Michael Wolraich's picture

    Tariffs: the Time Bomb That Could Shatter the GOP

    “Tariffs are the greatest!” President Trump crowed on Twitter on Tuesday morning. If that represents a break from contemporary Republican orthodoxy, it’s a message other GOP presidents once embraced. Trump has previously quoted William McKinley declaring that tariffs made Americans lives “sweeter and brighter and brighter and brighter.” (For the record, McKinley only said “brighter” once.) And after Congress passed the Tariff Act of 1909, William Taft declared it “the best bill that the Republican party ever passed.”

    But the voters disagreed, vehemently. In the next two elections, they obliterated the GOP’s congressional majority, crushed Taft’s reelection hopes, and sent the party into a tailspin. Tariff policy was one of the most divisive issues in American politics, because its costs and benefits were unevenly distributed. Protectionist policies offered windfalls to large corporations while burdening small businesses and farmers with higher prices. That stirred bitter resentments in less industrialized, agricultural regions, fueling North-South discord before the Civil War, and inflaming Midwestern populism in the early 20th century, splitting political parties in the process. If Trump continues his protectionist his course, it could happen again.

    Read the full story at the Atlantic

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    Comments

    I've been suffering from writers block for some time, so it's nice to finally publish something, and the Atlantic has long been a goal of mine.


    Congratulations, Michael.  Well deserved!

    (Does it make me selfish to say I'm proud to be a part of the community that you created?  Or to remind you again, as I once did, that maybe you should let your freaky wide-collared once-flashing wild side fly once in awhile when a serious side writers block hits?) ;-)

    In all sincerity, your piece is not only as well written as I would expect, but also informative enough to make the point without being too bogged down with historic facts to lose the reader ... not easily done.  If I had read your piece as someone less "personally" involved, I would likely have posted it "In The News" with any number of possible quotes meant to stimulate conversation.  It's absolutely that good.


    Thanks, barefoot. I do remember your advice and have tried channel the collar but without success. Genghis was a troll baiter at his core, and there just aren't enough trolls around here to inspire me. Which is a good thing in every other respect.


    It's always bittersweet when they grow up ... but never you mind, young man.  There are always trolls to be found under any number of bridges, should you find the need to bait one now and then.  The collar abides!  laugh


    Totally as an aside, I happened upon this piece today about writers and writing ... which made me think of you, me and everybody else who writes whether for a living or a blog.  It's good.


    Thanks Mike...

    Your historical knowledge astounds me.

    Oh and it's good to see you at the Atlantic.

    Say Hi to...

    ~OGD~


    Thanks, OGD!

    PS Who is that?


    Here Wolraich... at Twitter...

    Natasha Bertrand

    @NatashaBertrand

    Staff writer covering national security & politics. / contributor. [email protected] [email protected]

    Washington, DC

    Your article was also linked at RealClearPolitics this morning which gives it a bit larger reach.


    Nicely done concise history of the century plus history of US tariffs.

    Congratulations! 

    Republicans doomed! Done, clock is ticking!


    Thanks, NCD. We'll see how this goes. Trump has already surrendered to the EU; he may not be able to stomach the backlash.


    Conservatives were protectionists in the old days; in more recent times they've been free traders. Trump has bucked that trend, which caused a revolt among some Republicans in Congress. Now the left opposes free trade. Can you tell us more about what caused the reversal?


    Hello Anonymous. After the end of the Cold War, free trade became associated with globalism, which is loathed at both ends of the spectrum. It certainly didn't start with Donald or Bernie. Remember Ross Perot's "giant sucking sound?" And Pat Buchanan, who preceded Trump on pretty much everything, was running against free trade in early 90s. Lefties are also rebelling against the global order, only from the other side.


    Interesting trade facts:

    1. no LCD screens, from small to large,  phones to TVs, are made in the US. Zero.  Foxconn plans plant for small screens in Wisconsin. 

     2: LCD (liquid crystal) displays (standard today) are complex very low in energy use, the LCDs act as minute polarizing shutters (magnetically triggered) on per pixel level for the highly efficient LED (light emitting diode) backlights. Compared to 'old' CRT displays, LCD displays save approximately as much energy as produced today by all solar panels worldwide.


    Well back when I was researching gloabalization I discovered all of America's tube TV manufacturing was sent to Mexico and then shuttered - but the Japanese LCD Tv manufacturers soon gave up and shut down all domesstic oroduction, moving everything to China, with most going out of business. Flashy as it sounds, TVs are commodity business.


    I saw Maiello re-tweet it this morning, was wondering when you were going to post it here or was I expected to do it? cheeky

    Nice job of journalist style history, just up their alley. I would say congrats but then I thought: he belongs there! Founded 1857, no small feat to still be publishing! As a history fan, I think it more prestigious than, say, The New Yorker.


    I find that I read Atlantic articles more than any other source. The articles are smarter than the Daily Beast but less pretentious than the New Yorker and less stiff than the NYT or WaPo. And yeah, it's been around a long time. I wonder how they're doing, since they don't have a paywall.


    The Atlantic is one of the best sources of news analysis. It would be a great loss if it failed. I really wish I could pay for it but I'm already paying for WaPo and TPM and can't afford another.


    Yeah, I'm super frustrated with the old-school subscription mentality of print media. People just don't read newspapers and magazines cover-to-cover anymore. They get their news scattershot from social media and aggregators--like our own news feed. It's unaffordable to pay a hefty subscription to every media source that you read. They really need a pay-per-article model or cable-like bundle option that gives you access to multiple content providers.


    A sharing economy start-up for x number of articles a month across 15+ magazines? One sign in at "Lectio.com", you choose the magazines you signed up for, that you want to read, and an Uber like option to charge your credit card a little extra fee for 1, 3 or 5+ extra beyond base # reads in a given  month? Or fund it with video ads like YouTube.

    Lectio.com...the domain is for sale..who could write up the patents?


    Another option is Texture. Costs $9.99 per month and gives access to 200+ mags including the Atlantic 

    https://www.texture.com/


    That's interesting


    Figured there was one already. Although Texture seems to make you oay their fee, and then you have to pay subscription fees for each magazine, which you can then access through the app.


    With Texture you get the entire content of the magazine plus some back issues. There is another aggregator ZInio that requires subscribing to each magazine. Texture may still offer a free trial. Texture is a blessing.


    Magzter Gold is another app that gives full access to 2000+ magazines. They appear to be running a sale that is half the monthly price of Texture

     


    Interesting, thanks for the info, never heard of them.


    It's not technically difficult to implement, and aggregation apps like Flipbook would be well-positioned to execute, so I assume that there's some other barrier preventing this from happening. Most likely, the big print media corporations aren't willing to risk cannibalizing their subscription revenue.


    I recall from several years ago [so it might have changed if even correct then] an article on this subject that said the minimum cost of a credit card transaction is approximately 35 cents.   


    You can avoid charging a credit card for every transaction by bundling them together.


    Well a noted national correspondent is leaving so I would imagine they will have a little extra on the balance sheet right now, hopefully use it for free-lancers like you, even if temporarily.


    Wow, I had missed this


    Wait, are you saying the "Tariff of Abominations" was partially a cause for the Civil War? You're in deep doo-doo now.
    Also funny that the left's pro-tariff/anti-free trade stance going into 2016 was rather ahistorical to the populist fervor at the previous fin de siecle - oddly a place Trumpians & Bern could work together.


    No comment. ;)

    OK, I'll comment. Tariffs certainly contributed to North-South tensions, but the states would never have gone to war over the issue. Tariffs were kindling; slavery was the fire.

    And yeah, I disagree with folks on the left about trade barriers. Not because I believe free trade dogma but because I fear the unintended consequences of tariffs. Just like the old crop subsidies that were supposed to save family farms but ultimately lined the pockets of Big Ag, lobbyists are adept at turning well-intentioned policies into corporate rackets. I had previously thought about writing a watch-out-what-you-wish-for piece directed at the left, but Trump has pretty much commandeered the issue.


    Covered your ass well ;-)  No, seriously, the former's rather indisputable (a few kindling issues combined with the elephant in the room). And while free trade's largely helped halve world poverty (and many of the complaints ignore what suddenly letting China, India & ex-Soviet workers on the market), there are structural problems with draconian businesses & lack of protection/security for the individual we're seeing now that the worker surge has largely been assimilated. That *can* be dealt with through some kind of non-dogmatic socialism working in hand with our messy new capitalism, but can we make that jump?


    "non-dogmatic socialism working in hand with our messy new capitalism"

    Sounds Bernie-ish to me ;)


    That smiley packs a lot of data


    Wolraich... a resource...

    If you haven' already got this in your research sources, I highly recommend this.

    https://elections.lib.tufts.edu/catalog

    A New Nation Votes is a searchable collection of election returns from the earliest years of American democracy. The data were compiled by Philip Lampi. The American Antiquarian Society and Tufts University Digital Collections and Archives have mounted it online for you with funding from the National Endowment for the Humanities.

    It's a veritable treasure trove of some very fine detailed  info of factions and parties, examples:

    The Quids (1804)

    In Pennsylvania, the Quids, known first as "Constitutionalists", arose out of a split among the Republicans in local Philadelphia politics.

    The various Republican splinter movements in New York [Burrites, Lewisites and Clintonians] although most had underlying economic and reform issues, they often instead rallied around a central personality. As did most Republican splinter movements in Pennsylvania with exception of the Constitutional Republicans, a movement formed to prevent proposed judicial changes to the Pennsylvania Constitution. In addition to these, there were within Congress a group of individuals who were often classified as Quids. Among this group were congressmen from Virginia, Maryland, Kentucky, New Jersey and North Carolina. Mainly elected in 1804 and 1806 as Republicans, they began to question some actions and direction of their party. When reaction to the Embargo revitalized the Federalist; New York and Pennsylvania dissident Republican movements moved back into the main party. On the Congressional level, a few remained in opposition, some declined to run for re-election, and others were not re-nominated. more-->

     

    Bucktail (1818)

    Also referred to as the Anti-Clintonians, the Bucktails, lead by Martin Van Buren, became a potent political force in New York arising in the Hudson River Valley in the late 1810's and early 1820's. The Bucktails would coalesce around the candidacy of William Crawford as a presidential candidate in 1824.

    "The Clinton-[New York Chief Justice]-Spencer alliance held together, but over the next three years the tenuous peace within the New York Republican Party dissolved. Two elements fully emerged, each hoping to dominate the politics of New York in the name of true republicanism. Martin Van Buren stood out as the leader of a "Bucktail" opposition that increasingly emphasized the virtue of party regularity, while the Clintonians increasingly emphasized the iniquity of party as a potential vessel of conspiracy and oppression that would enhance the power of government at the expense of social harmony. (fn: Richard Hofstadter, (fn: Richard Hofstadter, The Idea of a Party System: The Rise of Legitimate Opposition in the United States, 1780-1850, Berkeley and Los Angeles: University of California Press, 1969, 219-23). more--

    ~OGD~

     


    Cool! Thanks


    Bravo, Michael! Congratulations! It's a marvelous piece, and richly deserves its place in the Atlantic, a great career milestone.

    We're all proud of you on the block.


    Thanks, Doc!


    The act of picking winners and losers is a bone of contention that runs through economies foretold by left, right, and center. 

    The debates between Hayek and Galbraith that took place back in the day may still have some utility. Is there such a thing as an unplanned economy?


    "The debates between Hayek and Galbraith that took place back in the day may still have some utility."

    To who? Trump?


    No. To us. The public.

    Do market processes free us from having to say what will happen?
    Does saying what will happen make the world so?

    That sort of thing.


    We have a immoral quisling of a Party in power, and lying con man, demagogue and coward as President.  It won't end well.

    Don't need Hayek for that. 


    Perhaps we do because we have what you say.  Moat is thinking beyond the obvious of the small ... we might all do well to do the same.


    Thanks for this comment, Moat. While picking "winners and losers" is inherently prone to political manipulation, tariff policy is more corruption-prone than other examples of government intervention in a market economy. When a politician's choice can change a company's bottom line by millions of dollars, that company is heavily incentivized to do whatever it can to influence that politicians choice.


    Your article does an excellent job of putting the burden of proof on those who would argue tariffs can be used without introducing corruption and favoritism.
    I got thinking about the "macro" forms of market manipulation in the discussion upthread where you spoke of globalism being opposed by some people on the right and the left sides. Presumably a Sanders' presidency attempt at protecting specific  markets would run into the same difficulties the present administration is floundering in. I am wondering if there are any ways to mitigate some of the downsides of global markets that would distinguish a "left" wing method from the "right." 
    One thing the Democrats have going for them is that whatever disagreements they have regarding trade, they don't have a long history of claiming "unfettered markets" preserve a social benefit by their very existence. Maybe we could develop some common ground on the issues without our heads exploding from the contradictions.


    That's a very good question. Back in the progressive era, liberal reformers didn't advocate eliminating protective tariffs, they just wanted to reduce them to a more reasonable level and remove the influence of special interests. For example, they proposed to create an independent tariff commission that would set rates "scientifically" to protect only those industries that needed protection. And in fact, the New Deal's biggest tariff change was not eliminating import duties--it was moving tariff authority from Congress to the Executive Office in order to shield tariff policy from influence prone senators and reps.

    In theory, an uncorrupted White House could administer protective tariffs fairly, but Trump's White House obviously can't be trusted, and even with a more principled Administration, I'm concerned that the gravitational pull of tariffs could still have a corrupting effect. Like farm and ethanol subsidies that were established with good intentions, big corporations tend to take control of such institutions and pervert them to their own ends.


    Well well well...

    I wander back into the Dagblog saloon and I see it's gotten all posh around here, knocking off op-eds in the Atlantic and whatnot. Dagbloggers sitting around drinking Pimms and sucking pensively on pipes while adjusting their reading monocles, I'm guessing. 

    More seriously, great piece Michael, and well-deserved! I love these historical context pieces that shed light on current events. More light less heat (or hot air). I hope it's the first in a series. ;0)

    Just to throw in my two centimes, I don't think Trump will lose the tariff war(s). I think he will get the EU and China to give up some concessions that he can wave around at rallies. And that will be pretty much the end of it. 

    On the downside, the US has lost a vast amount of soft power by being so belligerent about getting concessions. He wants a reduced trade deficit, but mostly he wants to humiliate his counterparts. Nevertheless, as you could see with Obama, that soft power can bounce back quite fast with a new president. In the meantime, I think it is a great way for Trump to concentrate a vast amount of power in his own hands and keep corporate interests pliant and cooperative: he can hurt whoever he pleases under the guise of trade war. Tariffs are a great tool of corruption as you so clearly explain, but they are also a great tool of coercion when directed at particular industries. 


    Obey!  Great to see you wandering back in!  


    Good to see you Dreamer!


    yeah! Consider taking a few minutes here and there to favor us with a comment now and then in your internet travels, always enjoyed your participation here.


    I know I should! My addictive personality means that it's really an all or nothing affair sadly. Had to stop internetting cold-turkey for a while to concentrate on work life. Life-goals achieved for now, so indulging my blog-heroin habit for a short window... ;0) 

    Glad to see the shop still in good shape


    Ah, Obey's looking for an angry fix in the negro streets at dawn. Sure, we can hook you up - but it'll cost you.


    Most of the world will be so fucking glad when Trump goes down the shithole they'll be likely to forgive this period of American insanity. The bigger question at that point is what the fuck are Saudi, UAE and Israel up to (with Russia, of course), and how will they fuck things up in response. China's manipulative, but more straightforward.


    Hey Peracles! what's shaking? Is Israel really up to something nefarious these days? Apart from the usual Netanyahuery that is. Just willing to do whatever is necessary to keep Iran at arm's length, no? 


    Nope, you haven't been paying attention here - Israel's caught up in some scheming with Saudis and their UAE underlings, major trillion dollar nuclear power deal or something (Saudis know they dont have the internal talent and efficiency to carry it out alone).. Yeah, it's Bibifuckery, but what isn't - he drives Israel like Trump drives America, except he's been doing it longer so the resistance is completely castrated. But ohter than that, how's you?


    mmm. Just what I've been looking for. A periclean deep dive into middle-eastern shadow political theatre. So are you saying I have to go into the dagblog's backroom myself and rummage around for this piece? My need for a read is bad but still...

    Apart from that, taking a breather before moving to Brussels in September to work on research and innovation policy, or as it is more commonly known stateside: witchcraft. They say it rains there. But there is beer and fries. So I think it will work out.


    Oh, i'll google something for you. Be careful - no sprouts in Brussels despite its reputation.

    Here's a start, even though a bit dated.

    https://www.thenational.ae/business/energy/saudi-arabia-said-to-plan-nuc...


    Thanks!


    The non-Russian collusion (Saudi/UAE/Israel/Trump)

    https://www.nytimes.com/2018/05/19/us/politics/trump-jr-saudi-uae-nader-...


    Thank you, Obey. It's great to see you back at dag. Sorry for the delayed response.

    You may be right about this round. Trump has already won some concessions from the EU, and China may still cut a deal. That said, he has already damaged the agriculture markets and antagonized the Midwest. I predict that we'll see ripple effects in the midterms no matter what happens.

    More to the point, conservatives' shift on tariffs didn't start with Trump, and it's not likely to end with his presidency. Pat Buchanan was railing against global trade back in 1990s, and Trump campaigned against trade deals in the 2016 primaries because he recognized that it was already a issue among the Republican base. If he is successful in subduing China, conservatives' infatuation with tariffs will grow even more intense, and his successors will attempt to repeat what Trump did. In short, this game won't end quickly, and it won't end well for the GOP.

    PS You mistake dag's style of intellectual pretension. Forget the Pimms. We're slurping cheap beer at a grimy bar while scribbling poetry in the margins of a dog-eared Bukowski novel.


    Hey!  Did ya read that?

    Yeah, I read it.  What's your point?

    Ask the bartender.


    thanks for pointing to MW's new comment, miss comments sometimes on older blog entries


    well Michael, I see you have an adversary at the top, the delusionary tactic so well-p​egged by Dana Millbank​ @ WaPo with the headline Trump, down three touchdowns at halftime, declares victory

    “Tariffs are working big time,” Trump announced this week

    “Congratulations to Troy Balderson on a great win in Ohio,” Trump proclaimed, even though the number of uncounted provisional and absentee ballots meant the race could not be called. 

    Meanwhile I see the Columbus Dispatch reported July 22 that Ohio lands at No. 7 of states hardest hit by tariffs


    Trump is America's Baghdad Bob. He'll be declaring a glorious victory as the Republican Palace collapses behind him.


    I believe she's already among the GOP shards, but I nonetheless thought of your essay when I saw it:

    Possibly Trump’s stupidest tweet ever

    Op-ed by Jennifer Rubin @ WashingtonPost.com, August 16

    President Trump has issued shameful tweets, offensive tweets and self-serving tweets. Rarely, however, has he sent out a tweet that better conveys his abject ignorance about the country and economics than the tweet he posted Wednesday:

    Donald J. Trump@realDonaldTrump

    Our Country was built on Tariffs, and Tariffs are now leading us to great new Trade Deals - as opposed to the horrible and unfair Trade Deals that I inherited as your President. Other Countries should not be allowed to come in and steal the wealth of our great U.S.A. No longer!

    11:04 AM - Aug 15, 2018

    No, no, no [....]

    Unless Trump wants to retreat to a 1776-sized economy or relive the Great Depression (care of Smoot-Hawley) it’s best we not follow the outdated mercantilist philosophy that was supplanted fortunately by Adam Smith who deplored tariffs [....]


    Yeah, I saw that tweet. Such a set-up for my piece. But you can't publish the same piece twice. Unless you're a NYT columnist, in which case you get to write the same thing over and over and over again.


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