Get ready for higher gas prices. . . ..

[cardcrimson]

Tariffs are going to do something, but a major fire at a major refinery in Martinez will do a lot more. Been burning for at least three hours so far, and doesn’t look like it’s close to being put out. . . . .

[rogpodge]

Generally balanced discussion of tariffs from an economist.

[Mick1]

The Atlantic‘s take on tariffs. It’s a left of center magazine, and it absolutely acknowledges the doctrinaire down side of tariffs…but…

Economists Aren’t Telling the Whole Truth About Tariffs – The Atlantic

…there’s good to be had with tariffs. A few of the pro-tariff arguments that are rarely voiced:

1. Domestic manufacturing needs protection because it drives innovation. When manufacturing goes offshore, supply chains and engineering know-how follow.
2. Manufacturing anchors local economies in ways that personal services do not.
3. A tariff is basically the same structurally as a carbon off-set. One can’t be a bad idea with the other being brilliant.
4. Uncharacteristically, economists tend to focus on the short-term consequences of tariffs. Typically they focus on the long-term; e.g., free trade is good because while companies may close in the short term, the long run efficiency gains will offset the losses. For tariffs, they only think short-term. For example, a tariff is a tax on American manufacturers and they emphasize the drag on growth but ignore that higher import prices would encourage investment in manufacturing. When UCLA researchers studied tariffs imposed on Chinese companies, they estimated that higher important prices cost the U. S. Economy $51 billion, but when factoring in the full economy’s response, it was indistinguishable from zero. There was a redistribution from buyers of foreign goods to U. S. producers.
5. The Atlantic found that if you extended the Chinese tariffs through to the end of 2019, the higher prices completely vanished. Samsung and LG brought U. S. factories online, much in the same way that the Japanese now build in America.
6. Final point…oh yeah…where does the money go? The weird assumption by economic models is that tariff revenue disappears (see The Tax Foundation’s model) but it moves to the U. S. Treasury. Thomas Jefferson essentially funded the government through tariffs in the early days.

Audaces fortuna iuvat

[Hurlburt88]

I am really conflicted on this.  Tariffs really help my company . . . and thus my pocketbook.   Yet I continue to believe that tariffs also delay investments in productivity generally, which is not good for US competitiveness in the long term.  I’ll be watching throughout this week while I contemplate all this!

[cardcrimson]

Fire still smoldering. Six minor injuries, no loss of life, fortunately. One of my daughter’s best friend’s dad is a senior engineer there. Going to be tough around here without that refinery online. . . .

[Author]

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