The Outstater
Tariffs Discombobulated
THE FORMER CHAIRWOMAN of the Indiana Chamber of Commerce has written her list of “threats to democracy,” of chief interest here being her opposition to tariffs. Marilyn Moran-Townsend in a widely circulated letter calls on all Hoosiers — “progressive Democrats working with conservative Republicans, evangelicals working with Muslims and Jews, business leaders working with union leaders” — to join her.
This fits the view of America as a magical democracy where to save the nation one need only summon “the power of the people, participating in multiple coalitions,” in Ms. Moran-Townsend’s words. Holders of this view are generally confident that the Founding Fathers are on their side.
I have my doubts. The Founders designed our government not as a direct democracy but as an indirect one, specifically a constitutional republic. That means that your vote, however allied, is not particularly good at setting precise policy, least of all in international trade — too many compromises on the way to a majority, don’t you know.
Rather, democracy is a process of succession, a process only slightly more civil than the guillotine. It is the leadership in the three branches of government that is assigned the heavy lifting on policy. And the Founders anticipated Moran-Townsend’s concern about authoritarianism not by putting their trust in democracy but rather by checking the power of each branch.
In cynical moments, I call up the playwright David Mamet’s description:
“The Constitution, written by men with some experience of actual government, assumes that the chief executive will work to be king, the Parliament will scheme to sell off the silverware, and the judiciary will consider itself Olympian and do everything it can to much improve (destroy) the work of the other two branches.”
So, before you evangelists, Muslims or whatever enlist in Moran-Townsend’s “democratic” campaign against tariffs you will want answers to a few questions. The first is what tool other than a tariff do we have to keep a bad actor like mercantilist China from gaming the system? A nuclear-armed armada?
More particularly, how do we keep China from using our own energy and resources against us, building up its military to parity, a threat not only to free trade but to every freedom? And who else but the executive, love him or hate him, could wield that tool with any authority or effect?
Relatedly, considering China’s growing dominance in so many industries, how does Moran-Townsend imagine we keep our remaining manufacturers? Would she have us reduced to a resource colony, supplying China only with farm products, fossil fuels and tourism? Is she asking us to sacrifice our Midwest cities and towns to promote free trade while Canada, Mexico, Europe and everyone else gets to interact with our economy on their terms?
Finally, intent is important. We agree it is bad economics to enact a tariff with the purpose of dominating certain markets or giving advantage to certain industries (as we did with the Smoot-Hawley Act of 1930 and as China is doing now). Ronald Reagan rightly warned that it is dangerously self-defeating.
But to enact a reciprocal tariff policy, one that burns itself out as other countries drop their tariffs, is reasonable — common sense, even. Nations around the world are recognizing this, or so reports Michael Lind, writing on “Why Tariffs Are Good” in the March 11 Free Press:
“Governments are resorting to tariffs and industrial policy not because their prime ministers and presidents flunked Econ 101 but because they do not want their economies de-industrialized by a flood of low-priced, state-subsidized Chinese imports.”
Again, Moran-Townsend’s letter mentioned tariffs only among other concerns, and in no greater detail than to imply that opposition was “self-evident” for right-thinking Hoosiers. Her real agenda seems to be blocking the current Republican administration across a broad front — an odd position for someone so closely associated with the Chamber of Commerce, the most special of special interests.
Still, I would give Moran-Townsend the benefit of the doubt. She is a respected player in public policy. But in regard to tariffs, her “democratic” coalition resembles the one that got us into this trouble, namely Democrats who sold out union jobs to promote globalism and Republicans who privately benefitted from “free” trade at the expense of their country.
I cannot think of a less worthy cause. — tcl
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