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61 sats \ 3 replies \ @Undisciplined 9 Apr \ on: Tariffs, Capital Heterogeneity, and RealCosts ofIntervention:TheAluminum Example econ
Considering no one thinks about heterogeneous capital, other than the thoroughly ignored Austrians, it's not surprising that this is going to be a problem.
Another problem, especially with these tariffs being implemented erratically and via executive decree, is regime uncertainty. When the next regime can, and likely will, roll back these tariffs, it doesn't make sense to invest in the infrastructure that would make sense under the tariff regime. Financial capital will just sit on the sideline, until the future is more clear.
If they really want to switch to a tariff system of raising revenue, they need to push that tax reform through Congress, so it's harder to undo.
I have to agree that, “Stroke of the pen, law of the land,” is not the right way to make laws or economic policy. But what can you expect from the experts on economics in the administration, now? They are not completely Austrians or Public Choicers, but took most of their educations under the Keynesians.
Uncertainty, is the largest factor roiling the economy, in my opinion, however, isn’t that exactly what Trump is known for? Doesn’t he seem to put all the pieces in the boxes, close the boxes, then, unmercifully shake them and dump them out to see what he gets out of it? Being a known bull in the china shop definitely engenders lots of anxiety and trepidations in everyone, but, it seems, that is what we want to break what is currently the status quo in the economy that is failing.
I have another post that connects with this well: #939395
And even another that fits the situation well: #939380
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That's true, but it's a very bad approach for something like this, where he needs major long-term capital investments.
For other things, it's fine. Rattle the cages and get concessions. What do you know? It turns out no one was actually committed to the woke insanity. It turns out they'll give it up as soon as there's no money in it. Same for the climate alarmists.
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Yes, the uncertainty is perhaps the worst thing for getting investments. I just wonder if those that are saying they will invest trillions into our economy, will be sitting on the sidelines until all the shaking out ends and does not come back. That would make a whole lot of sense to me and, I suspect, to those investors, too. How could Trump ever have made investments in real estate during uncertainty? I will bet he never did.
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