Tag Archives: trump

Amazon will not be part of the “Resistance”

I wanted to write this half a year ago, but with Trump’s tariffs back in the news, I figured I’d give it another go.

When Trump first enacted his so-called “Liberation Day” tariffs, many experts (mostly partisan experts though) predicted the apocalypse. It was bad enough that many news sources started educated their readers on the Smoot-Hawley tariffs, which anyone who watched Ferris Bueler’s Day Off will know were the tariffs enacted during the Great Depression. These tariffs have been blamed for contributing to the depth and intensity of the Great Depression, and naturally partisans wanted voters to make that connection to Trump’s Tariffs.

I myself also started watching out. I live in a major city with a major train hub, and as I commute past it I like to look out and check how many boxcars are being loaded and unloaded by trains. Earlier this year it seemed the tariffs might have actually been apocalyptic, the train yard was empty on some days. But despite partisans stoking fears of COVID-level shortages, tariffs have seemed to have a marginal effect on the US economy. Growth has remained strong in 2025, with the US well ahead of pretty much every advanced economy on earth in terms of growth rate. The EU may be a massive free trade area, and the USA may have become an increasingly protectionist autarky throughout the Trump-Biden years, but that hasn’t been enough to make the EU more competitive or the US less.

It’s likely because the tariffs are indeed marginal. Tariffs are a tax on imports, but like any other tax they can be avoided and mitigated by changing behaviors. Companies have shifted to sourcing their products from areas with lower tariffs, changing their production line to build more things in America, or in some cases are simply accepting lower profits and not passing the cost of the tariffs onto consumers because they need to maintain market share. In other cases the tariffs *are* leading to a rise in prices, but consumers still have the chance to substitute tariffed goods for other goods or just stop buying alltogether.

The tariffs have likely contributed to inflation remaining well-above target, and have likely made certain consumers much poorer without realizing it (as they purchase tariffed products and can’t find substitutes), but the tariffs have not had nearly the destructive effects that I and many others believed they would.

But the biggest problem for Trump’s detractors is highlighting the adverse effects of Trump’s tariffs. Remember that the American people seem to broadly like tariffs: Biden expanded Trump’s tariffs, Bernie surged in the Democratic Party by denouncing Clinton’s pro-corporate policies (which were usually also pro-trade policies) and Trump has completely remade the GOP into a protectionist party. America’s two parties are dominated by protectionists, and many free-trade Democrats have been furious that 2028 hopefuls have mostly denounced Trump’s tariffs as being “too high, too broad,” rather than hitting out that “tariffs are just plain bad and shouldn’t be used.”

It seems that Americans really do like tariffs, so trying to attack Trump for his tariff policy doesn’t hit as well as it “should.” This is a big problem for free-trade Democrats because to them it’s patently obvious that Trump’s tariffs have led to higher inflation and lower growth, but Americans aren’t necessarily buying it.

Enter Amazon. As the foremost distributor of direct-to-consumer goods, Amazon is acutely sensitive to trade policy. Any raise in tariffs will cause a raise in prices for imported goods, causing consumers to purchase less and that hurts Amazon’s bottom line. Amazon has every reason to lobby as strongly as possible *against* tariffs, and as a consumer-facing company that everyone knows, free-trade Democrats thought they’d found their edge.

The idea went like this: what if Amazon *shows consumers* how much higher their prices are because of tariffs? What if every time a consumer buys a 100$ imported product, Amazon shows its base cost but then hits them with a “+15$ because of tariffs” fee at the checkout? Consumers would be furious at these hidden costs, but their fury would be directed at Trump and his tariffs. The tariffs would become unpopular, Trump would become unpopular, the free-trade Democrats and Amazon would be the big winners in 2026 and 2028 when (hopefully) less protectionist Democrats would be swept into power on a wave of consumer backlash.

It all seemed so perfect, leaked reports even claimed that Amazon was openly considering this idea.

But then Amazon made an official statement that they would not under any condition display tariff prices. Their statement said that while such a move was considered, it was never approved, which isn’t unusual as companies are constantly considering many thousands of moves that are never approved. Furthermore Amazon spokesmen pointed out that the company had never shown consumers the cost of tariffs during the Biden administration, even though Biden had hiked tariffs to their highest point since Jimmy Carter.

Amazon felt the move would damage its own brand, worsen its political position, and bring basically no benefit. If Amazon was an arm of the Democratic party, then maybe it would make sense. But as a profit-maximizing entity, pissing off your customers with hidden fees *and* wading into the political arena with a nakedly partisan endorsement of the opposition (by blaming the current administration for high prices) just doesn’t make sense.

So Amazon will *not* be part of the Anti-Trump Resistance. As Michael Jordan once said, Republicans buy sneakers too, and most profit-maximizing companies find it best to *not* piss off half the country by taking overtly partisan stances. They may try to take political stances, but they will always present themselves as non-partisan to consumers, because they don’t want to lose business from angry voters. And directly blaming Trump’s Tariffs for high Amazon prices, after 4 years of never doing such for Biden’s Tariffs would indeed be an overtly partisan act, because it’s an attempt to blame Republicans for high prices and push consumers towards supporting the Democrats.

This then made Amazon a target of April’s 2-minute-hate in the eyes of free-trade democrats. These Democrats don’t see “showing the cost of tariffs” as partisan at all (because people always believe their own beliefs are just “the obvious truth,” and not a partisan stance). Rather, when Amazon *refused* to show the cost of tariffs, it was blamed for kowtowing to a “fascist” government, comparisons to 1930s German companies were ever-present, and Bezos himself was derided as a coward and a collaborator, rather than the profit-maximizing businessman that he is.

The simple fact is that obviously no multinational company is going to want to lose half its customers, so no multinational company is going to make their storefront an advertisement for the Democrats and against the Republicans. I’m sure Amazon is lobbying the administration on reducing tariffs, it was widely reported that tech giants did this exact same lobbying last time Trump was in power. But just because Amazon doesn’t like tariffs doesn’t mean they want to torch their credibility with Republican consumers. Because Republican consumers might angrily ask why Amazon is sourcing products from overseas (and showing people a tariff) rather than sourcing *American* products like Trump (and Joe Biden, and Bernie Sanders) would prefer they be doing.

Anyway I’ve found a dozen ways to restate this one point: Amazon is not going to become part of the Resistance, it will not show consumers what the price of Trump’s tariffs are in part because that would be a partisan move that would invite blowback and boycotts from Republicans: “why isn’t Amazon buying American instead, and why didn’t Amazon do this stunt during the Biden administration?”

But I wanted to note one additional reason Amazon won’t be showing consumers the price of tariffs, and it’s isn’t because of what Amazon wants, it’s because of what their suppliers want.

The relationship between Amazon and its legion of medium-sized suppliers is a tricky one. On the one hand some random clothing store like Shoes&Shirts LLC (fake name) probably likes that Amazon gives them a massive amount of customers to sell to. Amazon’s global consumer base makes it easier to scale up by just having a single contract with Amazon, rather than having to negotiate multiple deals with brick-and-mortar stores in every single country.

On the other hand, Amazon’s dominance of the market gives them a lot of power over their suppliers, they can negotiate a large cut of the proceeds, demand suppliers abide by Amazons rules and regulations, and overall an agreement with Amazon can be like a pair of golden handcuffs. If you’ve seen how indie developers complain about Steam, you’ll understand how small and medium suppliers complain about Amazon.

The situation can be even worse, since Amazon competes directly with its own suppliers. Say Shirts&Shoes LLC has a new style of Comfy Sweater that is flying off the digital shelves. Amazon can see this, and see that another company makes a nearly identical sweater for a fraction of the cost. Amazon can then source their own Comfy Sweater from this other company and try to undercut Shirts&Shoes LLC on price, fulfilling the orders themselves and taking Shirts&Shoes’s business out from under them.

Amazon suppliers are therefore very very cautious with what information they give to Amazon. They do *not* want to tell Amazon the price it costs them to make something, they only want to reveal the price they’re selling it for. Giving away the price to make something makes it even easier for Amazon to undercut them.

If Shirts&Shoes’s sweater is selling for 100$, and you can source it for 60$, you still don’t know for sure if you can undercut them. Maybe Amazon lists their own sweater for 75$, but Shirts&Shoes responds by cutting the price down to 50$ because they can actually make it for even less than that. Amazon would be putting a lot of money into a failed attempt at capturing new market share, Shirts&Shoes would be furious at the attempted betrayal, AND both would now be making less money because the shirt is selling for less so both sides get less of a cut. The only winners would be the consumers.

So Amazon’s suppliers DO NOT want to give Amazon any information more than they need to. And that by the way includes the price of tariffs.

When Shirts&Shoes brings a shirt into America, customs charges them a tariff based on the declared value of the shirt. Shirts&Shoes then has to set the sale price at a level high enough to cover not only the cost of the shirt, but also the cost of the tariff. If the value of the shirt is 20$ and there’s a 100% tariff, then they can’t sell the shirt for less than 40$ without taking a lose.

But they may be selling the shirt for 100$ anyway and taking 60$ of profit. Now, the shirt’s price may have gone up because there used to be no tariff and now there’s a 100% tariff. So the free-trade Democrats would love if the shirt was listed on Amazon for a price of 80$, but had an extra 20$ “tariff tax” at the checkout that would be directly blamed on Donald Trump.

But Shirts&Shoes doesn’t want to reveal that the base cost of their shirt is 20$ with a 20$ tariff on top. Because at that point if Amazon can source the same shirt for 35$, then they can undercut Shirts&Shoes and steal their business, and both sides know it. Instead, Shirts&Shoes would like the costs going into the shirt to be as obfuscated as possible.

They’d probably like their customers to think that it costs them 90$ to make a shirt and they’re selling it for 100$, because that way they don’t seem to be making “too” much profit. If customers knew Shirts&Shoes had such a high mark-up, customers might think they were getting ripped off, and would make nasty posts on the internet to complain about Shirts&Shoes’s prices. This could harm Shirts&Shoes’s brand.

And they’d probably like Amazon to think that it costs them 5$ to make a shirt and they’re selling it for 100$. Because they don’t want Amazon to attempt to undercut them and either steal their business or initiate a price war which harms their profit margins.

So ambiguity is entirely in Shirts&Shoes’s interests, and so they don’t want to reveal any tariff information to Amazon. That in turn means that even if Amazon wanted to, it wouldn’t be able to reveal tariff information on any third party products, only on products it sources itself. That could backfire if Amazon even decided to reveal tariff prices, as *only Amazon’s own goods would show the tariff as a hidden cost*. Buy a good sourced by Shirts&Shoes? What You See Is What You Get. Buy a good sourced by Amazon? You have no idea WHAT the real price will be.

To summarize, Amazon (and other profit-seeking companies) will NOT be part of the resistance, as they do not want to damage their brand in the eyes of partisans. Likewise, it’s not even a simple thing for Amazon to JOIN the resistance and reveal to customers the true price of tariffs. They’d be pissing off their own customers by making customers feel like the price is a bait-and-switch, they’d be demanding information from their suppliers that the suppliers don’t want to reveal, and if the suppliers DON’T reveal that information, then only Amazon-sourced products would show a tariff anyway, meaning Amazon gets all of the blowback for “high prices” while their suppliers can claim “Same Low Prices As Ever,” even if prices everywhere are actually rising.

Partisans think everyone should join their fight, and that the only reason not to is base cowardice. They’re usually wrong.

How much of Canadian-bound immigrants wish to eventually immigrate to America?

This will be a post long on musing and short on evidence. But I have two anecdotes about Canadians, or at least Canadian-bound immigrants.

In grad school I met a Chinese woman who moved to Canada for her undergrad, but her express purpose was to eventually find her way into an American graduate school (which she did). She knew that not only would a Canadian undergraduate degree look good to an American Grad school, but she also knew that she could get her American visa while living as a student in Canada, and that it would be easier to do that than to get a visa while living in China. Most people don’t realize, but even if you’re accepted to a University, you aren’t guaranteed a student visa. The American state department can reject your visa if they think you’ll overstay, and the staff are very strict when issuing visas in China and India, but much more lax when issuing visas in Canada.

Now why didn’t she do her undergraduate degree in America? I don’t know, I never asked. Maybe it was too expensive, maybe she couldn’t get in. But she was open an honest that she though an American degree was better than a Canadian one, and much better than a Chinese one, and so getting an American degree was crucial for her career.

And a researcher I know at my current job has Canadian citizenship, but he and his family immigrated there with the intention of eventually reaching America. I don’t know how, but he said it’s a lot easier to get permanent residency and citizenship in Canada as opposed to America, and it’s a lot quicker. And once you’re a Canadian citizen, you have a much higher chance of getting a visa into America compared to an Indian citizen.

Like in China, the state department considers Indian citizens to be at a very high risk of overstaying their visas, and so are reluctant to give visas to them. But Canadian citizens are low risk. If you eventually want to move to America for work, moving to Canada and becoming a Canadian citizen can be a long-term strategy.

So how common is this overall? I have absolutely no idea, but I’d like to know. I know that recently both Canada and America had very high spikes of immigration. Canada under Trudeau defended its immigration policy on economic grounds as bringing in more workers to grow the economy, America under Biden instead used humanitarian grounds, as America being a beacon for the tired, poor, and huddled masses. But during this spike, there were still stories of people coming to Canada and then trying to use that to move to America.

So how true is this, and what are the implications? A troubling implication would be if Canada was seen as a “secondary” destination for many migrants, who would only go there if they thought or knew they wouldn’t be able to go to America. That would mean the international opinion of Canada’s economy is rather low, and also that it probably wasn’t receiving the best and brightest compared to America (because the best and brightest are more likely to be accepted into America).

This could also have ramifications to how Canada is affected by American policy. America is endorsing a highly restrictive immigration policy. Will this cause more immigrants to seek Canada, as they cannot reach America? Or will it cause *less* immigrants to seek Canada, as many of them *only went to Canada in order to reach America, which they now cannot do*?

Canada is also changing its policy at the same time, so teasing apart a single cause is difficult, maybe impossible. But it does make me think.

I was once talking to an econ guy at a conference, and he said that if every country on earth adopted open borders, most countries would see their immigration plummet as almost all immigrants they would have received would instead go to the United States. I don’t know if this is true, and he was an American of a certain political persuasion, so he may have had emotional reasons to believe this is true. But if anyone else out there has evidence of this, I’d love to see it.

Assuming your political opponents are just “misinformed” only guarantees that you won’t win them over

A bit more streamsofconsciousness than other posts, because I’m writing late at night. But here goes:

I don’t know much about the right-of-center political shibboleths, but it’s been a shibboleth on the left that people only vote conservative because they “don’t know any better.” They’re “misinformed,” they’re “voting against their own interests,” they’re “low-information voters,” these are the only reason anyone votes for the GOP. Nevermind that the “low-information voters” tag was first (accurately) applied to the *Obama* coalition before Trump upset the political balance of power.

Remember that in the 2012 matchup, Obama voters consumed less news than Romney voters, and were less informed on the issues at large. But in those days calling someone a low-information voter was nothing less than a racist dog-whistle (at least among the left-of-center). By 2016, Trump had upended American politics by appealing to many voters of the Obama coalition, and now this racist dog-whistle was an accurate statement of fact on the left.

“Yes some voters just don’t know any better. They don’t know the facts, they don’t know right from wrong, they just don’t know. And if they don’t know, the quickest solution is to teach them, because once we give them the knowledge that “we” (the right thinking people) have, they’ll vote just like we do.”

But attacking liberals (in 2012) and conservatives (in 2016 and 2024) as “low-information” is old hat, what about attacking leftists?

That’s what the Atlantic’s Jonathan Chait has done in a recent article. Now, he doesn’t directly state “leftists are misinformed” like he would say about conservatives. It’s obvious Chait still wants leftists in his coalition and doesn’t want to insult them too badly. But he’s laying out the well-worn left-of-center narrative that his political opponents do not understand things, and that he needs to teach them how the government actually works so they can agree with his positions and support his favorite policies.

In Chait’s view, leftists just don’t get that the government is too restrictive, and that these restrictions are the cause of the housing crisis. They don’t realize it’s too regulatory, and those regulations harm growth. And they don’t get that government red tape is the reason all our infrastructure is dying and nothing new can be built. Chait attacks California High Speed Rail and Biden’s Infrastructure bill as hallmarks of this red tape. California HSR is 10 times over budget and still not a single foot of track laid down, while Biden signed the Infrastructure bill in 2021 and wrongly believed that he could have photo-ops in front of new bridges, factories, and ports in time for 2024.

The fruits of Biden’s infrastructure bills are still almost entirely unbuilt, their money still mostly unspent. And this lets Republicans make calls to overturn those bills and zero-out Biden’s spending. If his projects were actually finished on-time and during his presidency, Biden’s enemies could never attack his legacy like that. But government red tape stood in the way.

See, with claims like these, Chait is arguing in favor of the Abundance Agenda. I’m not entirely opposed to it. See my many posts on de-regulation.

But Chait is once again missing the mark here. He claims that Leftists don’t *understand* abundance, and that’s half of why they oppose it. He claims the other half is that they’ve built their power base as being the people who “hold government accountable” and oppose its over-reach. But Chait is mostly arguing that Leftists don’t realize that their crusade against Big Government is a “bad thing” that has made our economy worse. And I don’t think Leftists are misinformed at all, I think they just have different priorities than me and Jonathan Chait.

Let me explain though a specific example: Josh Shapiro is well-loved for repairing an I-95 overpass in rapid time. He did so by suspending all the red tape that usually slows down such infrastructure projects. Chait then argues, if we know we need to suspend the rules to get things done quickly, then why do we need to have these rules in the first place? They’re slowing us down and preventing us from building what’s needed, so shouldn’t we just remove some of them?

But here’s the red tape that Shapiro suspended:

  • There was no bidding process for procurement, contractors were selected quickly based on the Govenor’s office’s recommendations
  • There were no impact studies for the building process
  • On-site managers were empowered to make decisions without consulting their superiors or headquarters
  • Pennsylvania waived detailed financial reporting processes
  • Pennsylvania waived most environmental reviews
  • Pennsylvania waived the requirement to notify locals of the construction, and to gain local approval for that construction

I don’t exactly have a problem with these ideas, and if Chait wants to make these de-regulations a central part of the Democratic brand, more power to him. But Chait is wrong that leftists are simply misinformed, I think many leftists would say that while these waivers are fine in an emergency, we should not support this deregulation for all projects, even if it saves us time and money. The reasons (for a leftist) are obvious.

  • Deregulating procurement is central to the Trump/DOGE agenda, and opponents say this opens the door to government graft as those in power can dole out contracts to their favorites.
  • Impact studies were also deregulated under Trump in two different executive orders. Biden revoked both orders at the start of his term because of his focus on health and the environment. I think most leftists would assert that protecting the environment and health is more important than other government priorities.
  • On-site vs HQ is less of an emotive topic, but the need for “oversight” is still a driving idea any time the government Does Stuff
  • Waiving of financial reporting opens up accusations of fraud
  • Waiving environmental reviews, see point 2
  • Waiving local notification and buy-in. You can probably get away with this when “re-“building, but will ANY democrat stick their neck out and say locals shouldn’t have a say in new highway construction? I doubt it. Highways change communities, and any change needs community buy-in (so they say). This focus on localism is very popular on the right, left and center, no matter how much I and the Abudance-crats may oppose it.

So Chait, do the leftists not understand Abundance? Or do they have strongly-held beliefs which are incompatible with Abundance?

This whole theory of “low-information voters” is always appealing to democracies biggest losers. It’s why the GOP liked it in 2012, and it’s why Democrats like it in 2024. The idea cocoons us in a comforting lie that we alone have Truth and Knowledge, and that if only everyone was As Smart As Me, everyone would Vote Like Me.

It also seems Obviously True on the face of it. “The best argument against Democracy is a conversation with the average voter,” so the saying goes. And when you see any of your opponent’s voters interviewed directly, you can’t help but notice how much information they are *lacking*. And it’s obviously true, most people don’t know how government works, they don’t understand permitting, they don’t get that environmental impact reviews cost so much money and time. So obviously if we gave them that knowledge, they’d start voting “correctly,” right?

This misses an important point about political coalitions and humans in general: the wisdom of the crowds. Most people don’t know most things, but we all (mostly) take our cues from those who do know.

Think about the leftist coalition in America, the Berniecrats, the AOC stans, the DSA and the WFP. Most of the voters in this coalition don’t have a clue how environmental review works. But there are some in the coalition (probably including Bernie and AOC) who do know how it works, and the rest of the coalition takes its cues from those people.

There are certainly some people who have looked long and hard at the Abundance Agenda, and they have concluded that (for instance) removing environmental reviews would lead to Americans being exposed to more pollution and harmful chemicals. It was only because of environmental reviews that the EPA took action against PFAS, for instance.

So Chait is arguing that we need to reduce regulatory burden and reduce the ability of locals and activists to halt projects with their red tape and environmental reviews. I agree with this.

But Chait then argues that the only reason leftists don’t agree with us is because they don’t understand how harmful red tape and reviews are, and thus leftists have lead a wrong-headed campaign of being the people who say “no” to new buildings. I disagree with this.

I think the evidence shows that leftists simply have different beliefs than me and Chait. Leftists believe that red tape and reviews are necessary to protect the environment. And a leftist might argue that Chait complaining about environmental reviews is like a conservative complaining that “cars would be cheaper if they weren’t forced to have seatbelts and useless safety stuff.” Chait says environmental review doesn’t help us. Well I’ve never needed my seltbelt either, because I’ve never crashed.

I’m sure you can see how stupid the seatbelt argument is, well that’s probably how stupid leftists would see Chait. Yes 99% of the time an environmental review finds nothing objectionable about a project, but what about those few times when they do? Do we scrap the whole system because it’s usually a waste of time? I say again: without environmental review, the EPA would not yet have taken action on PFAS. A leftist could seriously say to Chait: do you support allowing PFAS in the water? Because it might still be allowed without environmental review.

I don’t know what Chait’s response would be, I’m sure he’d try to say “well that’s different,” because any review that *found* something was clearly a good review. But you don’t know beforehand which reviews will find something dangerous and which won’t. To a leftist, that means you have to do them all.

Now, most leftists *do not understand environmental review* just like most liberals, moderates, conservatives, and reactionaries. Most people don’t understand most things. But the leftist coalition includes people who *do* understand it, and they’ve weighed the costs and benefits and come out with a different stance than Chait has. The rest of the coalition takes its cues from the understanders, just like the every other coalition does.

But Chait’s thesis is built on a lie that because most leftists don’t understand, they’ll side with him and Abundance once they *do* understand. I disagree strongly. Most leftists will continue taking their cues from the informed leftists, and Chait is not saying anything new to inform those informed leftists. The coalition will only modify its position on this issue once the majority loses faith in the understanders (and thus seeks new ones with new positions), or when enough of the current understanders retire and are replaced by new ones. Coalitions, like science, advance one funeral at a time.

But this idea that people are misinformed and just need a smart guy like *me* to set them straight, this is a central tenant of politics that I think needs to die. You shouldn’t assume your opponents are just misinformed, you need to understand that they *actually have different ideas than you do*, and try to win them over by finding common ground. Otherwise you’ll continue to be the Loser Coalition just like Rush Limbaugh and the Romney-ites of 2012.

Protectionism wears the skin of health and safety

Regulations wrapped in red tape

Trump is an unusual figure among the world’s politicians. It is not that he is a nativist and a protectionist, but that he is open and direct about his nativist and protectionist beliefs. Trump says that foreign companies are harming American companies by undercutting on price, and that foreigners are stealing American jobs by working in America.

There are many reasons to attack these beliefs and to tell Trump he’s wrong. Here are some reasons give on the left or the right, maybe you agree with one of them:

  • If foreign companies sell for cheaper, than that means blocking foreign goods raises prices. And raising prices (aka inflation) directly harms all American consumers way worse than foreign goods harm a single American company
  • “Oh your company can’t compete? Sounds like a skill issue. Your company deserves to go bankrupt, free market in action.”
  • Foreigners do jobs Americans don’t want to do
  • It’s unethical to prevent foreigners from moving to America to look for a better life
  • “Oh you can’t compete against foreign workers? Sounds like a skill issue. You deserve to go bankrupt, free market in action.”
  • Trade barriers will wreck the economy by driving up prices, and any claims of fairness are necessarily secondary to this single overriding truth: trade barriers are bad for the economy

Politicians in and out of America have made each of these arguments in turn as they argue against Trumps new tariffs. But the single-minded opposition to tariffs hides something deeper: almost every politician globally throws up trade barriers just like Trump, but they have different excuses.

  • “Those goods contain chemicals that harm our health”
  • “Those goods contain chemicals that harm our environment”
  • “For national security or data privacy, we cannot allow foreigners to hold our market or buy our data”
  • And the old reliable: “those goods and services don’t comply with our regulations.”

This last one is pernicious because of how vapid and all-encompassing it is. It only works because people have a knee-jerk reaction against deregulation, but as I have pointed out, there’s a lot of anti-consumer regulation out there raising our prices and harming our economies. Regulation doesn’t actually mean “good,” but enough people believe it does that politicians can hide all their protectionist bullshit behind an aegis of “regulations.”

I say all this because I’m bashing the EU again today. A former EU minister of parliament put out a post which demonstrates a lot of this BS EU protectionism. I had already known that the EU uses “regulation” to protect its market from foreign goods, what is commonly termed “protectionism.” What I did not know is how much EU countries use this to protect their national markets from the single market itself.

The whole idea of the single market is free trade and free movement. If a company is allowed to sell goods in one country, it should be allowed to sell goods in all of them. If a person is allowed to work in one country, they should be allowed to work in all of them. This reduces barriers, brings countries closer together, and is much more efficient economically than a world of barriers and tariffs. It should bring everyone prosperity.

But the countries of the single market still want to “protect” their national markets and their national workers, just like Trump does. But unlike Trump, EU countries are legally forbidden from erecting tariffs. So they use health, safety, and regulation instead to do their dirty work. Here’s some examples from the article:

  • Denmark claiming that adding vitamins and nutrients to breakfast cereal “could be toxic,” with absolutely no justification whatsoever. The cereals are consumed EU-wide, and one would think the burden of proof would be on the accuser in that case. But no, a baseless “could be toxic” claim is enough to ban a product in Denmark unless the company making it is willing to go through a long court battle against a national government.
  • Spain and Italy trying to force foreign chocolate (consumed in every EU state, legally chocolate by EU law) to be explicitly marketed as “not true chocolate” even though every law says its chocolate.
  • France forcing Dutch biodiesel to comply with expensive testing that is waived for French biodiesel.
  • Germany forcing foreign professionals to undergo expensive “equivalence checks” before allowing them to work in the country. This is just more BS occupational licensing by the way, a horse-groomer shouldn’t need a license to begin with let alone an “equivalence check” to make sure their Italian license is valid in Germany.
  • Adding new national regulation that must be complied with *on top* of any EU regulation. This is the most pernicious, because most EU regulations explicitly mention that they are there to “harmonize” the market, make goods acceptable in every country. But EU regulations in the past decade have not decrease trade barriers, because countries have learned to add a new national regulation on top of every EU one, forcing foreign companies to increase their compliance cost if they want to break into a national market.

For years and years, Europe was indeed a continent of decreasing trade barriers. While they continued to be strongly protectionist against the outside world (erecting anti-GMO laws primarily as protectionism for EU farms), they were at least reducing barriers within the block. But Europe is not immune to the anti-globalization sentiment that has swept across Britain and America since 2016. It’s just that much like Biden, European politicians are caught between maintaining their appearance as internationalists while still wanting to be protectionists and nativists.

So rather than erect tariffs, the EU countries have recently relied on “soft” barriers, barriers which don’t *technically* forbid entry of foreign goods, but which do place onerous costs on anyone who wants to enter the market. And a supposed internationalist has to justify their protectionism somehow, they don’t have Trump’s luxury of just honestly stating their beliefs. So they rely on their old faithful excuses: health and safety.

Biden claimed that foreign goods were a national security issue. China was the security threat that we were supposedly countering, but we countered China in part by banning Vietnamese solar panels, Mexican cars, and Canadian lumber.

And for the EU countries health, environmentalism, and data privacy are paramount. They’re part of what separates Europe from America after all. So who cares that added calcium isn’t unhealthy, or that Dutch companies are making biodiesel the same way French companies do, if it’s foreign we can claim it’s unhealthy and unsafe by default. And then we ban it until they comply with our expensive tests, or until they start making the product in our country, or until they stop being foreign and sell themselves to locals.

This is exactly what Biden and Trump wanted: American goods instead of foreign goods. But the EU countries use regulation to achieve this goal since they can’t tariff the single market.

And this is one of the main reasons I push back against regulation. I’ve said over and over, regulation is not intrinsically good or bad. Good regulation is good, bad regulation is bad. But I’ve seen over and over how politicians hide their protectionism behind a coat of regulation. And I’ve seen how most people have an intrinsic distrust of deregulation, meaning whenever I point this protectionism out I’m accused of wanting to destroy health and safety.

“Foreign cereal is unhealthy,” “foreign biodiesel is bad for the environment,” “foreign Tech companies will steal our data,” it’s very easy to just claim this without evidence and get people on board with you. And it’s *surprisingly* easy to do when “foreign” just means another country in the EU, wasn’t Europe supposed to have solidarity?

And it’s impossible to prove a negative, so proving that the cereal is no less unhealthy, the biodiesel is no different, the foreign Tech has the same policies as the native Tech, this is a losing proposition and expensive to boot. So protectionism goes on unabated, and then people wonder why the EU is still falling behind economically. Well Mario Draghi told you why, it’s because even before Trump the EU was putting tariffs on itself.

I write this in part out of frustration and in part as an attempt at education. People are negatively polarized against Trump, and so even people who never heard or cared about tariffs are deciding that tariffs are bad and we shouldn’t do them. Some neoliberal Democrats are hoping that this lets them finally remake the coalition, and kick out the protectionists like Biden and Sanders in favor of rebuilding the Clinton-Bush-Obama consensus of free trade.

But even if this happens, I’ve seen way too much evidence that this will not be a radical remaking of ideology. Protectionism will, as it has in the EU, simply become the purvey of health and safety. Even the neoliberals of the party have trouble arguing against health and safety, especially when Democrats as a whole are so negatively polarized against deregulation.

So that’s what I really wanted to say: regulations are not always good. They are not always bad, but they are not always good. Don’t assume that just because the government banned something, it was right to do so. Be open to the possibility that they’re protecting their markets just like Trump is.

If I Ruled Britannia: economic reforms

Sir Keir Starmer, the newly elected King of England, 2024 pencil sketch

Last time on Streams of Consciousness, I was talking about the economy of Great Britain and what they needed to change to improve things. They’ve tried raising taxes, they’ve tried cutting spending, but their fiscal deficit is only rising and new loans to cover the deficit are getting ever more expensive. My previous recommendation was spicy and probably unpopular, so I quarantined it in its own post and am putting the rest of my recommendations here.

But first: what should Great Britain *not* do? Well first of all I agree with Tony Blair: they shouldn’t put retaliatory tariffs on America. And this isn’t because I’m biased and don’t want them to hurt America, it’s because *I want what’s best for Britain and don’t want them to hurt themselves*.

It may sting to allow Donald Trump a “win.” He’s jacked up tariffs and demanded that no one else retaliates with their own. If you do what he’s asking, aren’t you letting him win? Well if you think retaliatory tariffs are a smart move, you must think that because you believe they will hurt America with only a modest affect on your own country. But that’s wrong, tariffs are a huge blow to your own country, with only a modest affect on the one you’re tariffing. Doing what Donald Trump wants just means letting him win the foot-shooting competition.

Tariffs are inflation in action: everything gets more expensive for absolutely no reason. Because everything is more expensive, everyone is poorer (since their money doesn’t go as far). And tariffs don’t “protect” domestic industries, they destroy them. They destroy competitiveness because there is no market force pushing companies to improve their products. With tariffs, it’s always more viable to increase your profits by rent seeking (demanding the tariffs rise yet further) rather than by self-improvement. Thus the companies stagnate and rust out. Less goods are produced at a much higher cost, everyone is poorer.

This is true even when your tariffs are “targeted.” It’s just that “targeted” tariffs destroy only a few industries instead of all of them. Donald Trump tariffed you, but if you retaliate with tariffs on on American fuel and aircraft (major American exports), you’ll harm your own airline industry by raising their costs. Needless to say your airlines will have to raise their own costs, harming your tourism/travel industries, and thereby harming your citizens who can no longer afford airfares. America will feel some harm, yes, but not as much as your own people.

“We’ll substitute American goods by buying goods from Europe!” Trump wants to substitute foreign goods with American goods, do you think that will work for him? It won’t work for you either.

Tariffs also destroy industries by raising the cost of all their inputs, since again tariffs are just inflation. The steel company can raise its prices since it’s no longer competing with Chinese steel, and has no incentive to innovate because it plans to ask for more tariffs next year. So if you’re a manufacturing company making anything with steel, all your steel just got very expensive and will only get more expensive from here. Might as well cut wages, it’s the only cost you can control.

Many manufacturers will go bankrupt, they can’t afford the higher prices. A few dozen steel jobs will be “saved” at the cost of thousands of higher-paying manfacturing jobs. Those steel workers will then be laid off because with all the manufacturers going bankrupt, no one needs so much steel. And besides, the cost of iron has gone up with the tariffs on iron (and the iron mine is soon to go bankrupt as they can’t afford the machines needed to keep mining).

Think of it this way: if you think retaliatory tariffs are a good idea, then you think Trump’s tariffs in general are a good idea. You agree with him that the tariffs hurt the target countries more than they hurt the country placing them. You think Trump is doing smart economic policy, and are just mad that he’s doing it to *you*.

So again, don’t complain about giving Trump a *win*, reject the cognitive dissonance on tariffs and accept the one and only truth: tariffs are bad for growth, bad for prices, and bad for workers. Biden knew this in 2019, but I fear the cognitive decline hit him fast since he forgot it by 2021. (example, example, example)

Anyway that’s what Britain *shouldn’t* do, so what *should* it do?

How about reducing the need for occupational licensing? “Licensing” sounds good in theory, the Government is going to step in and demand minimum qualifications for certain professions. But everything sounds good when you ignore the costs and handwave the benefits.

Licensing sounds nice because you immediately think of doctors and nurses. But many many jobs have mandatory licenses that simply do not need them. Does a horse trainer really need a license? A piano tuner? A wig-maker? Adding a license does nothing except make it harder for people to get jobs. It’s part of what’s killed “entry-level” positions, there is no such thing as “entry-level” in an industry where any work at all requires a specific license.

20% of UK jobs need a specific license, which ossifies the labor marker and prevents workers from job-hopping to find better wages. You may have veterinary training, a fondness for horses, and see well-paying jobs opening up in the horse-racing industry. But without a long and arduous licensing process, you’re cut out from that part of the labor market, forced to keep working at Tesco for almost nothing.

You may ask “but without a license, how can we ensure these workers are competent?” You interview them, you look at their CV, you contact prior employers. An incompetent employee can do damage yes, for instance an incompetent Tesco stocker can leave heavy merchandise off-balance to crush unwary shoppers, so do shelf stockers need a license? Be honest, exactly how much is saved by having entry-level jobs be licensed? Quantify all the harms, both physical and monetary, then weigh them up against the costs.

Because licensing *does* have a cost. It lowers social mobility since the lower class can’t afford to spend years getting licensed before getting their first job. It hampers growth by preventing industries from growing to meet demand. And it drastically raises costs for licensed labor, without really raising wages.

How can that be? Aren’t licensed jobs paid more than unlicensed? Yes but look at the cost of getting that license, with its years of training and bureaucracy. Look at the cost of *keeping* that license, with mandatory retraining, continuing education, and the like. Time is money, and all the time it takes getting and keeping a license usually drains any additional pay that the license brings.

And look at how that license locks you into a single career, unable to switch things up to chase a higher wage. I’m sorry, you’re a *horse* trainer, *dog* training is a different license.

And study after study shows that very few licenses improve outcomes. Doctor, nurse, these require years of training and understudy, a license here may be warranted. But this kind of thinking is needlessly applied to far too many jobs, most of which show no difference in quality between licensed professionals (in countries where a license is needed), and unlicensed professionals (in countries where it isn’t). License medical and legal practitioners, let everyone else be.

So that’s occupational licensing. My next suggestion for Keir: end planning permission and build housing on the green belt. I wrote about the Green Belt before, but for those of you who missed it: the Green Belt isn’t green, and Britain should build on it.

“The Green belt” of is a bunch of land surrounding many of Britain’s largest cities. The name conjures to mind beautiful forests and fields, untouched by Man since the days of yore. But it’s actually car parks and monoculture farms, forbidden from being built on so that landowners can prevent their neighbor’s property from being bought up by the urban bourgeoisie. It’s a NIMBY version of feudalism.

And the Green Belt does have houses by the way. NIMBY houses for people who don’t want anyone to live near them, but also don’t want to pay for that privilege. Instead of buying the land surrounding their house (and thus paying tax on it), they simply demand no one *else* be allowed to build anything there.

So build on the Green Belt, put apartments on the car parks. Housing is unaffordable in Britain, build more houses and prices will come down. Build more apartments and rent will come down. And with housing and rent getting cheaper, people can afford to spend more on buying goods and services, pumping more money into the economy and creating more jobs.

Importantly, *the Government does not need to do this building*. Too many people think that if the Government is not actively building things, either with its own taxpayer-funded corporation or through special subsidies, then things just won’t get built. But that is not at all true. A plethora of private companies would love to build and sell houses, but Government laws prevent them. So just repeal the laws and the companies will build, no special subsidies or taxpayer-funded company necessary.

And while we’re at it, do away with local planning permission. People complain about developers “banking” land, holding it without building for years. That’s only done because it takes on average a *decade* to get permission to build anything. If someone wants to build and sell houses, buying the land is step 1, steps 2-90 are all planning permission. Cut out those steps and the houses will be built faster and cheaper.

Local councils hold far too much power to block housing, get rid of that power. Instead of a situation where council have to give “permission,” create a national “by-right” system of planning. Developers submit a proposal to build a dwelling at a location, a national organization makes sure it’s up to code, and once they OK it development starts. No more veto-ocracy by local NIMBYs.

Great Britain is no longer a feudal society, you shouldn’t require the permission of the local landlords to build on your own land. Local landlords don’t want you to build a nice apartment that competes with their crack house? Tough. End local planning permission and kick the landlords to the curb.

And now here’s my final suggestion for Keir Starmer, get rid of bank ring-fencing.

Actually that’s not my suggestion, but it was raised as a possibility by British politicians. And the suggestion isn’t that outlandish, Germany ended its ring-fencing over a decade ago

But wait, what is/was ring-fencing? In 2008, the Financial Crisis/Great Recession happened when banks made risky loans, those loans defaulted, and the banks went bust. This cause a knock-on effect throughout the economy.

The risky loans often came from the “investment” side of the banking business, but when the bank went bust even the the “core” side (which held consumer’s money) was hit. Ring-fencing meant keeping investment banking separate from consumer banking, so any bad investment bets would have no effect on consumer savings.

But banks are banks, and economies of scale mean one bank doing two things is usually more efficient than two separate banks. That’s why some want to get rid of ring-fencing and let banks make more money. Germany already did so, why shouldn’t Great Britain? Let the good times roll again.

I don’t know if ending ring-fencing is good or not because honestly I don’t actually know much about its effect. What efficiency is gained by combining consumer banking and investment banking? What is lost by ring-fencing? But I don’t reflexively hate this idea the way I probably would have hated it 10 years ago, less than a decade after the Financial Crisis. I don’t know, I’ll need to do more reading.

So anyway those are my proposals the economy of Great Britain. Keir, if you’re reading: work on this for me, would you?

Deregulation is a dirty word on the left mostly because it’s a clean word on the right. But this reflexive partisanship isn’t helpful, regulations are not always good. Removing bad ones is necessary for an economy to grow. And if Labour wants growth, if they want to stop having to come out with more taxes and less spending every six months, then they need deregulation.

Post Script: Talking about the banking deregulation, I was reminded of Thatcher’s “Financial Big Bang.” No time to discuss it today, but I hope I remember to do so soon, because it’s a fascinating topic that explains a lot about today’s Great Britain.

Perception and Reality

Well it’s been one of the most tumultuous 3 and a half weeks in politics, ever since the June debate between Biden and Trump. Since that debate:

  • The media perception of Biden has degraded from “frail but sharp old man” to “doesn’t always know what’s happening around him”
  • The Democratic Party line has gone from “Biden is the nominee, we can’t change him or it will cause chaos” to “Harris is the nominee”
  • Every Democrat in congress seemed to be calling for Biden to step down, and
  • Biden has stepped down as candidate, endorsing Harris

Some Democrats have (as they have all year) said that this was nothing more than an overblown media circus, that would have never caught fire if the lyin’ press hadn’t been so desperate for clicks that they cooked up a scandal. There’s a strong current among the Stancilite wing of the party to claim that every voter is an automaton who believes nothing except what the media says. So if the media says Biden is old, that’s what they believe. But the media *should* have said Biden was sharp as a tack and steering the ship of state, because then everyone would have believed that.

The idea that “The Media” (capital T capital M) is always against the Democrats is part and parcel of liberal mythmaking. Nevermind that it’s also part and parcel of *conservative* mythmaking, I encountered this liberal mythmaking first-hand in the aftermath of the Howard Dean campaign.

The liberal myth goes something like this: Howard Dean was a threat to the Establishment with powerful grassroots organization and nationwide appeal. But one night when trying to give a triumphant yell, he instead gave a weird-sounding scream. The Media repeated the “Dean Scream” endlessly, making a mockery of him to the voters and torching his campaign. In his stead, the underwelming, flip-flopping John Kerry was sent to lose against George W Bush. If *only* we’d stuck with Dean!

The problem with the “Dean Scream” myth is that it reverses cause and effect: it says that The Media used the Dean Scream to discredit him in the eyes of the voters. Yet looking at the record, the Dean Scream happened as he was trying to gin up his supporters after a dismal showing in the Iowa caucus, in which he vastly underperformed expectations and got just 18% of the vote, less than half of front-runner John Kerry and a very distant third behind the ascendant John Edwards.

Taken in context, The Media didn’t discredit Dean, the voters had already turned their backs on him. Dean was supposed to be a front-runner going into the caucus but his very poor showing put paid to that idea hours before his historic scream.

Kerry and Edwards would go on to be presidential and vice presidential nominees for that year.

Yet the idea that the Media creates perception (and therefore reality) still has power among the twitterati. When Biden was dealing with the fallout of the debate, many liberal commentators tore into The Media, claiming that if anyone was suffering from dementia it was rambly, half-awake Donald Trump. And since Biden has now dropped out, liberal commentators are trying to will a “Trump has dementia” angle into existence.

This seems like an insane take to me because *we all saw the debate*. No matter how much Trump lied and deflected, he said real words and you could understand them, Biden sounded like he was barely awake! The line of the night was Trump’s terrifyingly accurate quip of “I don’t know what he just said, and I don’t think he does either.”

And we can all see that Trump has done rally after rally after rally while Biden really *hasn’t*, and team Biden did everything in their power to prevent even a single off-script moment from ever being seen. All the while reports are coming in from allies all across congress and *across the Atlantic* that Biden hasn’t been all there for a really long time, and is confusing people and places left and right.

Meanwhile the curious voter can tune into any one of the many rallies that Trump holds, or just watch Fox News and see a man doing twice as many rallies, interviews and the like than Biden. As well as doing infinitely many more unscipted spots since Biden didn’t seem to do any.

Saying Trump is too old will certainly resonate, half the country already thought he was while 80% of the country thought Biden was. But trying to tar Trump with the same brush Biden got will not work I think because the reality doesn’t look like what the Democrats want out of a narrative. Like the Dean Scream myth, Democrats have taken away the idea that The Media creates reality, and if they can just *will* a narrative into existence, they can say anything about their opponents that their opponents say about them. I don’t think that works any more than Republicans trying to call Democrats election deniers works, because people have eyes.

At the end of the day The Media can certainly amplify stories and let narratives run away with things, but the idea that they can create something out of nothing is a myth. And Democrats trying to say *the media needs to be saying this” ie “Trump has dementia, Trump can’t speak straight,” trying to demand The Media simply reverse the story and put all of Biden’s flaws on Trump, well that isn’t going to work. They’d do a lot better hammering on things which are real instead of trying to create something out of nothing.

That may have been part of the problem for Democrats these past 3 weeks. While they were doing damage control for Biden, the most common rejoinder I saw was “Trump is just as old and just as senile!” The first is false, but at least close to true, Trump is very old. The second is an outright lie, 50 million people saw the debate, and you can’t lie to their face like that.

If Democrats lose, I think The Debate will enter the hall of myths alongside the Dean Scream, as a moment when The Media sharpened their knives and took out the strongest Democratic candidate available because (laughably) they were in the tank for Republican. And I think myths like that will make the party far weaker than it would otherwise be.