Ladies and Gentlemen, welcome to the American Economic Zoo. This season we mark the retirement of our great leader and founder, President Trump whose tariff protection initiatives starting in 2018 made all our new exhibits possible. So let me introduce you to the new examples of Homo Americanus Economicus for your delectation…
Our first new exhibit is a new species of genus Economicus Bureaucraticus; sub species Sanctionis. We are reliably informed that they now number in the tens of thousands around Washington where they nest in Federal buildings and of course feed off the taxpayer. Once a threatened species due to the depredations of free trade, President Trumps protectionist trade wars have enlarged the swamps they inhabit and naturally they have proliferated very nicely.
The defining characteristic of the species is an almost superhuman ability to categorize goods and services into the infinite sub categories called for in trade regulations. For example European steel is subject to sanctions, except surgical stainless steel for medical purposes, yet whole groups of Sanctionis, sometimes 200 or more, will spend an entire summer arguing, dancing and fighting among themselves over whether the definition of the word “surgical” includes steel for razor blades and whether “Medical purposes” should includes preoperative shaving of certain parts of the anatomy but not facial hair. Tens of thousands of pages of federal regulations are thus generated which has been a great boon to the paper industry. The effect on the economy has been calming since it now takes an importer over two years to navigate the sanctions and import goods. Watch what happens when I prod one; it immediately starts typing a new regulation. If you really want to see a feeding frenzy, ask them the difference between a metal ‘tube” and an “extrusion”.
Our next new exhibit, I confess is only a model because we cannot find a specimen. It appears that almost the entire species of Americanus Genius Inventorus has migrated overseas. This species and its symbiotic partner venturus capitalismus seem to find it too hard to breed in America these days. The problems are multifaceted. Members of the species now find migration too difficult if they have funny sounding names and relatives in places like (excuse the profanity) Iran. Then there is the question of intellectual property flows – we let good ideas in, but won’t let them out. Then there are sanctions which restrict who they can sell to, tariff walls and quotas all of which make it just too hard to breed good products and then of course there is the problem posed by our next exhibit Lazy Industrialis.
Lazy Industrialis is a proliferating species, it has overtaken Americanus Industrialis almost everywhere. Its defining behaviour is just to sit in its lair, fat and happy, waiting for prey to walk by. It no longer needs to work or invest to build a better or cheaper product to attract prey because, thanks to President Trumps 25% tariffs, the prey are simply herded into its jaws. It is a lazy beast, rather like a stonefish – butt ugly, a bad employer, a non investor and a lazy manager and is not receptive to the new ideas produced by Inventorus. It just continues to lie in its lair, producing the same old crud from old factories full of old ideas because it can, as long as it is protected by the warm blanket of tariffs. When I prod this species with a stick, it cries to Congress for more industry protection.
As I mentioned Americanus Industrialis is almost extinct,which is why we only have an image of one. By comparison with sub species Lazy Industrialis it was lean as a Cheetah because it had to fight the world every day for its prey. It loved new ideas, it was smart, international competition is a hard game. However that species is now almost extinct. What killed it was having to use overpriced American products, produced by lazy Industrialis, as inputs to its own products which raised their cost and made them uncompetitive. Picture a Cheetah trying to hunt gazelles with a twenty pound lead weight strapped to its back and you get the idea.
Our next exhibit is a feline of the species unionis, commonly called “fat cats” on account of their weight. These live as a parasite on Lazy Industrialis in their factories. Fatcats multiply and drive up wages without increasing productivity. The normal reaction of Industrialis was to get rid of them but these days President Trumps tariffs protect both Lazy Industrialis and the union parasite as well. When I poke this one he asks congress for tariff protection.
The lugubrious group of scowling people in the next cage are Americanus workerus of the tariffi variety. They are only found in factories owned by Lazy Industrialis. Their perpetual scowl, grey hair and feeble movements are caused by extreme stress because they know that the only reason the have jobs is because of President Trumps tariffs. Their anguish if made worse by watching TV where they see the similar international products to what they make, but with higher quality, being sold for half the U.S. price. When I show one of them this photo of a Mercedes convertible watch him start crying.
Now this exhibit is Lawyerus tradii. Some say they live symbiotically with Bureaucraticus because they feed of the tariff regulations that species generates and in turn the court decisions generated by Lawyerus spawn new regulations. Watch what happens when I ask one to define what the phrase “for the benefit of the American Economy” really means. If we watch long enough, he will tie himself in more knots than a boa constrictor. Watch what this one is doing closely; he is building a case that Chinese sugar free chewing gum is not subject to tariffs because it must be used by diabetics – so its tariff free pharmaceutical medicine. Our courts are now crammed with cases like this about tariffs, providing much needed work for attorneys and judges.
Sadly this exhibit is also a dummy. Americanus Mechanical Engineeri is thought to be extinct. This species designed cutting edge American products and the factories that built them. They fed on international competition, always trying to get one jump ahead by building better value products in state of the art factories. However tariffs removed the need for their services, they stopped breeding or migrated overseas. These days lazy Industrialis have no need for the services of top flight engineers, when their products start falling behind the international competition, they just lobby Congress for more tariff protection instead of doing R&D and new product development.
Feel free to add your own caricatures, including of me.
In my opinion, growing up behind a huge tariff wall in Australia and seeing the negative effects first hand, I have come to the conclusion that industry protection is like booze or perhaps heroin. It produces a short term ”high” but over time it destroys the physical and mental health of the user. I have vivid memories of cars that were twice the price and half the quality of similar overseas products. I remember buying something from overseas, being called for customs inspection, waiting while an inspector determined what it was and calculating the customs duty, then paying before I could take my goods. I remember visiting over manned factories producing shoddy goods on antiquated production machinery. I remember watching American movies and TV and marvelling a the cars, clothing and appliances available for apparently little money. Everybody in Australia had a job, but there was no innovation and no future. Manufactured goods were expensive and not good quality.
Eventually, around 1970, Government woke up to the huge cost of tariff protection to our farmers, miners and innovators and said “enough!”. Would that Congress would do the same.
Of course everyone has horror stories about unfair international trade practices. I have my own store too. No country has clean hands. However that does not change the fact that free trade benefits everyone. Yes, the globalisers (mostly American!) are playing both ends against the middle. My worry is that President Trumps obviously heart felt concern for middle America is leading him into serious policy error. What say you?