Are tariffs a good idea? One economist’s take
Posted On December 26, 2018
We all want to see the economy grow and create jobs. A favored method in the current U.S. administration’s efforts to accomplish this has been to use or threaten to use tariffs against foreign countries to level the playing field for American businesses.
We’ve been told they will save American jobs, but our guest in this episode of “What’s Working with Cam Marston,” economist Peter Ricchiuti of Tulane University’s Freeman School of Business, begs to differ.
“I think tariffs are insane,” he said. “They’re a prosperity killer. … I think these things sound good on a political stump, but they don’t work.”
They don’t work, Ricchiuti says, because we’re part of a global economy now and when we hurt our trading partners, we’re also hurting ourselves. “It’s not a zero-sum game,” he said. “If other countries are doing well, we’re doing well because we’re selling to these folks. If their economy goes down, we get taken out with it.”
What’s more, Ricchiuti says, it’s not foreign competition that’s the main threat to American jobs. It’s technology and automation. And that competition is only going to increase. Electric cars and self-driving trucks may become commonplace sooner rather than later.
Ricchiuti, founder of the Burkenroad Reports investment research program, helps us make sense of the fluctuations in the stock market and shares why they may be indicative of future trends. He also shares his thoughts on the recent tax cut and attempts by the executive branch to influence the Fed, and reminds us why our extended economic expansion – currently the second-longest in history – can’t last.
“One of the things about capitalism, of course, is: It is cyclical,” he said. “There will be a recession. I’ll be surprised if we don’t get some kind of recession between now and 2020.”
But Ricchiuti isn’t all doom and gloom; he’s excited for the next generation and he’s bullish on our future.
“Anybody that’s bet against United States since 1776 has lost,” he said. “We will regroup; that’s the way the country’s structured. … In technology, nobody can touch us. In the things that are going to count going forward, we’re the best on the planet.”