What if Tariffs Are a Good Thing? I was surprised to find that this podcast made me wonder whether tariffs would actually be really good for the US economy and, more importantly, for midd-class American people.
With all the raging about how awful Trump is, it's been very hard to find any thoughtful analysis about which parts of his policies might actually be beneficial for Americans.
In this podcast, Ross Douthat (NYT) interviews Oren Cass, the Founder and Chief Economist at American Compass, a conservative think tank. Oren makes a really good case for the following:
- we've been living through a period of mostly-unchecked globalization
- because GDP has been rising, economists generally argue that globalization is good
- HOWEVER, Oren provides compelling reasons why GDP growth is not a sufficient indicator of the health of the economy. He cites things like increasing income inequality and the overall reduction in purchasing power when you factor things like households now having to have two full-time incomes to buy the same basket of things
The opportunity that tariffs provide is to buffer globalization and proactively re-shape the American economy to be more self-reliant, more inclusive and more balanced (geographically, industry-wise, etc). For example, Oren notes that globalization has been driving wealth toward tech & financial hubs, like NYC, Austin, San Francisco, while middle America has been largely stagnant. With more manufacturing, job distribution could be more equitably spread across the country.
What I liked most about this podcast were a few things:
- it provides a thoughtful challenge to the mainstream chatter that "tariffs are bad!" and "Trump is ruining our economy!"
- the basis for tariffs is actually to improve the well-being of middle Americans who are not participating in the white collar tech and financial services boom
- that it challenges the assumptions that an unfettered globalized world economy is what works best. Maybe it isn't?