Why Industrial Policy Is (Almost) Always a Bad Idea - Lukes Notes

Global Trade

• USA uses tariffs to affect global prices
• Trade deficits are paid by selling technology and real estate to foreign countries
• Trade Deficits are bad
• Tariffs can be used to raise money - decreasing US deficit spending - helps fix trade imbalances
• Moving jobs between states is not the same as shipping them abroad
• He talks a lot about xenophobia?

Yes, I value american workers more than foreign labor, this is a value judgement and kind of irrelevant to the podcasters argument, calling me xenophobic is a way of silencing disagreement

• GDP is not the be all end all of economic well being - the US has extremely high rates of suicide, fentanyl overdoses, alcoholism
• some of this stems from economic woes, some from existential dread, I think
• The podcasters don't give good solutions for people who lost their jobs to China - other than "just learn to code, bro"
  • People moving from manufacturing to tech at 55 is largely unrealisitic
• "Trade and innovation are the same" ...no?
• Trade deficits are paid by selling american tech and real estate to foreign adversaries
  • Also, this doesn't solve the issue of
    • "What dfo we do with people put out of work by innovation and trade"
    • Also international trade happens between countries, innovation happens within - foreign vs american

Conclusion:

• IMO, there are practical purposes to having an industrial base
• Trade deficits cause the sale of american assets, real estate, tech to service debt
• Supply chains are fragile
• Covid proved this having a manufacturing base could've helped mitigate disruption
  • Ability to manufacture guns and weaponry is key
  • We shipped so many missles to Ukraine we had to pull boomers from retirement to manufacture more, loss of human capital
  • Also ramping up manufacturing on short notice is harder than the podcasters let on - especially if we have poor human capital - lose human capital
  • Helps employ lesser human capital - some people will never learn to code - they simply don't have the intelligence or capability in many cases - these people still need jobs, the Neolibs have no solution to this problem - except maybe UBI
• A side note tariffs can also be used for negotiating trump threatened tariffs which Mexico to negotiate the "Remain in Mexico" policy

References

Free Trade Doesn't Work: What Should Replace It and Why, 2011 Edition

Flashcards