THE DISCUSSION IS OPEN - WEEK SEVEN - PRESIDENTIAL SERIES: UNREASONABLE MEN - May 23rd - May 29th - Chapter Seven- The Tariff - (pages 143 - 174) - No Spoilers, please

[Lorna, Assisting Moderator (T) - SCOTUS - Civil Rights]

This was an interesting chapter about tariffs, the most interesting was the opening segment regarding James Madison and the First Congress of the United States taking up the matter of tariffs as a means of rectifying the huge debt from the eight years of war. However, it was Madison's intent that the tariff would be only a temporary measure to provide the necessary revenue. It was also interesting to see Taft's view of the tariff as a flawed tax code needing correction. In his inaugural address, Taft made it clear that many of the issues he intended to pursue during his presidency were those important to Roosevelt, including the construction of the Panama Canal, forest conservation, and money reform. He felt the most important issue was a restructuring of the tariff and the institution of alternative taxes to the delight of Roosevelt who then departed.

It is hard to judge what effect Nellie's stroke had on Taft's presidency. We learn that Taft then directed his anger at La Follette and his insurgents as they continued to reject his efforts at compromise in carrying out some measure of reform of the tariff bill. There continued to be unrest in the country as it became clear that there was not to be a genuine reform of the tariff policy.

[Robyn]

This was a harder chapter for me to get into. I'm learning a lot from this book about shenanigans in Washington, and it's helping me make sense of what I see as illogical behaviors out of our current Congress. As I read about the defining of the tariff rates and then the redefining after the bill had passed I was confused. I really liked the progressives approach - asking data-driven questions like which specific imbalances were being adjusted. In the end, I don't think there was any reform in the tariff.

Also, is it just me or did Taft seem to say what was needed to get elected, and then immediately start doing as he pleased? Reading everyone's posts, I can't figure out whether he did it unintentionally, or on purpose. Michael - do you have any guidance?

The speech in Minnesota was a complete disaster. He claimed the tariff bill was some huge success, when the people knew it was business as usual. I guess he was operating on the idea that if the President said it, it had to be true?

I agree with the rest of you - I like TR a lot more than I like Taft. I'm not seeing a lot of leadership out of Taft.

[Ann D]

I apologize for being away from the discussion for so long. I spent 3 weeks in Europe and was away from my computer.

I am now caught up with the reading and will attempt to answer Bentley's questions.

1. Do you think that tariffs are good or bad? Why or why not?

I think that it depends on the times, as well as the goals and types of tariffs implemented.

The initial tariffs implemented by the young U.S. appeared to be successful attempts to raise revenue and give beginning American industries a chance to get established.

By the time TR and Taft were dealing with tariffs, the whole system was a corrupt mess, designed to make industrialists even richer. These men told Senators what they wanted and the Congressmen complied.

When the Smoot-Hawley Tariff greatly increased American tariffs in 1930, it helped spur retaliatory tariffs and deepened the worldwide depression.

Tariffs can have a place, but they can also backfire.


2. If you worked in an industry where companies were going to the Philippines, China, Taiwan, India to capitalize on a less expensive labor pool - how would you feel about tariffs to protect your jobs and your manufacturing industry?

Yes, of course, I would want protective tariffs. The Chinese and other emerging economies could only compete because of very low wages and poorly regulated working conditions.

However, I have not worked for such an industry and I don't think that higher tariffs could have prevented the huge changes in trade that have taken place in the last 50 years.

3. Let us say you make solar panels in the United States ..etc.

I believe this has actually happened. The Chinese were accused of "dumping" solar panels on the U.S. to eliminate the competition, and the tariffs were raised.

4. Are you the kind of person who is only interested in the lowest price no matter what is the country of origin or how it affects American workers overall? Do you just not care one way or the other?
For years we did not buy foreign cars because we wanted to support American car makers, but we got sick of the poor quality. In 1998, we switched to Toyota (still driving that Avalon) and later Honda. Quality is most important to me - not price.

5. Are you for Nafta - and any free trade agreements even if the end result is fewer jobs in America for Americans?

Free trade agreements can increase trade and benefit both countries. People can't buy American imports unless their businesses can export to the United States.

I wish I knew more about NAFTA. I have heard that it didn't work out the way it was planned.

6. Who had it right during this time period - TR, La Follette, Taft, Aldridge, Cannon, or somebody else?

I agree with La Follette, who exposed the corruption behind the current system and wanted a commission of experts to determine rates "scientifically." p. 146

Taft just wanted the whole issue to be over so that he could go play golf.

7. Do you think that the Standpatters and Cannon were concerned that much about the effects upon American industry or were they more concerned with their campaign financing or fueling political machines? Were they actually with their obstructionism "encasing the government in a cocoon of corporate influence" as the author writes?

I think they convinced themselves that what was good for industry was good for the country. (And all those corporate campaign contributions sure didn't hurt.)

6. How do you feel about the trade imbalance with countries like China? How do you feel about Trump's proposal on tariffs?

I would like to see some concrete proposals from Trump on this issue instead of empty slogans to rile up the crowds.

[Jim]

One of the first questions asked was:

Do you think that tariffs are good or bad? Why or why not?

I have mixed feelings about tariffs. I can see how tariffs can help new industries and farmers who need protection for their crops.

However, once the government started tariffs it became a corrupt bargain where legislators traded voting for tariffs in exchange for votes and money for their campaigns. From my limited reading about tariffs they have not been an economic stimulus for industries.

Trump's "protective" tariff to stop Ford from building cars in Mexico is popular with workers who see jobs taken away from them. I really don't think that Trump's plan will help the American worker. If Ford brought the manufacturing back to the US it will raise the price of the car and hurt car sales of smaller vehicles.

I think this chapter on tariffs show Taft's weakness in trusting people and the political process. He took people at their word only to find that they didn't keep their word.

[Jim]

Jill wrote: "David wrote: "In regards to Taft in this chapter, one thing I haven't seen mentioned in the discussion yet was the effect his wife's stroke and disabilities on him afterwards. It seemed to me as if..."

I think her stroke was devastating to Taft. He relied on her support and her knowledge of the political process. TR went to her when it looked like Taft might lose the election and she was very helpful to him in his work in the Philippines. I think she was key to his successes and the reason he ran for President. I think things would have been different if she had stayed healthy.

Bentley wrote: "Another thought - have you ever seen anybody who is passive aggressive - they are told to do something or act in a certain way and they bungle it (on purpose) and make it appear that they were doin..."

Bentley wrote: "Helga wrote: "On page 150, La Follette started a magazine to propagate his ideas and to expand the new progressive movement. LF really had a lot of energy and commitment and wanted to spread his wo..."

[Robin]

Ann wrote: "Taft just wanted the whole issue to be over so that he could go play golf..."
hmmm, that sounds like Eisenhower's approach to civil rights disputes during his presidency. Sorry, you can play golf AFTER you've fulfilled your presidential duties.
Ann, I agree with your point about La Follette's wisdom in seeking a panel of experts.

[Vincent]

Teri wrote: "There are positive and negatives to tariffs and of course a conversation in today's world on tariffs would have to include the Trans-Pacific Partnership. From what I understand of it, the gains the..."

The Trans Pacific Partnership is the worst possible deal for the US.

Public Citizen did a 23 page summary of this bill - link below

http://www.citizen.org/documents/anal...- november-2015.pdf

This has since been updated but I don't have a link to that.

This is not a total failure to protect America, the environment etc. - but a gift of access to our markets - the right to access to our markets - for a pitiful connection to try to offset China in the Pacific.

I can go on for long but please read it and send me - off the book sessions - any questions you might have.

[Vincent]

Hi Folks

Some notes on this chapter before I go to comment on all your interesting comments so far.

pg 144 para 5 indicated the “spring import season” passed - does anyone know why this was the case? Did shipping maybe decline during the winter months due to the North Atlantic?

pg 146 para 3 “free trade was considered heresy” - we felt the need to protect our industries I guess. A shift from today’s “global economic thinking”

pg 154 - interesting that Taft said that the reason for tariffs was honestly reflect “the difference between the cost of production abroad and here.” so to level the playing field it seems his philosophical intent was. That seems to imply that Americans had generally a higher cost of production that outside manufacturers. True???

pg 161 para 6 - the elimination of “art duties so that Pierpont Morgan could bring home his European collection tax - free” - interesting the last time I checked original art - not prints or factory made are - still comes in duty free - I wonder if it is from then. Found this out bringing some inexpensive but original painting from Europe.

pg 165 para 7 it jsut struct me that Taft referring to Clapp as “a lightweight” is interesting as Taft could have called anyone/everyone that. And did he think that in this area (maybe different in judicial roles) that he was a heavyweight?

pg 169 para 7 - Taft begins to question Aldrich’s sincerity - about bloody time!

pg 172 para 1 & 2 Cannon on Fowler - check the DNA bank to see if he is a ancestor of Donald Trump

pg 174 Dolliver on the Trade Bill - “every paragraph drawn by the parties in interest” - this is our current TPP - negotiated and organizations such as the Sierra Club, any Unions, had no input at all. Negotiated by and for American industry- and at the cost of the American people now and in the future (how old is NAFTA now?)

[Vincent]

my answers to the questions in post 32

From post 32 - Topics of Discussion:

Do you think that tariffs are good or bad? Why or why not?

They can be good or they can be bad - if they protect a fledgling industry for a period of time - especially if that can be a critical industry for the country they could be good - if they are there to insulate the profits of a developed industry that is different.

Not mentioned at all so far in what I have seen and read is “fair trade protection” - subsidizing production to export unemployment etc.
===========================================
2. If you worked in an industry where companies were going to the Philippines, China, Taiwan, India to capitalize on a less expensive labor pool - how would you feel about tariffs to protect your jobs and your manufacturing industry? Would you feel differently if corporations going overseas did not affect you?

If it is only to reduce costs and the global market does not force the company to do that to stay in business then it is a different question that if the cost reduction is only sought to increase profits. If I worked for the organization it becomes more personal but if the firm would fail with the move where do the rights of a non-invested worker stand?
==============================================
3. Let us say you make solar panels in the United States for price x and you are really paring costs but you are a made in America product using US workers in US located companies - how would you feel about the US importing solar panels from China which could undercut your company and put it out of business because they pay their workers much much less and do not have the overhead that US companies have? Would you be for tariffs or quotas if that were the case?

So hard - especially with China where so often the initial capital is from the government not individuals or private partnerships or corporations. For a period of time protective tariffs would be OK but then comes the question of possible dumping - subsidies to the foreign companies - with good treaties they have to control environmental impacts too. And then from a national security point of view do we need a viable solar panel industry here?
American workers, like all workers, must be flexible and able to change - it happened to the wagon and buggy industries when that dirty dog Henry Ford came along.
============================================
4. Are you the kind of person who is only interested in the lowest price no matter what is the country of origin or how it affects American workers overall? Do you just not care one way or the other?

I care about fairness and national security - about the environment - and I think that we in first world nation stoke the fires of war if we do not let people in developing nations earn a fair income if they are willing and able to offer competitive products (competitive includes quality by the way)
======================================
5. Are you for Nafta - and any free trade agreements even if the end result is fewer jobs in America for Americans?

Are these “free” and are they ‘fair” and are the dispute stipulations acceptable? - If they are free and fair do we have the right to prevent others from earning a living. We never object to the fact that Boeing or Cray dominate their industries. That Caterpillar and Deere tractors are all over the world.
=================================
6. Who had it right during this time period - TR, LaFollette, Taft, Aldridge, Cannon, or somebody else? Do you agree with Taft's approach on tariffs, Lafollettfe's and Beverage's, Cannon's, Aldridge's or TR's? Did any of them get it right? Why or why not?

LF was the best - Taft was a whimp - TR had to run the country and admitted he was not good with money stuff - if LF got his way however he would have had to have been more reasonable in implementation.
================================
7. Do you think that the Standpatters and Cannon were concerned that much about the effects upon American industry or were they more concerned with their campaign financing or fueling political machines?
I think they were concerned with their stuff - believing as the climate deniers do today - that all will be OK in the end.

===================================
Were they actually with their obstructionism "encasing the government in a cocoon of corporate influence" as the author writes?

YUP
=================================
6. How do you feel about the trade imbalance with countries like China? How do you feel about Trump's proposal on tariffs? Do you agree with the candidate that this will bring back jobs or do you agree with Friedman that it will do the exact opposite? (Note: We are not political - we are discussing the current climate for tariffs as it relates to our history and potential new wrinkles regarding protectionism and tariff law here - no matter who the candidate - this subject would be discussed since we are on the subject of tariffs).

Trump’s proposals on tariffs (this of course is not a presidential decision) would hurt us terribly I think as counter measures would be taken against us.

The trade imbalance is partly because we are so rich and have the strongest currency in the world.

Most initial western movement towards China in particular was to be there when this big big market would open up. I was working at the time for a European based multinational and the goals were not initially for “cheap labor” but for market access.

Most Chinese are one generation or less off the farm - they are just trying to live a life somewhere comparable to that of us in first world nations.

=============

Sorry I cannot figure out how to make my replies bold etc

[Vincent]

Michael wrote: "This chapter was challenging to write because of the difficulty of discussing tariffs without putting people to sleep. As Robin put it upthread, the topic doesn't exactly catapult people from their..."

In response to your fourth paragraph I would say that the trade deals being discussed these days are neither "free" not "fair"
(full disclosure I am/was a Bernie guy - and I believe Trump's comments are not really well thought out at all - just his "sales pitch") (full disclosure two I spend most of my career working in the steel business with with plants mostly in France, Belgium, Germany - some India, Taiwan China etc too)
I think Americans can compete with fair competition - but it must be fair. The most modern stainless steel plant - for flat rolled stainless - was build by Thyssen Krupp in Alabama and began production in 2010 - now owned by the Finnish Outokumpu.
It is just we cannot permit our people to be educated at such a level they cannot compete in the higher technology industries.

[Vincent]

Jim wrote: "One of the first questions asked was:

Do you think that tariffs are good or bad? Why or why not?

I have mixed feelings about tariffs. I can see how tariffs can help new industries and farmers wh..."


Regarding Trump and Ford going to Mexico I think that NAFTA would make it almost impossible to impose a special tariff in that situation.

[Glynn]

I read this chapter twice because the tariff issue seems pretty complicated. Tariffs were supposed to be a temporary measure to help the fledgling nation get up to steam with other countries. The tariffs soon became a crutch, I think, and politics took over, and they became a permanent fixture in our economy. I think that tariffs are not such a great idea but they are so interwoven into our system that it would be a major effort to rid ourselves of them. President Taft’s efforts to reform the tariff code seemed to have failed on this issue. I think his whole attitude toward the presidency didn’t help and with his wife Nellie having a stroke it also put a lot of pressure on him. I think all in all Michael makes this complicated issue pretty entertaining outlining the intrigue that takes place during this time. It was entertaining to read about La Follette’s “little band of insurgents” and the way they worked together on the senate floor to try to foil the Standpatters.

[Nita]

Robin wrote: "Ann wrote: "Taft just wanted the whole issue to be over so that he could go play golf..."
hmmm, that sounds like Eisenhower's approach to civil rights disputes during his presidency. Sorry, you ca..."

I agree with Ann that "Tat just wanted the whole issue to be over so that he could go play golf . . ." Also, Robin makes an excellent point about La Follette's wisdom in seeking a panel of experts.

[Mike]

When reading this chapter (and the previous chapters as well), it struck me how much the actors may change over time, but the same arguments come back. Once again we find ourselves talking about raising tariffs to product American manufacturers in the current election cycle. We also routinely see industries attempting to get increased tariffs, protections, or influential laws to assist them in business. I think one of the key takeaways from discussions on tariffs needs to be, what is the impact to the end consumer? As the chapter mentions, the consumer ultimately pays the cost of higher tariffs, whether through increased prices due to lack of competition, or higher import costs. In the current environment, with a wage growth of almost zero, the impact to the end consumer of higher tariffs would be devastating (not to mention the impact to our exports).

[Jack]

1. Uncle Joe once again wonders what is "this so called demand for tariff tinkering"? Why did he feel that there was no need for new revenue legislation?

I have always wondered about tariffs. I am starting to understand why they have gone away from this reading. No new legislation was needed due to the fact that the status quo was just fine, according to them. Tariffs are to protect industry from commerce outside of a country, or so I thought. These tariffs favor manufacturing which protects Eastern commerce. Raw materials are impacted so the Western states have little protection and therefore costs which are a tax on the consumer. Consumers are Western states since those who do the manufacturing are in the East. As an aside note, I am starting to see movement on income taxes in this chapter. It is remarkable to see that our country’s income was once tariffs and is now almost exclusively income taxes.

2. Uncle Joe was convinced that the tariff situation was fine just the way it was. Was he right or was he mistaken?
Tariffs at that time were not fine. They are completely setup to support political interest groups. Cheaper production and labor are not reasons for a protective tariff. The insurgents see this as a tax on consumers. A restriction of trade. All these tariffs discussed in this chapter deal with political corruption. Tariff law is almost a passthrough from the lobbyists whose industries stand by to benefit. Not much has changed I am sure even though I do not follow tariff law today. The discussion of brining in an income tax is a novel idea of getting away from tariffs as source of income especially since it did not appear that the tariffs were doing what they should have been…being a source of government income.


3. What are your thoughts on tariffs, Uncle Joe, other Speakers of the House and the situation with Uncle Joe obstructing legislation whenever he wanted to? Have things changed or have they stayed the same?
Controlling which legislation comes to the House is a boon for any party. The speaker by default controls both political parties. By stacking the committees with his allies, he ensures only his legislation will come up for a vote. I am amazed that our country progressed as much as it did with such poor congressional rules. Today is not much different except that we control our allies by earmarks. Getting a bill passed involves port barrel politics to buy off your friends. Military defense spending is an interest of mine and I get to see lots of pork these days.

[Jim]

Mike wrote: "When reading this chapter (and the previous chapters as well), it struck me how much the actors may change over time, but the same arguments come back. Once again we find ourselves talking about ra..."

Mike,

I agree. You could change the dates and names and it would match what is being debated today.

[Simonetta]

This chapter was a little difficult to read, but it’s definitely not the author’s fault. In fact, Michael Wolraich did a great job making it lively by adding anectodes and frequent windows into people’s character and emotions. I just don’t understand politics and economics very well. I can see however how tariffs can be abused and lead to corruption, and how free trade – if obtainable - is ultimately better. I liked the “flashback” to 1789, which gives a very good background to the issue.

I think the author conveyed the passion of the tariff reformers very well. His sympathy for Taft is also coming through quite clearly. He also communicated well Taft’s feelings after Nellie’s stroke, which give a very good idea of Nellie’s importance in his life (which has been discussed previously).

[Ann D]

One thing this book continually brings home to me is the influence of lobbyists on legislation. It seems it was just as bad in the old days as now, but now it has more impact because the role of government has expanded so much.

Also, Uncle Joe reminds me of the leaders of both parties in Congress.

[Vincent]

Glynn wrote: "I read this chapter twice because the tariff issue seems pretty complicated. Tariffs were supposed to be a temporary measure to help the fledgling nation get up to steam with other countries. The t..."
just a side comment that tariffs have other roles also - "most favored nation" status in trading with the US (making most duties almost zero) is a coveted position to be in and we use that tool diplomatically as well as economically.

Sometimes also getting up to steam takes a long time - solar panel companies in the States still have a dismal success and survival rate - remember that we have given farmer subsidies for decades and oil companies too.

[Vincent]

Ann wrote: "One thing this book continually brings home to me is the influence of lobbyists on legislation. It seems it was just as bad in the old days as now, but now it has more impact because the role of go..."

The influence of lobbyists on legislation for tariffs is now in the midst of seeking the biggest single success ever in the Trans Pacific Partnership - 11 countries get favorable treatment to the level of methods to challenge US laws and regulations - written mostly by lobbyists and industries - drug companies get extended pattern protection - wait longer for generic drugs etc etc. domestic content on cars - to be called made in America - declines for components from these countries and with their abilities to control their currency a car with truly only 20 or 30% domestic content (by current measuring methods) could possibly be called "American made"

[Ann D]

It sounds bad, Vincent.

[Jason]

I was really taken with this chapter. IT seemed to fly by! I'd like to echo Robyn's comments. I like TR better than Taft and it does seem that Taft said what he needed to in order to get elected and the did what he wanted. I never thought I would find a discussion on tariffs so interesting but I did. It says a lot about Michael's writing style.

I am also enjoying the discussion and awesome material that everyone is posting on the boards, so thank you all for making reading this great book all that more enjoyable!

[Pamela]

I liked this chapter too. It was an interesting discussion of a complex subject. I have never understood tariffs too well. Reading about it. it always sounds like such a good idea but never seems to work that well. It always seems to wind up the way Michael mentioned in this chapter - 70 pages long and 705 categories. As for protecting American industries and jobs, everybody else just raises their tariffs too.

I also liked the income tax part. Talk about a plan that backfired!

[Rachel]

I like this chapter, I like the beginning of chapter where they go back to the founding fathers, and explained how the Tariffs began (Started with Madison). I also felt sorry for Nellie as well. It sounded like she had a stroke or something? And it sounded like Taft lost his main political adviser. I really didn't like Taft starting with this chapter. I can understand him being upset about his wife, but I thought he was taking it out on the wrong people and ruining himself Politically. The only thing he accomplished was just proving to people that he was not a progressive but on the side of the Standpatters.


3. What are your thoughts on tariffs, Uncle Joe, other Speakers of the House and the situation with Uncle Joe obstructing legislation whenever he wanted to? Have things changed or have they stayed the same

I think that Uncle Joe is living on borrowed time honestly, you can see things are changing at snail pace. I think that if it had not been for Taft his powers as speaker had been greatly reduced. I don't think that he is helping his situation though- he is offending a lot of people. which can come back to bite him later on .

[Jordan]

#1-3.) Ah, tariffs. Another favorite of my former economics professors. They always framed the question as, “Do you upset economic equilibrium to help the few over the many?” Unfortunately, while tariffs may protect some jobs (particularly manufacturing) they inflate prices above market value which affects consumers. Who deserves more protecting in this situation? I think it becomes a personal question then. My family and I have no ties to industries that have increasingly moved overseas. So, I personally think tariffs are by and large a bad idea. They also worked better when the world’s economy was less global, like when the Founding Fathers set them up. But now, tariffs can really disrupt core businesses across the world and the inflation of prices hits more pocketbooks.

4.) Honestly, I will always go for the lower price on pretty much any product. From a family of financial advisors, accountants, and general businesspeople, the number on the books is what I look at. I realize that’s not the best way to be but I do have exceptions that I’m willing to pay more for. Humanely-raised meat for example because I’m the granddaughter of farmers who sell sheep to slaughter. It comes down to a personal decision I guess.

5.) Nafta seems to have worked fine over the years. There were job losses in the US but it’s hard to pin down the numerical plus/minus of job loss/creation that was dependent solely on Nafta I would assume.

6.) I mean, Taft was trying to help by demanding tariff reform but in the end he rolled over concerning the tariff changes. That was disappointing. I really liked La Follette and his little band of researchers digging into the tariff code to the embarrassment of other senators. It would have been frustrating to be on the other side of a fight with him but man is he entertaining as a reader!

7.) I think they were protecting their political careers and we see the same thing today. La Follette’s roll call speeches seemed to be effective at truly informing the voters about what their politicians were up to. It’s difficult to get the true answers concerning votes on anything these days.

8.) I’m not brushed up on Trump’s tariff proposals but I do not think bringing back extensive tariffs would create jobs. It would have the potential to be a bad economic and diplomatic move in general.

[Ann D]

Did I miss something? Is there a reason why the week eight discussion was not opened on schedule? Do we know when we will start discussing the next chapter?

[Jim]

Ann wrote: "Did I miss something? Is there a reason why the week eight discussion was not opened on schedule? Do we know when we will start discussing the next chapter?"

Thanks for asking, I was looking for the next chapter also.

[Teri]

Hi folks ~ Bentley is on vacation this week in conjunction with this week's U.S. Memorial Day holiday, but will be popping on from time to time as schedule allows. Keep watching for the thread to open. Bentley will also likely post here that the week 8 thread is open for discussion.

Thank you for understanding!

[Vincent]

Jordan wrote: "#1-3.) Ah, tariffs. Another favorite of my former economics professors. They always framed the question as, “Do you upset economic equilibrium to help the few over the many?” Unfortunately, while t..."

Hi Jordan

Just a couple of comments -

For the US countries with "most favored nation" status have today duties that are almost if not totally zero at least in my experience in the steel and some manufactured products industry.

The place that higher duties exist at all from these countries tends to be from successful anti-dumping complaints - which can add often such high duties that a country or manufacturer will sometimes just abandon trying to sell to America.

Regarding your remark on 5 - NAFTA - there is maybe more environmental problems than work loss problems.

Just another side remark is to think about how China was not at all the export giant it is today and if the amount of trade envisioned with Mexico had developed it would have been a boon for us all and there would be fewer if any Mexicans crossing the border to make a living. North American prosperity would have gotten a big shot in the arm

[Savannah]

Jill wrote: "Understanding Taft, who was not a complicated man, is still a difficult task. but for me it boils down to these few facts.

I totally agree with Jill's assessment of Taft.

[Savannah]

This chapter begins with James Madison's support of a tariff in order to protect the infant industries of the US. I think that, but I am not totally sure, that Madison was being guided by Alexander's Hamilton's policies. At this particular time, I think that Madison and Hamilton were still on friendly terms. The theory of commerce at that time was based upon Adam Smith's ideal of free trade and an elimination of all tariff's. Hamilton agreed with many of Smith's ideas, but he felt that free trade was not the appropriate way to go in the early formation of a nation. Hamilton's pretty much created almost all the financial and trade policies during the early republic.

[Savannah]

Bentley wrote: "Topics for Discussion:

1. Uncle Joe once again wonders what is "this so called demand for tariff tinkering"? Why did he feel that there was no need for new revenue legislation?

ANSWER: He was benefiting from the situation and did not care how it affected the ordinary person.

2. Uncle Joe was convinced that the tariff situation was fine just the way it was. Was he right or was he mistaken?

ANSWER: He was mistaken. It was destroying smaller businesses thus creating a concentration of power. This not only creates an oligarchy thus threatening democracy, it also threatens the development of new products.



3. What are your thoughts on tariffs, Uncle Joe, other Speakers of the House and the situation with Uncle Joe obstructing legislation whenever he wanted to? Have things changed or have they stayed the same?

ANSWER: Tariffs were a good for protecting infant industries in the early Republic, but as the industrial makeup of the nation changed, they became a means for the large corporations destroying competition from within and without the USA. These corporations used their power to demand exorbitant fees from their customers. HOW IS THIS ANY DIFFERENT FROM A TOTALITARIAN REGIME THAT ENSLAVES ITS PEOPLE?? ! !

I don’t know enough about the rules of Congress to evaluate whether or not current speakers have the immense power which Uncle Joe had. They certainly seem to have the ability to make a bill dead on arrival and to control their party members through committee assignments. Would like to know if other countries have a system that is more successful in implementing the will of the people while at the same time preventing mob rule.

[Lewis]

The tariff as described on page 145 sounds like a nightmare that has grown into a messy cancer that is difficult to control and not able to be recognized in comparison to what the initial intention started out to be. Is this just normal politics? How are these kinds of tangles overcome or avoided today?

[Mary]

1. Uncle Joe once again wonders what is "this so called demand for tariff tinkering"? Why did he feel that there was no need for new revenue legislation?

Uncle Joe was a Standpatter who took a "if it ain't broke, don't fix it" approach to tariffs. He felt that as long as sufficient revenue was coming in through tariffs, there was no need to make a change, especially if reform would harm relationships with trusts.


2. Uncle Joe was convinced that the tariff situation was fine just the way it was. Was he right or was he mistaken?

He was mistaken. The tariff system at the time was based on political influence rather than economic principles, since US industries didn't need protection from foreign competitors very much. In fact, the tariff system encouraged consolidation and diminished competition. Once again, we have an example of a politician using his legislative power to benefit the wealthy at the expense of the ordinary consumer and small business owner.


3. What are your thoughts on tariffs, Uncle Joe, other Speakers of the House and the situation with Uncle Joe obstructing legislation whenever he wanted to? Have things changed or have they stayed the same?

I find it interesting that even then, when there was no Soviet Union, politicians used the term "socialism" whenever they wanted to evoke emotional opposition to a bill or a concept when in fact there were good merits for the average person. Or they used fear, such as warning that the economy would collapse under tariff reform, when they offered no proof.

[Nick]

As a more-than-casual follower of macroeconomic theory, I think tariffs are generally a bad idea for a developed economy (stop the presses!) Currency should flow naturally as good and services move, and this is best accomplished by reducing barriers. Free trade is not only good economic policy, it's good foreign policy, as it represents 1/3 of the Democratic Peace triad. TL;DR: trade prevents wars.

The "trade imbalance" often espoused by the Trumps of the world is a non-issue, as we no longer utilize a mercantilist economic system. With capitalism, trade deficits are less important, because both sides are able to move resources and create wealth simultaneously. Trade is no longer a zero-sum event.

TR certainly didn't approve of Taft's handling of the event, but I think he would not have been overly sympathetic to the LaFollette wing either.

[Vincent]

Nick wrote: "As a more-than-casual follower of macroeconomic theory, I think tariffs are generally a bad idea for a developed economy (stop the presses!) Currency should flow naturally as good and services move..."

understanding "mercantilist economy" for Trump would likely call for some study and information - just because I don't think the fellow has ever thought about it - being - in the words of David Brooks a fellow who "was born on third base" - Brooks went on to note that Trump had not "hit a triple" - just an observation on a book comment - (but I would think a vote for Trump is a vote against the Constitution)

Free trade is good but if not fair it is not universally good and that is what free trade should be - fair

I agree deficits are subjective - If America has a net worth of say a $billion - so what if we lose $10,000 a year? - as long as we know it and don't ignore it.

[Bentley, Group Founder, Leader, Chief]

Folks have been away on personal travel this past week with very bad and intermittent internet service - I have opened up the next two threads and will add to them as I can - will be in flight tomorrow and back home.

[Robyn]

Sometimes bad or intermittent internet is a blessing in disguise. Hope you had a fun and relaxing time.

[Bentley, Group Founder, Leader, Chief]

I did and I didn't (lol) - get a little bummed up when my internet does not cooperate - that is what happens when you depend upon family members to have the same internet quality and speed as you do at home.

[Kacy]

My biggest take-away from this chapter was that tariffs were a mess, with so many different prices set and the concerns of different corporate interests at stake. I can understand why Taft signed the Payne-Aldrich bill, despite its many problems. He just wanted it done, so the government could continue making money. In many ways this reminds me of budgets debates today. When the budgets aren't passed on time, government services shut down. The final products are always less than perfect, but at least everything continues to operate.

[Lewis]

Somehow I've missed the link to week 8...can someone help me? Thanks.

[Vincent]

Kacy wrote: "My biggest take-away from this chapter was that tariffs were a mess, with so many different prices set and the concerns of different corporate interests at stake. I can understand why Taft signed t..."
Is this what we want or expect from politicians - that they do things just because they want them done.
Someone has to stand up and that is the President's - or your congressperson's job. Or your mayor's etc.
Maybe if politicians and public servants were reasonably conscientious you would not have had the West Fertilizer explosion and catastrophe in Texas.
Taft did not even make a deal that he wanted - he accepted what the "boys" sent him

[Kacy]

Of course that's not what we want to see from politicians, Vincent. It's not ideal, but it is often the reality.

[Vincent]

Kacy wrote: "Of course that's not what we want to see from politicians, Vincent. It's not ideal, but it is often the reality."

I agree - however it is generally "our reality" and many of them are far insulated from the daily place of the more common person. - not living near fertilizer plants etc.