OFF THE PAGE WITH RAYMOND ATKINS

OFF THE PAGE WITH RAYMOND ATKINS

As a public service to you all and because Mandy told me to, and she can get fussy if I don’t do what she says, I am going to weigh in on the ugly subject of tariffs. If you already understand everything there is to know about these little suckers, then you are already smarter than the average politician, so please skip this and go back to whatever you were doing. But if you are in the dark and wondering what the hell is happening to what was once a perfectly healthy economy, read on. Oh, by the way, my qualifications for elaborating upon this complex phenomenon are impeccable: for 70 years I have been getting screwed by Big Government, Big Business, Big Medicine, Big Pharma, Big Insurance, Big This, and Big That, and while I was shelling out all those years I have kept careful notes on who got paid, who didn’t, and who was doing all the paying.

A tariff in its pure form is a market equalizer. It is a fee placed upon imported goods so that their final price to consumers will be similar to domestic competitors’ prices. That’s all there is to it. Let me give you an example to help clarify the concept. Suppose I am the sole American manufacturer of, oh, say, golden toilets. Business is good. I don’t sell too many of the things, because what kind of crazy person would buy a golden toilet, but when I do sell one, I can charge whatever I want, because I am the only game in town. So, I am rich, and life could not be more awesome. Then out of the blue, some foreign devil starts producing golden toilets much cheaper than I can and is cutting into my profits, which cuts into my ability to spend my golden toilet money as I wish to.

Oh man, I almost forgot one of the most important pieces of this puzzle. I make about 100 million dollars per year and pay almost no taxes. My golden toilet business also makes a healthy profit, but after utilizing all of the various loopholes provided to me by the government, I am able to show on paper that the enterprise loses money. My employees on average earn about $15 per hour, and they do just fine, bless their blue-collar hearts. If their spouses work as well and they don’t try to live beyond their means, have too many children, or get sick, they can have nice little lives.

Now back to the tariffs. In my hypothetical example I am being undersold, and my healthy slice of the American Dream is being put at risk just as the 2025 Lamborghinis are arriving at the dealership. I could, I suppose, cut my prices to try to compete while hoping that this is just a temporary problem that will eventually resolve itself. That is what Adam Smith, dour Scotsman that he was, would have recommended. To help minimize the economic impact to my company, I could have a heartfelt meeting with my employees at which I would explain the need for belt-tightening while affirming that we must all be willing to make sacrifices for the good of the team. Then I would cut their hourly wages by $2 and take away their health insurance. No, I would not cut my own wage; that’s just crazy talk.

Another thing I could try is to leave my prices as they are and try to meet the competitive threat by emphasizing intangibles such as quality and service, but unfortunately the quality of my golden toilets is marginal and my service sucks, so that’s out. I could diversify into golden sinks and golden showers, I guess, but one of those, at least, has connotations that I don’t believe my marketing department could sell around. Or I could pack up the whole shebang and move it overseas where my overhead would be much lower so that I, too, could make cheap golden toilets. Ironically, there used to be two golden toilet businesses in this country, but one of them did just that a few years back and is now trying to cut my throat, and that is my problem.

Anyway, I am going to do none of that, except maybe to go ahead and cut those hourly wages by $2 while I have the opportunity; I didn’t get to be the toilet king by being a nice guy. Instead, I am going to hire a lobbyist to go to Washington to plead my case. A lobbyist, for those of you who don’t know, is a person who bribes Senators and Representatives. I know it sounds sketchy, but I swear to you it is legal. My lobbyist will go to DC armed with golden toilets to gift to key Congressional personnel, because once they feel the kiss of rare metals on their nether regions, they will see the need to help me. My lobbyist will also be handing out travel junkets to exotic places so that some golden toilet fact-finding can occur. Yes, I realize that when you and I need to find facts we just go to Wikipedia, but this is different; pay attention. In the meantime, I will journey to the swankiest of golf resorts and play a few rounds with extremely important people while casually mentioning my needs over Big Macs and Diet Cokes in the golf cart between holes. Of course, I will let the extremely important people win.

After all of this, tariffs will be imposed upon the foreign competitor, and the market will be equalized at the higher (my) price. The spin will be that this action is for the good of the country, and while that may not be true, it will surely be good for domestic golden toilet manufacturers, which is to say, me. The cost of all of this will be borne by whomever buys a golden toilet, so it is a win/win for me. Oh, and don’t worry about my hourly employees. They will be fine. Just fine. In a few years I will bump them back up to their original salaries, and they will be grateful for the raise. In the meantime, they can just eat out less, and if times get really tight, maybe they can have yard sales.