Author: ben45

Middlemen – A Solution to Trade Imbalance

President Trump is concerned with trade imbalance. While many seem to praise the Buy Local idea. Here is a modest proposal that should satisfy everyone.

Trump’s solution is to impose tariffs or non-tariff barriers on foreign imports.

The President’s tariffs make the government a middleman, separating willing buyers from willing sellers, and giving the federal government a piece of the action.

Sometimes middlemen perform important services, but at other times middlemen just raise costs.  How often do we hear about companies trying to cut-out the middlemen.

We don’t need to have the government be the middleman, raising costs without providing any tangible benefits to consumers. We can have thousands of middlemen doing the job.

There is no reason to have the government involved in commercial transactions and negotiating deals for favored companies with foreign governments. Instead, the government should more rigidly take our natural right to buy from anyone, and force everyone to buy locally.

First, we have to define local. I’ll leave that to the politicians – they are good at making arbitrary rules. For now, lets define local as the distance people can drive and return in the same day. So a 500 mile radius around each person’s home would define local for each person.  Don’t worry, the politicians will also define local for homeless people.

My proposal would do away with mail order, phone purchases or internet sales, and require that all purchases be done face to face. The plan would both help the trade imbalance, and make everyone buy local.

If you want goods or services produced more than 500 miles from home, you would buy from a middleman who lives not more than 1,000 miles from your home. You would meet near your 500 mile border, and exchange your dollars for the goods. But since, the middleman is local, there is no trade imbalance.

This plan would make items produced a long distance from home more expensive. To buy a car produced 3,000 miles from home would take 3 or more middlemen. Each middleman would add a markup. It might workout that someone will build a plant closer to your home, to cut-out some of the middlemen. Of course, the new producers would have to live within 500 miles of their plants, and all the raw materials used by the plants would have to be bought from someone who lived within their 500 mile boundary or bought from a middleman on their border.

But at least the costs imposed by the middlemen would not be arbitrarily set. Middlemen would compete for business, with rates set by the market. If the middlemen make their markup too high, that will give local businesses an advantage. Just like tariffs.

Such a plan would also eliminate a lot of long distance business travel. You could only do business with someone less than 500 miles from home. There would be no reason to travel to distant parts of the world for business. All you have to do is deal with your middleman.

People living in places like Hawaii that are more than 500 miles from the mainland will especially like this plan since it will probably discourage people from moving there. If they need things not locally available, they would have to find middlemen willing to live on ships. Those ships would have to stay within a 500 mile radius of their base.

Shipping oil would be discouraged, since the oil would have to be off loaded at sea onto another tanker. Although middlemen could arrange to buy the ship with oil, and then sell it back on the return trip.

Want to take a vacation in a far off location. You would take a plane that goes, no more than 1,000 miles, and then land and change planes owned by another airline.  Entrepreneurs may build airports in locations not currently served by airports, but if you live more than 500 miles from an airport, you will just drive to your boundary, and then take a bus, or taxi from your border to a site closer to an airport. Eventually you will get there.

This plan would be cumbersome, and it would make things more expensive than how we live today. But expense is not the issue. It is about having more local jobs, and not having a trade imbalance.

Banks, phone companies, stock markets etc would all have to be local. Just think of all the jobs that would be created.

You want to talk to aunt Sarah 1,500 miles from home. Your phone company would have to connect to a phone company whose base was less than 500 miles from your border, who would then connect to another phone company, and eventually connecting to aunt Sarah’s local phone company.

Someone suggested that since Starlink satellites orbit less than 500 miles from earth you could use them. But each 500 mile cluster of satellites would have to be owned by a different company.

Maybe doing business this way would cost more, but everyone would feel good knowing that whether they like it or not, everyone will be buying locally.

Klara Edith Meyers – RIP

Klara Edith Meyers, beloved mother and a multi-talented window treatment designer, tailor, and seamstress, passed away February 14, 2025 in La Plata, MD.

She lived in White Plains, MD for 55 years, where she and her husband Clifford Eldon Meyers raised their three children.

She was born in 1938 in Szombathely, Hungary to Sandor Palmai, a Hungarian Cavalry officer, and Ilona Molnar Palmai. Her family escaped Hungary by walking through a minefield TWICE during World War II and they lived for many years in a refugee camp outside Salzburg Austria, where she attended school at Nonnberg Abbey, the convent from the movie, “The Sound of Music.” While there, she apprenticed to be a tailor and met her husband Cliff, who was in charge of the Armed Forces Radio Station. She and her parents resettled in Sweden in 1954 with other members of their refugee community, who remained close family friends for the rest of their lives. Klara loved telling everyone about her life during those years of their history, hardships and funny stories. She felt for people who were likewise impacted by more recent wars in Europe.         

She married Clifford Eldon Meyers in December 1956, and they had Arthur (in Morocco) and Helen (in Spain). They lived in Europe until 1964, when the family returned to America aboard the SS United States. They moved to White Plains, MD in 1970. Their son Alex was born in Maryland in 1976. Clifford worked as an electronics engineer for the US government, while Klara worked as a seamstress for Robert Hall, Fred’s Mens’ Shops, Davis Bridal and Formal, JC Penney’s and Peebles Department Store. She established her own window treatment business and her work is showcased in some of the finest homes and businesses in the Charles County Area. She volunteered at her childrens’ schools, and was one of the original members of the Samuel A. Mudd Society, recruited personally by the founder, Mrs. Louise Arehart. She and her son Alex cared tirelessly for her disabled husband at home until his death. In her later years she travelled back to Europe 3 times accompanied by her children and grandchildren. In her final years, Alex cared for her fulltime.

She leaves behind three children: Arthur Meyers of Gainesville, VA, Helen Meyers Erslev of Silver Spring, MD, Alexander Meyers of Newburg, MD, their spouses, Sami Meyers, Rita Meyers,  and Henrik Erslev; her 5 grandchildren: Clare and Emilie Erslev, Leah Meyers McKinley (Matt), Jackie Richards (Stephen), Kyle Arnold and 7 great grandchildren: Logan McKinley; Sean, Ashlyn, Sadie, Colton, Ryder, and Bentley Jo Richards.

The family requests that any donations be made in her honor to Last Chance Animal Rescue of Bensville MD. https://www.lastchanceanimalrescue.org , or World Central Kitchen  https://wck.org  serving food to families in the US, Ukraine, Baltic nations  and other nations in need around the world.

Bryan Caplan – Are standards too high?

from

https://www.betonit.ai/p/whose-standards-are-too-high

Prior to any call for government intervention, people should contemplate all of the following:

  • No country approximates a free market, but almost all rich countries have a long history of relatively free-market policies.
  • In contrast, dozens of countries have approximated full socialism. All of these countries have been abject disasters for human well-being. To quote an American politician in a rare moment of clarity, “We have never had to put a wall up to keep our people in.”
  • Looking at the very freest economies in the world, there is little sign that they have taken a good idea too far. As far as we can see, the freer the economy, the better.
  • People around the world attack the United States for having smaller government than Europe, yet people around the world also name the U.S. as the country they would most like to migrate to.
  • “Monopolies” rarely arise on the free market by chance. Firms obtain monopolies by being — and staying — the best at pleasing their customers. When they stop being the best, they quickly stop being monopolies. Often, they stop existing entirely.
  • One of the main functions of actual free markets is giving consumers enough information to make them comfortable. A good reputation is the foundation of every successful business. Thanks to the internet, word of mouth now works better than ever. Which explains the prevalence of 100% money-back guarantees — firms don’t want anyone talking bad about them.
  • Developers cause some problems for surrounding homeowners — traffic, parking, and noise for starters. But they also provide notable benefits for surrounding homeowners — an array of social, shopping, job, and cultural opportunities. The fact that people pay large upcharges for density proves that the package of (all the good + all the bad) that development brings is highly positive.
  • People rarely give large amounts of charity to strangers. But they also often refuse to give large amounts of charity to their parents, adult children, and siblings. When you hear about such refusals, you probably don’t reflexively take the side of the would-be recipient. Maybe the refuser has a good reason to say, “I’ve done more than enough for my brother.” Why then should we reflexively side against taxpayers who don’t want to fund redistribution to strangers?
  • Illegal immigrants are one of the least-liked groups in the country, yet most people still fear that employers will hire them. Why? Because employers have a strong incentive to set personal prejudice aside and hire the best person for the job. Once you acknowledge this truism, how can you take the ongoing moral panic about race and sex discrimination seriously? If you’re paying attention, the real story is that government requires discrimination against whites, Asians, and males.

You needn’t agree with all of these bullet points. As soon as you grant that I’m making some plausible observations, politicians and voters suddenly look bad in a new way. While the free market isn’t perfect, their standards are too high. Instead of piling on even more regulation and government spending, they should be musing, “Laissez-faire seems pretty good. Maybe we should just live with it.”

Protectionism vs. Libertarianism

In a WSJ article Vivek Ramaswamy tries to distinguish between protectionism that is just for National Security, and protectionism for favored economic interests. It’s a fools’ errand when it will be the political process that determines what interference in the economy is for National Security.

I suggest:
Those who want to eliminate U.S. dependence on China in critical areas for U.S. security should consider an alternative to tariffs and trade restrictions. All that needs to be done is for the U.S. military to only obtain supplies and weapons from U.S. producers. If that requires the military to pay more, than at least the burden would fall on all Americans. Whether it be rare earth materials, antibiotics, or flags, if the military thinks it needs them then they should pay for a supply chain to produce them in the United States. If the military supply chain manufacturers are able to compete with global producers, then civilians would also purchase items from U.S. sources. Rather than have centrally planned subsidies to specific industries like chip manufacturers, the cost for U.S. military independence would be visible in the military budget.

Here is his article:
https://www.wsj.com/opinion/the-america-first-divide-protectionism-vs-libertarianism-trade-economy-policy-election-d5a6d91c?mod=commentary_article_pos3#comments_sector

The America First Divide: Protectionism vs. Libertarianism
On immigration, trade and the regulatory state, deep divisions underlie the Trump coalition. By Vivek Ramaswamy Sept. 20, 2024, 5:27 pm ET

What made Donald Trump so compelling as a political leader in 2016 was that he didn’t blindly parrot the GOP’s economic orthodoxy. He rejected the idea that immigration and trade are inherently good, instead asking what policies would maximize the well-being of American workers and manufacturers.

It’s now fashionable for Republicans to say things like “we need to make things here,” and “we’re the party of the working class” without stopping to ask what these phrases mean or why we’re saying them. That isn’t good. An important reason why the old consensus failed was intellectual laziness. For the America-first movement to outlast Mr. Trump, it needs to think through the principles that underlie its policies.

Are we protectionists or economic libertarians? The protectionist approach recognizes the security risks of increased dependence on adversaries like China, but commingles these risks with concerns about price competition for American manufacturers. In this view, we need less international trade altogether; we should use tariffs to stop even friendly countries from “flooding our markets” with their products; and we should use taxpayer funds to subsidize American producers to be more competitive with international competitors.

The national libertarian objective is to eliminate U.S. dependence on China in critical areas for U.S. security. Doing so, at least for the foreseeable future, requires expanding trade relationships with countries such as Japan, South Korea, India and the Philippines. If your top objective is to protect American manufacturers from foreign competition, you necessarily delay the national security objective vis-à-vis China.

On immigration, the historical neoliberal consensus was that if a company can hire foreigners for $10 an hour to do the same job at the same quality that an American would demand $20 an hour to do, the government should design policies that allow companies to hire the cheaper workers. The protectionist position is that the government should favor American workers earning the higher wage. Whereas the old neoliberal position viewed immigration policy as economic policy, the protectionist position views immigration policy as labor policy. Republican senators who support raising the federal minimum wage have stated that one reason is to prevent companies from replacing native-born workers with less expensive foreign-born ones.

The America-first libertarian position rejects the old consensus on different grounds: that the U.S. isn’t merely an “economic zone” but a nation of citizens bound by a shared civic identity. This view favors more-stringent screening of immigrants for knowledge of civics, fluency in English and loyalty to the U.S. through renunciation of foreign citizenship. That means turning many immigrants away, but not because domestic labor unions are afraid of foreign competition.

The deepest divide between protectionism and libertarianism is over the regulatory state. The protectionist camp believes in redirecting the regulatory state to advance policies that favor the interests of U.S. workers and manufacturers. The libertarians think this goal requires sharply curtailing the regulatory state’s power.

Protectionists seek to expand the scope of administrative agencies like the Federal Trade Commission. They believe the FTC’s job isn’t simply to promote consumer protection, but to focus more broadly on “fair” competition—a view Kamala Harris shares. Libertarian conservatives reject the idea that government regulators should pass judgment on what is or isn’t fair—especially if Congress hasn’t expressly authorized them to do so.

The same goes for other less-discussed agencies like the Transportation Department. Protectionists believe that the failure of poorly-run companies in regulated industries like aviation and railroads demonstrates the need for more regulation to protect workers and customers. Libertarians see the regulatory state as the root cause of those failures.

Libertarians oppose expanding the authority of the Consumer Financial Protection Bureau, as a Republican senator proposes in the Capping Credit Card Interest Rates Act. The CFPB recently started demanding small-business loan applicants disclose their race, ethnicity, sex and even sexual orientation. Do America-first conservatives want the CFPB to have such power? America-first libertarians say hell no.

Or take the Education Department. Protectionists argue that education subsidies should be expanded to cover trade and vocational schools along with colleges and universities. Libertarians think the answer is to shut down the department and return the subsidies to states and their citizens.

The conditions have never been riper to curtail the regulatory state, following the Supreme Court’s rulings in West Virginia v. EPA (2022), Loper Bright Enterprises v. Raimondo (2024) and SEC v. Jarkesy (2024). That project would require an amenable U.S. president.

Donald Trump masterfully bridges the divide between these two policy camps within the America-first right: favoring federal intervention to halt Nippon Steel’s acquisition of U.S. Steel on one hand while committing to dismantle the U.S. Department of Education on the other; fighting to protect the wages of American workers while also proposing automatic green cards for foreign graduates of U.S. colleges. But his leadership of this coalition doesn’t permanently close the chasm between the protectionist and libertarian worldviews on legal immigration, trade and the regulatory state. For now it lurks beneath the surface of a presidential race, but the future of America first is still yet to be determined.


Mr. Ramaswamy is author, most recently, of “Truths: The Future of America First,” forthcoming Sept. 24, from which this was adapted. He was a candidate for the 2024 Republican presidential nomination.