April 8, 2002


by Ralph Hood

April 2002

Ralph Hood is a Certified Speaking Professional who has addressed aviation groups throughout North America. A pilot since 1969, he's insured and sold airplanes at retail and distributor levels and taught aviation management for Southern Illinois University. Reach him at [email protected]

I graduated from Clemson University - then known as Clemson Cow College - in the unenlightened dark ages. Nobody ever accused Clemson of being overly sophisticated. The football coach chewed tobacco in public, and visiting dignitaries were taken on a tour of the cow barn. Maybe we weren't, as the song goes, big on social graces; but we were taught, even back then, that import tariffs are a bad thing.

I learned that there is no legitimate economic justification for tariffs on imports. There are arguments, but they have long since been proven wrong.

Now (oh, the sadness of it all) Bush has passed import tariffs on steel and there is no public uproar. How long does it take to educate a country?

It's not as if we don't know better. Both USA TODAY and The Wall Street Journal - widely divergent publications, to say the least - lament these tariffs. Indeed, in reference to the tariffs, WSJ says, "No one pretends an economic rationale exists…This is President Bush's worst day so far."

Bush says the tariffs will last only three years. Sure they will! The income tax was supposed to be temporary, too. Anyone who believes that three-year stuff should look at the history of our sugar tariff, which, with no discernable justification, has penalized the many for the sake of the very few for, lo, these many decades.

USA TODAY says the tariff will cost each American family $200 per year. That is, of course, a best guess. Business and consumers will react to minimize the extra cost, of course, just as we all react to other taxes. (Take a close look at a few service stations. The canopy - the roof that keeps the rain off of those buying gas - does not actually connect with the rest of the building. The reason? Simple. The guvmint, in its infinite wisdom, has declared that the separate canopy can be depreciated much faster than the building itself. Business owners react logically to minimize their taxes.)

Some ask me, "Ralph, wadda you care? You're not in the steel business." Yes, I am, and so are you. We both sell to people who buy steel in many forms. To the extent that their costs go up, they will have less money to spend on your products and mine.

I know Greenspan says we're in the recovery phase, but our economy can ill afford extra costs right now. FORTUNE (Feb. 18, 2002) reports that increased costs caused by the 9/11 attacks will amount to $151 billion per year! $151 billion! Per year! G. Gordon Liddy, when he isn't bragging about his guns and his manhood, would call that $151 thousand million per year. Lord knows we don't need steel tariffs on top of that burden.

Another thing we don't need right now is the anger of our friends in other countries. Even Tony Blair is riled up and threatening retaliatory tariffs, as are Asia and the European Union.

Dr. Hugh Macaulay, a Who's Who economist who has taught all over the world, says that laws like this happen because the few people who want the laws work harder to get them passed than the rest of us work to defeat them. He is right; and I for one feel guilty about my lack of effort.
In Pearl Buck's great book, The Good Earth, Wang Lung cries out in anguished frustration, "Is there to be no end to the spending of money in this house?"

We - all of us - need to ask that question of the guvmint. Often.