More shocking economics in the media
Flipping through the Reuters app a few days ago I found an article about Automakers and unions insisting that there must be strong currency rules in any US-Japan trade deal. In it I found this bit of shock(ing) econ:
At a hearing on U.S. negotiating objectives for trade talks expected to start early next year, the United Auto Workers union called on the Trump administration to demand imposing strict quotas on Japanese vehicles and parts, with any increases based on the growth of U.S. automotive exports to Japan.
Desiree Hoffman, UAW international representative, said that despite zero tariffs on vehicle imports, Japan’s auto market is largely closed as a result of other barriers such as Japan-specific regulatory, safety and emissions standards and currency manipulation to push down the value of the yen.
“These barriers have created an uneven playing field so much so that for every car that the U.S. exported to Japan in 2017, Japan sent 100 back,” Hoffman said. “Any loosening of the 2.5 percent automotive or 25 percent light truck tariff would further direct Japan’s overcapacity to our shores, exacerbating the problem.”
So, let’s see here… the US imposes a 25% tariff on light trucks and 2.5% tariff on cars coming into the country while Japan has no tariff, but its own set of safety and emissions standards, just like the US has its own set of safety and emissions standards. Despite all of this, the American cars seem to whimper out at a rate of 100 to 1 over there.
It might just be me, but I think there’s an important message being lost in the trash economics of blame, like perhaps the protectionism tariffs imposed by the US really aren’t doing average Americans any favors, and any perceived favors done for the US auto industry simply prop up that which needs to change so we can all have our wallets taken for a ride a while longer. If all these automakers need to do is meet Japanese automotive standards, then during the supposed Japanese easy money “sugar rush,” one might think that American cars would be the hottest things around over there… and they aren’t. Or don’t the principles in easy money propaganda apply over there? Just who do these union people think will buy American cars in Japan if they aren’t buying them now?
I kicked my American car habit a few years ago, with my expensive 2005 Chrysler that was in the shop more than it was out being the last one (God, how I truly desired to just roll it over a cliff and make it look like an accident), and now I am even more sure that switching was a good move. I’ve been driving a Mazda happily and with something still left of my wallet since 2015.
Politics is always something of a subjective subject – especially labels. I was watching stuff on the TED app last weekend, and in one of the talks there was a Brit guy who claimed to be a liberal globalist talking about his view of why Brexit happened. He spent the first few minutes of his talk covering lots of points about the politics of Brexit that I could agree with and said all the right things about needing to do a better job of addressing the needs and sensitivities of the people in districts who voted for it, covering economics and political representation. But then he got on to the topic of education, because even though these people feel unsatisfied economically as if having received the dirty end of the stick, at the heart of everything is xenophobia. And for the next 10 minutes spoke about how to get the Syrian refugees into these districts – as if their needs are so important as to tell the people voting for Brexit to eat it and smile.
The truth of the matter is that this person, and probably many more like him, don’t care about the sentiment of their fellow countrymen or the well being of the refugees when they spend a minute or two passing off non-specific warm fuzzies toward the citizenry as if giving a speech for a beauty pageant, and then take it all away getting into the nitty gritty details of how refugees, who truly deserve to finally have some peace, can be shipped right into districts where they are not wanted as an educational exercise. What could go wrong there?
The sad part of all of this is that Brexit can only make the pool of elite statists to contend with smaller.