Friday , December 14 2018
Home / Cafe Hayek / Yet Another in My Long Series of Open Letters to Wilbur Ross

Yet Another in My Long Series of Open Letters to Wilbur Ross

Summary:
Mr. Wilbur RossSecretary of CommerceWashington, DC Mr. Ross: Yesterday on CNBC you repeated your absurd claim that the harm that Americans suffer from tariffs is irrelevant. “Because it’s spread over thousands and thousands of products,” you assert, “nobody’s going to actually notice it at the end of the day.” Forget that many of the resulting price hikes are indeed significant, such as the 16 percent rise in the price of washing machines. Instead, recognize that spreading costs so thinly so that they are not ‘noticed’ does absolutely nothing to justify them. Because economics is clear that the benefits of tariffs nearly always fall short of the costs of tariffs, these costs are no more justified because they are not ‘noticed’ than they would be if they were acutely and fully felt. By

Topics:
Don Boudreaux considers the following as important: , ,

This could be interesting, too:

Don Boudreaux writes Slaying More Trade-with-China Myths

Don Boudreaux writes Some Links

Don Boudreaux writes Devastating Review of Nancy MacLean’s Fictional Work “Democracy in Chains”

Don Boudreaux writes Getting Real about Protectionism

Mr. Wilbur Ross
Secretary of Commerce
Washington, DC

Mr. Ross:

Yesterday on CNBC you repeated your absurd claim that the harm that Americans suffer from tariffs is irrelevant. “Because it’s spread over thousands and thousands of products,” you assert, “nobody’s going to actually notice it at the end of the day.”

Forget that many of the resulting price hikes are indeed significant, such as the 16 percent rise in the price of washing machines. Instead, recognize that spreading costs so thinly so that they are not ‘noticed’ does absolutely nothing to justify them. Because economics is clear that the benefits of tariffs nearly always fall short of the costs of tariffs, these costs are no more justified because they are not ‘noticed’ than they would be if they were acutely and fully felt.

By your (il)logic, a person who is daily fed portions of poison so tiny that he never notices the damage inflicted daily on his body is not harmed, despite the fact that the process of poisoning this person will eventually cripple and perhaps even kill him. By your (il)logic, a head tax of $1 annually on each American that generates proceeds to be deposited into my personal bank account is also ethically and economically acceptable because, being spread over hundreds of millions of Americans, “nobody’s going to actually notice it at the end of the day” while I will most certainly notice my swelling bank account.

Indeed, the fact that the costs of tariffs typically go unnoticed is a bug rather than a feature of tariffs. As economists have long lamented, precisely because the costs of tariffs, being spread thinly, are more difficult to notice than are tariffs’ benefits, which are concentrated, there exists a political bias toward imposing tariffs despite the fact that their total costs exceed their total benefits.

I congratulate you on becoming a poster-boy for the validity of economists’ identification of the biases on which the plunder of protectionism rests.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Comments

Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

Leave a Reply

Your email address will not be published. Required fields are marked *