Friday, March 07, 2008

Thoughts on Tariffs and Trade Deficits

I was discussing tariffs a couple days ago when I remembered a thought I have had in the past, but never written down. It is kinda mainstream, so I find it embarrassing. But here goes:

Get rid of the patchwork of tariffs and embargoes and then.... Why couldn't America pass a single tariff-mirroring law? It would simply state that whatever tariff or embargo a country places against American goods is automatically placed upon that country's goods. No waiting; no delay; and no restrictions against countries that place none on us. Perhaps it would also help with trade deficits and outsourcing.

Trade deficits seem a little imaginary to me. Which is more valuable: printed paper with dollar signs or real goods that can be used to make a better life for the people who possess them? When the dollar collapses would you rather have a big bank account or a house full of useful items that you purchased from other countries (who now have your worthless paper).

Outsourcing is a form of "division of labor". If you are good at doing something, people will seek you out to purchase that product or service. As long as you charge a price people are willing to pay, that is. Minimum wage laws mess with that formula. Now, I am not sure what companies are thinking when they set up their customer service phone centers in places where the employees have such a strong accent that they can not be understood by the average person. Unless they really have no interest in "serving the customers".

Eh. Anyway, those are my random thoughts for the day.