south of the border, our economy will for sure be very negatively impacted by this.

The stupidest thing our government can do however to deal with this crisis is to impose the same kind of tariffs “dollar for dollar” against US imports.

The US economy is ten times bigger than ours, much less reliant on trade than ours, and much less dependent on our market than we are on theirs.

Not only would retaliatory tariffs have much less impact on American exporters, they would immediately impoverish Canadian consumers forced to pay more for imported goods, as well as destabilize Canadian businesses that need inputs from the US in their production processes. It would more than double the harm of the US tariffs to our economy.

Trade wars are bad for everyone, but they are much worse for a small country with fewer options. We simply cannot win a trade war with the US. It’s very unlikely that Trump will back down. All we will do is provoke a massive economic crisis in Canada, until we are forced to capitulate.

Another self-destructive thing to do would be to set up giant “pandemic-level” bailout plans to support everyone affected by this trade war. This will simply bankrupt our governments even more than they already are and make us even weaker.

So what should we do?

1. Double down on efforts to control our border, crack down on fentanyl dealers, deport all illegals, and impose a complete moratorium on immigration, to answer Trump’s immediate concerns about Canada.

2. Tell the US administration that we are ready to renegotiate North American free trade and put dairy supply management and other contentious issues on the table.

3. Wait and see to what extent Trump is willing to keep tariffs in place despite the harm it does to the US economy. Despite his pretenses that Americans don’t need our stuff, the reality is that on the contrary they have few other options for crucial resources like oil, lumber, uranium and other minerals, etc. He will stop acting like a bully when he sees that he can get more results by sitting down and negotiating.

3. To reduce our dependence on the US market, immediately implement an ambitious plan to tear down interprovincial trade barriers and help our impacted exporting industries find alternative markets in other countries.

4. Immediately implement a series of bold reforms to make our economy more productive, including: reduce corporate and personal taxes, abolish the capital gains tax, abolish all corporate subsidies, get rid of excessive regulation, remove impediments to the exploitation and export of natural resources, drastically cut government spending, mandate the Bank of Canada to stop printing money and start accumulating a gold reserve to prepare for the global monetary reset (which is likely part of Trump’s plan).

In short, instead of adopting a suicidal strategy to confront Trump, we must do what we should have done a long time ago to strengthen our economy and our bargaining position. The transition will be rough, but not as much as complete bankruptcy and disintegration.

My strong suspicion is that Trump’s extended tantrum directed at Canada is actually a way to provide pressure against other future tantrum targets … “if he’d do that to friendly neighbour Canada, what won’t he do to us?” An updated version of Voltaire’s quip that Britain needed to shoot an admiral every now and again pour encourager les autres.

Coyote Blog facepalms over Trump’s self-sabotage of the US economy:

Trump’s first few weeks have been a mix of good and bad for this libertarian, all against a backdrop of horror at how Imperial the presidency has become. […] Because we are all tired of those fentanyl-toting Canadians crossing the border illegally. I mean, we all saw the Proposal and know how all those Canadians are trying to cheat US immigration law.

Seriously, this is beyond awful — and not just because of the threat of retaliation, though that is real. Even if all the affected countries roll over and accept these modified tariffs without response, this is still a terrible step for the US. No matter how Trump and his very very small group of protectionist economist friends sell this, this is a tax on 300 million US consumers to benefit a small group of producers. I don’t have time right now to give an updated lesson on free trade — that will have to wait for when I am not on vacation. But I will offer a few ironies:

  • After campaigning hard on inflation, Trump is slapping a 10-25% consumption tax on foreign goods. That is a straight up consumer price increase for a variety of key products including much of the lumber we use to build homes, a lot of our oil and gas, a lot of our grain and beef, and many of our cars and appliances.
  • Much of this inflation is going to disproportionately hurt Trump’s base. No one is going to care much if a Hollywood actor has the fair trade coffee they buy at Whole Foods go up in price, but Trump voters are going to see a direct effect of this on prices at Wal-Mart.
  • Republicans have spent 4 years (rightly) condemning Federal and State governments for the economic disruptions of COVID lockdowns and restrictions. While some of the inflation of the last 4 years was due to ridiculously high government deficits, another major cause was the COVID supply chain disruptions. And now Trump is voluntarily recreating them.

The only small hope I have is that Trump is steeped from his business career in a certain style of brinksmanship bargaining that consists of taking an entirely destructive and irrational position in hopes that they folks on the other side of the table will back down and give him more than he should. My son won poker tournaments like this because he would do so much crazy stuff that no one at the table wanted to challenge him. I have always said that I don’t think Trump is a particularly good business person — he has run business after business that has failed. But he is a good negotiator, and has exited numerous bankruptcies with his creditors giving him far more than one would think was necessary.

February 2, 2025

Captain Trumpmerica versus the Post-national Maple Protectionists

Filed under: Bureaucracy, Business, Cancon, Economics, Media, Politics, USA — Tags: , , , , , , , — Nicholas @ 03:00

Donald Trump has made picking fights with the corrupt oligarchs of Mexico and Canada a key part of his appeal to American voters. Canada used to be a proud nation, but after years of deliberate mismanagement and stubborn opposition to innovation and growth, we’ve become — as Justin Trudeau so smugly put it — the first “post-national state” that has “no core identity [and] no mainstream”, because we’re a plaything for the WEF and other transnational organizations. Elizabeth Nickson calls us a “failed state” and that swapping in globalist WEF’er Mark Carney for globalist WEF’er Justin Trudeau will make no positive difference:

25% tariffs will ruin us. The tariffs mean one million small businesses — all which sell to the U.S. — will contract and many will close their doors. And then Trump, as he promised the unions, will pull “our” auto industry. Then we’re done.

Who is to blame for this?

The following is going to be crude because Canada is so boring (that’s deliberate) that no one cares. There are a thousand ultra-complex rationales on why Canada is failing and all they do is obfuscate. I’m not pulling punches, softening rhetoric — it is bad. It is urgent. This is the death of something that 75 years ago was shining, sunlit, exciting. That country? That country was killed by the Laurentian elite, weak, cosplaying Marxism to stay in power, themselves outwitted by investment bankers who plan to steal everything not nailed down. In so doing new elements were forcibly injected into the population: envy, resentment of the successful, sloth, the refusal to grow up, be strong and independent. We effectively sit on top of the U.S., seething with envy, in wet diapers.

We are a broken country. Everyone who understands the world knows this. The only people who don’t are deluded Canadian socialists, which is to say our entire elite and all our “knowledge class”. Dissent is ignored. Or jailed.

Central banker Mark Carney, WEFer paramount, is being parachuted into the Liberal party in order to sell us off to the investment banks who will harvest us for our resources. Our people? Future serfs in Special Enterprise Zones. We already have the regulation in place. No taxes, no worker rights, no enviro controls, no self-determination, no agency, no freedom. Time frame? Ten years, twenty at the outside. The inevitable end of hard-core socialism.

That is what Carney did to Canada in the ‘08 crisis, a crisis entirely created by larcenous government and investment bankers: he loaded us up with so much debt that the moment the economy turned, the working class — and Canada is now 75% working class — paid for it through interest rates so high they crippled and broke every middle class family with a mortgage. Then, he moved to England and did it to the English. His name there? Mark Carnage. During the ’08 crisis, he in Canada and the UK and Obama in the US transferred trillions in public wealth to the investment banks to keep them going after the worst crisis since ’29. A crisis they caused. That was the people’s money, not theirs.

However, as Peter Menzies points out, our Laurentian Elite are still 100% protecting us from the baleful influence of American culture … well, the commercial bits anyway:

Next Sunday, the federal agency responsible for the flourishing of national culture and identity will be swamped with complaints. The grumbling will emanate from Canadians enraged they can’t get more American culture. Yes, America may be in the process of humiliating Canada as its lamest of lame duck leaders, Prime Minister Justin Trudeau, waddles into the sunset. And, for sure, most of us are mortified that U.S. President Donald Trump has chosen to make an example of us as he launches his mission to bring the globe to heel and Make America Great Again.

But the bitching directed in the days to come at the Canadian Radio-television and Telecommunications (CRTC) headquarters in Gatineau will originate from Canadians angry they can’t watch American Super Bowl TV ads along with the game. A perennial contender to be the most watched TV event in Canada, the Super Bowl also has traditionally been the most controversial event on the CRTC’s calendar.

The USA can slap us silly with tariffs. It can send hundreds of thousands of us into unemployment and despair. It can mock our disinterest in maintaining the essentials of nationhood and drive us into unsustainable debt. Trump can brutalize our national esteem and taunt us for our cavalier attitudes towards the defence of our sovereignty. And he can lick his big beautiful lips while pondering our potential as the 51st state.

But what will really light us up Feb. 9 will be being unable to watch Meg Ryan and Billy Crystal reinvent their famous restaurant scene from When Harry Met Sally or Michelob Ultra’s production starring Willem Dafoe and Catherine O’Hara as a couple of pickleball hustlers. Or Matthew McConaughey channeling legendary Chicago Bears coach Mike Ditka for Uber Eats. And the Clydesdales. Everyone loves those Budweiser Clydesdales, particularly the cute little foal making a debut.

It doesn’t matter that the ads cost $7 million U.S. (which will convert into heaven only knows how many bazillion loonies in the months ahead) for a 30-second spot. Or that for more than a decade many of the commercials have been available on YouTube. Canadians don’t want to watch a Super Bowl adorned with Government of Ontario and Maple Leaf Foods ads. They want to watch the game like real Americans and relish the full, unfettered American experience.

At the National Post, a sad recounting of just how badly we’ve been let down by our politicians — and not just recently … this is a decades-long list of conscious self-harm for short-term domestic political advantage:

Bold counter-attacks against the U.S. can’t work, because all the ideas Canada could have put into action to make such a response viable are collecting dust on the cellar shelf. Drop interprovincial trade barriers that amount to a $200-billion penalty on the national economy every year? That only became a serious conversation in the last month. It should have been a serious conversation 10 years ago, if not more.

End supply management? Out of the question — think of the Quebec votes such a move would cost. The Big Milk lobby is a strong one.

How about resource development? Because Canada is ultimately a resource-exporting economy? No; we’ve been cancelling energy projects at the slightest objection and building more legislation to stand in their way. Industries like mining and fishing, already mired in growth-choking regulations, are increasingly refashioned by governments into welfare and “reconciliation” initiatives, repelling private investment that would have brought prosperity to the country as a whole.

Diversify away from the Americans? We’ve only done the opposite: since 2017, Canadian trade has become more focused on the U.S.

Canada should be a prosperous, growth-oriented economy, but instead, its government — and the people who continuously vote for economy-stagnating policy — settle for subsistence and redistribution of a shrinking pie of wealth. Their choices for the past decade have left us without enough fat to get through a cold trade winter.

Prompt retaliatory counter-tariffs are hence unwise. Such a move would put Canadians in the path of two separate blows, one from the front, the other from the back. And while immediate counter-tariffs could affect Americans whose support the president depends on — as was the case in the 1930s, when Canadian counter-tariffs prolonged the American Great Depression (while inflicting domestic pain) — those Americans have much bigger economic fat stores. In a trade war of attrition, expect Canada to lose.

That leaves us, unfortunately, with the less-glamourous immediate option: play this by the book. The United States-Canada-Mexico free trade agreement, which will be violated by any across-the-board tariff Trump applies, needs to be challenged with the mechanisms agreed upon by party states. During the process, Canada must remind Trump that it’s just following the agreement that he made.

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