I would really love to understand why there is not a political party that wants free market capitalism any more. We have two choices: 1) Democrats: always coming up with new ways to complicate business transactions. Sometimes with good intentions but also usually misguided. Yes, they believe in something called “modern monetary theory”. Say no more. 2) MAGA: isolationist nationalists who want to cave to monopolies and remove competition from the market. Tariffs, protectionism, all the stuff proven to hurt a free market. That’s the platform, really? Can we please get back to the values that allowed our economy to generate a strong middle class? What happened to the free market proponents?
The quick answer is no. There's too many wealthy people that would prevent that from happening via their political donations
Free market capitalism is the ideal. The problem is the US has become dependent on China for many products. The thinking at the highest levels is that we should not let China hold our economy by the testicles. The US needs to be self-sufficient. Tariffs are bad for the economy but they can help America be less dependent on China
We can put our fingers in our ears and say...lalalalala free market competition with China...because I wish it to be true, therefore it is true. But it is not true. We are not in a free market competition with China even if we want it to be so. Both the CCP and the US government would have to agree to completely stop distorting the market for there to be free market competition. Once we accept that reality, a productive conversation on US economic policy is possible.
Why is it bad for the US to import products from China? Lower cost manufacturing raises standard of living in both the country that manufactures the goods and the country that consumes the goods. This has been twisted as a bad thing by populists.
China heavily subsidizes certain industries with the goal of undercutting all competition and creating international monopolies. That is the problem with importing from China in some instances. On the surface and in the short run it might seem benign and beneficial to us, but China is playing the long game and trying to control critical global supply chains in certain areas. Exhibit A: Electric vehicles. We are not in a free market competition with China in electric vehicle manufacturing. It is anything but that. It is a game that is rigged in their favor because the CCP has moved mountains to subsidize electric vehicle related manufacturing. What we do about China's subsidies to Chinese electric vehicle manufacturing companies is the question. You either have to subsidize American electric vehicle manufacturing to level the playing field (what Democrats were trying to do) or you put tariffs on electric vehicles coming from China (what Trump is trying to do). The worst option of them all is the free market option, which allows the CCP to bully the market with aggressive subsidies. Neither political party advocates for that option.
A quote from Kevin O'Leary on doing business with China: O’Leary shared his frustration with China, rooted in his business dealings: “I'm an individual who does business there. My businesses have been absolutely screwed. I've said it countless times. They don't play by the rules. There's nothing reciprocal in our relations.” As a result, he advocates for strong measures. O’Leary emphasized that the only way to make it work with Chinese President Xi Jinping is to “inflict massive economic pain and risk on him by imposing tariffs on sectors where many Chinese people are employed.” “The only way to put [Xi] at risk is to say, look, if you want to mess with the largest economy you trade with, then we're going to force a lot of people that make yoga mats or electronics or whatever else it is to be unemployed in your cities, and they'll be rioting in the streets, they won't have any bread, and you will be out of power. That is the only way it's going to work — so very selected high-impact weaponry like tariffs, but you've got to be hardcore,” he explained. “[Xi] only understands the stick. That's all he understands. Any weakness at all, he plays off and he has done so for years. So I'm hoping this is the administration that fixes the problem. I have really been hurt by China, and there are millions of other businesses in America in the same boat I'm in,” he said. 'You've got to be hardcore': Kevin O’Leary warns Trump tariffs on China could trigger ‘riots in the streets’ — says this ‘high impact weaponry’ is only solution. How to bet on the US in 2025
It's a catch 22. It costs jobs in the consumer country, but it makes items cheaper for those in the consumer country that are not impacted by the job loss
