The Trump administration can try to defend its import taxes with as many misleading arguments as it wants (national security, a decimated steel industry, or growing trade deficits hurting the country), but most people aren’t fooled. They see the commitment to impose punishing and reckless tariffs as one more example of the unhealthy marriage between corporations and government officials. It’s cronyism, plain and simple.
Unfortunately, we know who pays the price of that ugly alliance: consumers, unprotected competitors, and economic growth.
Over at the Washington Post, Charles Koch makes the case that business leaders should reject this government-handed privilege, even if it artificially boosts their profits, because it is the right thing to do for society.
The administration’s recent decision to impose major steel and aluminum tariffs — on top of higher tariffs on washing machines and solar panels — will have the same harmful effect. Without a doubt, those who can least afford it will be harmed the most. Having just helped consumers keep more of their money by passing tax reform, it makes little sense to take it away via higher costs.
One might assume that, as the head of Koch Industries — a large company involved in many industries, including steel — I would applaud such import tariffs because they would be to our immediate and financial benefit. But corporate leaders must reject this type of short-term thinking, and we have. If we are to have a system in which businesses can succeed long term, policies must benefit everyone, not just the few.
Unfortunately, tariffs are not the only problem. Our entire economy is rife with cronyism, resulting in regulations and subsidies that are destroying competition, opportunity and innovation. . . .
Tariffs will only perpetuate the rigged system that threatens the very core of our society. When large companies can pressure politicians to force everyday Americans to fork over unearned millions, we should all question the fairness of the system.
I recommend my colleague Matt Mitchell’s timeless study on the pathology of privileges. But I have to say, I love this paragraph from George Will’s essay today:
Protectionism is a scythe that slices through core conservative principles, including opposition to government industrial policy, and to government picking winners and losers, and to crony capitalism elevated to an ethic (“A few Americans first”). Big, bossy government does not get bigger or bossier than when it embraces protectionism — government dictating what goods Americans can choose, and in what quantities, and at what prices.
Yes, exactly: Protectionism = cronyism = “A few Americans first.”