Bailout, 2018 version
The free market doesn’t need this mess
ARECENT modern president of the conservative variety—his name was Reagan—once said that free market societies believe that prosperity and human fulfillment are created from the bottom up. “Not the government down.”
America doesn’t have a conservative in the White House these days, but a populist instead. We’re not really sure if Donald Trump has any kind of inner guiding principle when it comes to economics and the markets. But there’s one thing for certain: He’s wrong about tariffs.
For reasons allies and foes alike don’t understand, the current president has been swinging tariffs around like an ax, hitting glass and plaster and drywall alike. He doesn’t even make clear what he’d like in return for dropping them. He apparently just likes the idea of imposing tariffs, no matter the costs, on Canadians, Chinese, Europeans, you name it.
States like Arkansas are hurt, especially farmers. After the last $50 billion tariff announcement, the Chinese raised their own tariffs on things like soybeans and pork and beef, of which this state produces a lot. It’s a downward spiral. For a quick tutorial on how tariffs pull economies down, see Depression, The Great.
Now comes word that the president has decided to mitigate the damage of his tariff policies. Not by letting the free markets run smoothly, but by putting more tax money to work. His plan is to extend billions of dollars of aid to farmers hurt by tariffs. His tariffs.
We don’t often agree with Rand Paul, but the libertarian does have this one right. As he put it Tuesday: “Tariffs are taxes that punish American consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers—the answer is remove the tariffs.”
Ben Sasse, like Rand Paul a Republican in the U.S. Senate, called the plan “gold crutches” for farmers. “American farmers don’t want to be paid to lose— they want to win by feeding the world.”
Aid for farmers hurt by tariffs seems a temporary solution at best. Like putting on perfume after mowing the lawn. You can only keep applying more perfume for so long. Sooner or later, you’re going to have to take a shower.
At least the president acknowledges that his tariff policies are hurting Americans. That’s the first step. The next step is to admit the mistake. Or, more conceivable given this president, declaring victory and abandoning the policy.
But the best way to clean up any mess? Don’t make one in the first place.