alt Hacker NewsProtectionism may work in some cases, but even when it works, it works by making things more expensive. People don't buy American cars because it's cheaper to make similar cars in Mexico. Fine, so let's force companies to make cars in America. It's now more expensive (otherwise we won't be importing from Mexico in the first place).
You add more and more protectionism, it may get some jobs back, but the price is that things get more and more expensive. And not by a few percent, more like by 50% or more. (Just think of how much money an American worker needs to have an ordinary middle-class life compared to a Mexican worker.)
Now consider how much people were angry over the Covid-era inflation and how it was a major factor in Trump coming back (and looks like it's going to be a major factor in Republicans losing the mid-term election this year). Nobody wants prices to go up. Americans say they want protectionism but what they want is a fairy tale protectionism where jobs comes back but prices magically stay stable. It cannot happen, and if the choice is between some other group of Americans in Michigan getting better jobs and you getting your SUV at a "reasonable" price, people will choose the latter. (I'm not digging at Americans - the same is going to happen everywhere.)
It's basically "It's extremely hard to defeat capitalism at its own game." Nobody likes capitalism, but that doesn't mean you'll get popular by defying capitalism.
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Yeah I’m sure the savings will be passed onto the consumer, genius
I think you need to look at the data before making assertions like this.
> People don't buy American cars
53% of cars sold in the US are assembled in the US versus 18% assembled in Mexico.
> things get more and more expensive. And not by a few percent, more like by 50% or more.
The total cost of manufacturing wages only account for 5-15% of the MSRP of a vehicle. So moving manufacturing from an expensive country to a cheap country only changes the price by maybe 10% due to the impact of wages.
I think all of your points are valid and I can't really see any part if your argument that isn't at least directionally correct. But then I'm left wondering:
Why is protectionism working for China?
Things may get more expensive, but if more Americans can live a middle class life even accounting for the inflation of consumer goods I think that is a good tradeoff.
What happens when you remove the velocity of money from the economy and replace it with companies that count on their employees receiving government assistance in order to be able to live? Are things actually cheaper for the average worker long term in our current scenario? Or is it a temporary affordability in exchange for a worse economic future? It seems like things still have to keep getting worse and worse to be financially viable in our current cycle (clothes are Kleenex quality like sci-fi books joked would be issued in a UBI future, enshitification is in everything).
When a system takes the money from the economy and delivers it to the capital class and foreign workers, what happens to that economy? We don't know. We're gambling it will somehow be ok. We are also losing the 50% of taxes that comes from individual workers, so add in losing that velocity of money vector going through the government as well.
It doesn't seem like a sustainable system, nor a cheaper system. Only a very risky short term gamble.
Well, of course, I agree with you. That's why I said I don't think it would happen.
I personally wouldn't mind a world where consumer goods were much, much more expensive and difficult to acquire, even though it would mean that my life would feel harder and less wealthy than it does now.
What I don't understand is whether or not there's any path to take besides watching the country gently sail along the sunset path into oblivion. Is that it? We gave away the keys to the country's wealth generation mechanism, and now we're at the mercy of the global economy to do whatever it wants? I don't want to compete with foreign firms who can hire foreign labor to compete with me and sell on my territory, but do I simply have no choice?