Tariff Eliminations Part 2

The free traders can think of only one thing it seems, and that is cheap consumer prices. While I love cheap prices, I abhor "free Trade" as I wrote in my book, which is now five years old. Speaking of my five year old book, which is out of print, I still can send it to you by E-Mail ONLY (230 pages) on request ([email protected]). Free trade, is in direct opposition to what made America great for its first 150 years. What America did was invent, mine, grow, manufacture, consume, and export. When one consumes what one mines, grows, manufactures and invents, the cycle is complete. When the stuff is exported, it is an added bonus, because capital from other nations comes into ours. As it is, our capital is leaving and going to other nations. It is really simple economics, or physics even.

Filling one's gas tank, is directly opposite from siphoning gas out of the tank. Using electricity from a battery is exactly the opposite from charging the battery. Going up the stairs is opposite of going down the stairs. Selling is the opposite of buying. The thing is so damned simple. Why does the D.C. Gang literally destroy the nation it is supposed to be protecting, by removing tariffs? A tariff is literally, a tax on imports. Why tax imports? Because America has, or should have, or used to have anyway, the world's highest standard of living. This used to be reflected in one way I can immediately think of as I write this, of driving into a filling station and having an attendant wash your windshield, check your oil, and pump your gas. When self serve gas stations first opened (they were unknown when I was young), most women thought pumping their own gas was uncivilized, crude, and many refused to do it. Why did self serve come about? Because of a lowered standard of living. Why was the standard of living lowered? Not because of technology, but because at the same time as our standard of living was lowered, much of our consumable goods was beginning to be made overseas, with resultant protective tariffs being removed. America had to live on the cheap.

The "quarter car wash" which now costs twelve quarters, was also an improvisation caused by a lower standard of living. As a kid growing up in Washington D.C. my Mom used to take our Plymouth through the great car washes with the chain pulling the car along with the brushes scrubbing the car, and it coming out the other end clean, with guys and chamois drying it…usually for a quarter tip. I loved to watch through the windows as the car moving along and being washed. Quarter car wash? No way! That was after we began moving manufacturing overseas, and our standard of living being lowered. There can be thousands of comparisons showing our standard of living being lowered, co-incidentally with manufacturing going overseas. I have never known anyone to make these comparisons before, but I believe them to be true. Of course at the same time as manufacturing left, government grew, welfare grew, and bureaucracy also grew, making the value of the dollar lower, which translates into a lower standard of living.

PROTECTIONISM

That's a nasty word now isn't it? Well, I happen to love it. Protect your home, wife, and possessions? Protect your health, life and other things with insurance? Protect your home by painting it and fixing what breaks? Wash your car and change the oil? Discipline your kids? Buy gold and silver to protect yourself against the falling dollar? Own guns to protect yourself from robbers or assault? Spray your trees to keep the bugs off? There are a thousand ways we protect ourselves, our families, and possessions, not to mention our future. Protection is so basic, that even cave man protected his things and family with his clubs. But "protectionism" is a no-no today?

Nuts, nuts. I say we should protect ourselves against cheap, slave labor. I say we should protect ourselves as we used to do when we were the envy of the world, rather than its laughing stock. I say when we protected ourselves with tariffs, we owed no one and everyone owed us. When we protected ourselves by taxing imports to equalize markets, we were the envy of the world. Equalization is a grand thing to do when one is on a see-saw, isn't it? The heavy gets the short end, and the light-weight gets the long end to equalize the thing. By equalizing the weight distribution on a see-saw, the balance makes it a fun thing to do. If the weights aren't equalized, the light guy sits on top, and is helpless to even get off. People marry equals in various ways, and kids play with equals. Purchases are made equal to the purse contents, and if equalization goes awry, disaster many times results.

Those who spend more than they are capable of paying for, has bankrupted many through the use of credit cards and goofy mortgaging of homes. Unequal marriages in age or intellect, many times don't work too well. These comparisons are myriad also. Equalizing merchandise prices by protective tariffs makes the business and economic cycle work well. Tariffs are not unfair by any means. They are EQUALIZERS, and equalizing things cannot be wrong. However, once the un-equalization gets started, like inflation by un-backed 'money,' it feeds on itself, and is difficult or even impossible to stop. Suppose the thousands of tariffs were never removed? Suppose un-backed dollars had never begun? Here's the way it began, and continues.

Wal Mart, one of the first and greatest offenders, used not to be that way. When old man Walton ran it, he bragged that he sold American. His kids didn't follow his advice and practices. Wal Mart may sell, as an example, shoe laces, thread, and beets, just as examples pulled out of thin air. Safeway or the local department store sells them too. Wal Mart, under old man Walton, sold the same stuff a bit cheaper because he developed a very efficient merchandising, warehousing, and distribution system, while still selling American made merchandise and produce. After he died, subsequent managers of Wal Mart found that they could buy shoe laces and thread cheaper overseas, but tariffs made the prices the same as American thread and shoe laces. Wal Mart found it could buy beets in Mexico cheaper, but those damned tariffs made prices the same. What to do?

Go to your Congressman and tell him that you'll back him with bucks when he runs and needs money for his campaign,.. "And oh yes, there's that little tiny tariff on shoe laces. Could you be so kind as to get it removed, so I can save our citizens money?"

"Sure Mr. Walton Jr., I'll add that into the next bill that comes up for a vote. No one reads the legislation anyway, so it'll be a cinch." Multiply that by a thousand times, or maybe ten thousand times, and guess what? China builds hundreds of factories, Mexico builds hundreds of factories, American factories close by the hundreds, and millions are laid off. We pump our own gas, use $3.00 car washes with the wands, buy ever cheaper and cheaper goods, and our standard of living plummets in dozens and dozens of different ways. We do the best we can to survive, and wonder what in the hell happened to us? If you are ancient like me, you well remember your parents having an average or even lower than average income level, and they didn't have near the problems surviving as you do.

Cheap made in America, is fine, because it fosters competition, and gives the buyer a choice in quality and service. That's how Woolworth got rich, and Walton too. But cheap, coming from overseas, made with cheap labor, and no tariffs, gives us what we have now, and it isn't pleasant…to me anyway. Protect yourself.

October 5, 2006

Don Stott has been a precious metals dealer since 1977, has written five books, hundreds of columns, and his web site is www.coloradogold.com