Tag Archives: Ukraine

The Ukraine war could go for years. Don’t make a famine.

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Russia is a collapsing, corrupt state with no meaningful elections. It is also the biggest exporter of food, fertilizer, gas, and oil. Nearly 2 years ago, it invaded Ukraine, another collapsing, corrupt, food-exporting state with suspended elections.

Both countries are in the midst of demographic collapse, with Ukraine worse off. Ukraine was invaded though, and thus has the better claim to our support. Then again Russia has atomic bombs. It’s also the largest exporter of wheat (or was), while Ukraine is only the 5th largest (or was before the war). The other three big exporters are the US, Canada, and France. They have benefitted financially, but don’t have near enough output to make up for lost Russian and Ukrainian production.

Ukraine’s grain terminals in flames, Odessa..

Food and energy prices have gone up, world wide, and will probably continue to rise as the war stretches on. This could lead to a global famine and mass starvation, particularly in the poorest areas of Africa, the Mid East, and India. Unfortunately, the war is popular and patriotic, in Europe, Russia, Ukraine, and the US. It’s good business for our armaments industry, and for our recent mega-farmers (like Bill Gates). Also, for our political and spy class. They spend with little government oversight, and just recently misplaced $16 billion. Surely some of that lost money snuck back to the CIA and our politicians’ pockets. We’d have oversight, but “there’s a war on.”

As wars go, the death toll is low, a total of 354,000 dead and injured on both sides, as revealed by recently leaked documents. This is a small fraction of the countries population. Russia has lost 223,000 soldiers killed or wounded, 0.2% of the population, while the Ukrainians had lost 131,000. That’s 0.3%, many of them civilians. The death rate in the two countries during this time was 3.1 million people, 1.8% of the total, mostly from heart disease, accidents, and alcoholism.

The Ukrainian population. Lots of retirees, few kids, very few of military age. This is a disaster, not a country.

Even more destructive to Russia and Ukraine is the demographic collapse. The fertility rate in Russia is 1.5 child per woman, up fro 1.2 in 2000. For a stable population at low infant death, you need about 2.1 children per woman. Russia has had this low rate for a generation, at least 30 years. The net result is that we can expect that Russia’s population will drop by a third or so over the next generation, about 50 million. In Ukraine the fertility rate is even lower, 1.21 per woman, up from 1.1. It’s been this way for 30 years, the equivalent of killing off 1/2 of the population. Aside from leaving the countries full of old people, with no one to do the work, the demographic collapse is producing a cultural shift that virtually guarantees the breakup of Ukraine and the Russian federation. Europe also has this problem, but they have immigration, and that helps a little. Russia has no immigration, and recently resorted to kidnapping Ukrainian children.

The loss of Russian and Ukrainian exports means famine for the poor importers and food inflation for all.

The coming food and energy shortage is likely to lead to mass migration, I expect. Europe has stopped taking delivery of Russian food and energy, in solidarity with Ukraine. Meanwhile Russia has been destroying Ukrainian fields and food infrastructure. Russia ruined a dam last month, flooding Ukraine’s fields, and yesterday destroyed the grain terminals at the port of Odessa,. This was tit-for-tat since Ukraine destroyed a key bridge, and Crimea’s irrigation canal. What’s more, evidence suggests that Ukraine blew up the Nord Stream pipeline — a key source of finance for Russia and Germany. This sort of tit-for-tat escalated to WWI, fueled by a belief, on both sides, that they would win “decisively and quickly.”

The result of WWI is that Germany was the biggest loser, losing men and land, and suffering a killing famine in 1916. It militarized to prevent it happening again, leading to WWII. Germany is the biggest loser of this war, I’d say, aside from Ukraine. I fear it will militarize. Russia invaded Ukraine but claims a need to militarize. Biden’s promise that Ukraine’s will join NATO is a threat to Russia, as is our delivery of F16s, missiles and cluster bombs. We are killing Russians, and Putin doesn’t like it. Add to this, that Ukraine’s claim for independence rests mostly on its Nazi collaboration. For the good of everyone, maybe we can stop adding gasoline to this fire.

Ukraine deserves our support, I think, but that support need not go beyond small-ish arms, energy deliveries, and tariffs on Russian goods. I think we should Ukraine and Russia export food and energy. Even without WWIII, a world famine and a military Germany does no one any good.

Robert Buxbaum, July 20, 2023. When I was a teen, it was a given that war was bad. Now, for some reason, the kids are in for war, especially the more liberal classes. I find this absolutely bizarre.

China won’t invade Taiwan, perhaps Vietnam

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For 2000 years Chinese rulers have either fixed the problems caused by their predecessors, or become the absolute ruler who brings new problems and a war. Eighteen times over the last 2000 years, the absolute ruler has chosen is to invade Vietnam. Chairman Xi Jinping took full power over China five years ago, and as I predicted then, purged the party of all other competent leaders, including his predecessor, Hu. He now has to do something, and that’s typically a war. Xi talks like he’d like to invade Taiwan, but I believe he’ll invade Vietnam instead, as so many others did before him. Taiwan (Formosa) is separated from mainland China by 100 miles of open sea. There’s been only two successful, modern invasions; by the Qing Chinese in 1683 with the help of the Dutch fleet, and in 1895 by Japan against the 5 month old Republic of Taiwan. Vietnam is much easer to invade: you just have to walk in.

Chiang KaiShek with Roosevelt and Churchill. He took power after WWII.Taiwan is now a Republic

Here’s my brief summary of 60 years of cyclical Chinese history: In the last decade of his life, 1966-76, Mao Zedung brought a horrible cultural revolution, killing 100 million or so by violence and famine, targeting anyone who might disagree with him. He was followed by Hua Kuofeng, Hu Yaobang, and Zhao Ziyang. They removed “the Gang of Four” and brought reform, toleration, and some rapprochement with the west. Hu also returned some autonomy to Tibet. Deng Xiaoping followed, put Zhao under house arrest, removed Hua and Hu (only recently buried), absorbed Tibet, invaded Vietnam, instituted a brutal on-child policy with, forced abortions and sterilizations, and put down the Tiananmen uprising 1989 -an uprising caused by the removal of Hu. Deng was followed by Jiang Zemin and Hu Jintao who exited Vietnam, lightened the one-child policy, and brought back some measure of freedom. This lead to Xi Jinping who appears to be in the mold of Mao and Deng. He’s removed Hu publicly during a communist party meeting, has taken absolute control, arrested China’s business innovators, and (likely) caused a pandemic by unsafe research at the Wuhan bio-research facility. His response to the pandemic is worthy of Mao: he welded people into their homes. Xi now needs a war to unify the country, and talks like he’ll invade Taiwan. Xi might do it; he has increased military spending by 2.5 times, to double that of the EU (equal to US spending). His army is likely to be used somewhere soon. But where?

At first glance, it makes some sense to think he’ll invade Taiwan. He has the same justification as Deng had for Vietnam, “to punish the wayward province.” Taiwan is small, 23 million people, and very rich (GDP = $1.3T, 10-15% of China). It’s especially rich in high-tech areas that Xi seems to want, and China ruled the island (Formosa) for 212 years between 1683 and its brief independence in 1895. I expect that Xi will invade Vietnam though, for many of the same reasons that Deng did: it’s easier, and the invasion won’t destroy US trade. Vietnam will not be super easy to conquer, of course, Putin’s invasion of Ukraine looks like it will go on for years, but Xi has 100 million men of military age. Driving these men into Vietnam is a lot easier than an amphibious invasion. Vietnam now, as then, has few friends -perhaps only India -while Taiwan has many (The US and Japan, primarily), and they have naval breakwaters that would make an amphibious landing difficult. Vietnam is only about half as rich as Taiwan (GDP = $650 B), but it has two things China needs more than technology: oil and food.

The Japanese invasion of independent Taiwan, The Republic of Formosa, in 1895. It took 5 months despite lopsided advantages. Plus 7 years to pacify the population.

Japan’s invasion of the Republic of Formosa in 1895 would have to be the model for a Chinese invasion today, assuming that’s the route Xi would take. Japan used a small force of 20,000 highly trained men, and a surprise landing at two sites. The formosan army of 75,000 was hardly armed, but it still took the Japanese 5 months to defeat them. It took another 7 years to pacify the population. Taiwan today is a lot better prepared than it was, with modern missiles and drones, a well-trained army of 500,000, and an active navy. Japan, Philippines, and the US would likely try to resupply Taiwan, and would have to be blockaded to prevent delivery. This is not so easy, since the nearest Japanese island is closer to Taiwan than Taiwan is to mainland China, and the Philippines is not far either. Then there are the sanctions that would follow an invasion of Taiwan, but not an invasion of Vietnam: the freezing of assets and the closing of markets. Susch sanctions have been tough on Russia but they would be devastating to China since China imports most of its oil and half of its food, much of it by sea. Whatever Xi gets from invading Taiwan will not match these losses, and I think Xi know it.

China’s new military bases are located around Vietnam, not around Taiwan

I suspect that Xi has already concluded that Vietnam is the smart place to invade. Supporting this view is a look at his preparations. Xi has not built the landing fleet that he’d need for Taiwan, but has instead militarized Hainan Island, plus four other, newly constructed, illegal islands in the South China Sea. These islands surround Vietnam, and are well suited to cut off the country from western aid. They are too far south to be effective in an action against Taiwan. You can tell a lot about what a person will do from what he has done, and what Xi has done is to prepare for an invasion of Vietnam.

Robert Buxbaum, April 27, 2023.

Germany is the biggest loser in a long Ukraine war

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Early in the Ukraine War with Russia, Poland sent 200 T-72 battle tanks to Ukraine. Most other NATO members joined in, sending tanks, missiles, guns, supplies and technology. Germany sent nothing and have continued to avoid helping Ukraine as much as possible while the war dragged on for a year. Germany seems to have hoped for a quick Russian victory leading to a quick return to the pre-war, state of affairs. That’s not likely. Even early on, the war looked like a slow, long slog. Reluctantly, this month, Germany promised to send 18 Leopard tanks to Ukraine, requesting as replacements, mothballed tanks from Switzerland.

Germany is currently the 4th largest economy in the world, just behind Japan, and ahead of India (for now). They also have the 3rd oldest population. Their place as the leading economic and political power in Europe rests on a close relationship with Russia that is fading, bringing Russian goods west and manufacturing with them. Before the war, Germany imported most of its oil and 65% of its natural gas from Russia. Much of the gas came via two direct pipelines, Nord Stream, that bypassed the rest of Europe. Well into the war, while the rest of Europe disengaged, Germany is still buying from Russia and funneling it west: steel, aluminum, titanium, ammonia and platinum. Germany is still buying some Russian natural gas by way of Poland. The German economy is based on turning these materials into cars, high tech machines, and chemicals for export to the US, the EU, and China. Despite the very old population, Germany counts on cheap labor from low wage EU nations. These transient, long term. workers do not get citizenship or retirement benefits. The current war has presented Germany with more potential workers, Ukrainian refugees, but far fewer Russian supplies. The German economy is shrinking, and so far, the Ukrainian refugees have been mostly left unemployed.

Ex German Chancellor, Gerhard Schroeder, with Putin. He’s now head of Nordstream and Rosneft.

German industrial production is down by about 4% this year leaving its GPD at about $4T/year, about where it was in 2018. The US economy and the rest of Europe has grown. For an explanation, consider Germany’s ex-chancellor, Gerhard Schroeder, shown at left with Putin. Schroder remains a leader in the ruling SDP party, the party of Ms Merkel and of the current chancellor. He is also the chairman of the board for Nord Stream AG and of Rosneft, (Russian aerospace). He also sits on the board for Gasprom (Russia’s energy conglomerate), Rothschild, a prominent International bank, and is chairman of the board of the Hannover 96 football club. He is symbolic of Germany’s attachment to Putin and Russia. But the rest of the EU, along with the rest of the developed world, has come to hate Putin and Russia (they’re not too fond of Rothchild either). Europe is unlikely to tolerate Germany’s Russian imports, including titanium (65% of Airbus titanium comes from Russia) or natural gas. Germany has asked for a titanium exception (and been denied). What’s more, three of the four Nord Stream pipelines have been blown up (by whom?) leaving Germany to buy natural gas from its NATO allies: Norway, Britain, France Holland, and the US. Gas purchases are expensive for Germany while helping its NATO neighbors — Germany has asked to be subsidized for energy too (unlikely, imho). It has also restarted old coal-burning power plants, an insult to the EU given how hard Germany pushed them on climate change.

Germany is now near recession. Much of Europe is close, but Germany is worse-off since they are buying from the rest.

Percent of population over 65, CIA Factbook.

Much of the EU can sell gas and food to Germany, and Russia can export to China, India, and Iran. German inflation averaged 8.5% last year (9.2% in January). That is not hyperinflation, but a shock for a country that’s averaged 1% inflation over the last 25 years. US inflation, by comparison was 7.5% last year — due to excess spending by the Democrats (imho), the so- called “inflation reduction act,” but at least the US economy grew, along with the US population. It seems to me that, without Russian supplies, Germany will continue to slip versus the world and versus the EU.

Excess mortality for European countries has been very high for the last 6 months, especially in Germany. Death rates are up by 25% or so. Much of it is heart-related. Perhaps it’s COVID, or long COVID, or air pollution, or vaccines, or depression.

The German population is dying too. They too among the highest percent population over 65, see map. The death rate has spiked 25% over the last 6 months, too. Europe and much of the EU saw similar spikes earlier in the pandemic, partially from COVID, the rest is alcoholism, drugs, the vaccine, pollution, or a psycho-somatic response to isolation and the war. Sweden has largely avoided these problems so far.

Germany has been propping up its inefficient industries with low cost loans. The idea, presumably, is that things will go back to normal soon, and the companies will make good. So far, the war goes on, and the loans discourage competition and modernization. It becomes ever more likely that these inefficient German companies will default. If so, they could take down their lenders as happened in Japan in the 90s, and as happened to Lehman Bros. in the US. The same seems likely for China.

It becomes ever more likely that these inefficient German companies will default.

Even if the war ended tomorrow, it’s not clear that Germany could go back to its pre-war status. The blown Nord Stream pipelines will need a year or more to repair. And may never restart, as sanctions might remain long after the fighting ends, as with Cuba or North Korea. Russia seems to have recognized this possibility, and has begun sending titanium, gas, and oil elsewhere, mostly to Iran, India, and China. Iran has become a major customer of Russian aluminum, and food, and is a major supplier of drones and consumer goods to Russia. In the last two years, the Iranian GDP has doubled to about $2T/year. It is now nearly half the size of Germany’s GDP and growing while Germany shrinks.

Russia’s trade with India and China has grown too. They are working to improve the Trans-Iranian railroad that would allow easy shipments from Russia to India and China via the port of Tehran. The first direct shipment of this sort was completed in July 2022– Caspian Sea containers to an Iranian train to ship to India and China. If the war goes on, Iran, India, and China will benefit at the expense of Germany, it seems. India, in particular. India’s economy is already approaching the size of Germany’s, and will probably pass it with the help of Russia’s energy and raw materials. Meanwhile, Germany is left with an aging population and aging industries; with few suppliers, and no obvious competitive advantages. Europe is almost as badly positioned, but they can still sell to Germany. As for Ukraine, it seems to be doing well, despite the war — or because of it. They still grow and export food and energy, and they are holding their own in the war, for now. There is destruction in the east, but Ukraine might come out stronger, as happened with South Korea and Vietnam. Russia too seems to have found new customers and might come out OK. It is hard to see how Germany comes out well. This, at least, is how I see things today.

Robert Buxbaum, March 8, 2023.

Ukraine looks like Vietnam or the beginnings of WWI

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The press and our Russian experts claim we’re helping in Ukraine, protecting it from a Russian invasion. I suspect they are wrong, and that our help and protection will prove to be as deadly to all as in the Vietnam war. I’m also uncomfortable with their presentation their framing of Putin as an out of touch autocrat. Putin has popular support, and acts with a strong sense of history, as I see it, just not our version of history. In the Russian version, it was Russia that stopped the Nazis — of Germany and Ukraine. We are not the heroes of WWII in their telling; I doubt we’ll be the heroes of this conflict either.

We have a habit of seeing ourselves as saving heroes as we enter other people’s conflicts. It is how we got into Vietnam, to save the South from the North. It’s also how Europe got into WWI: Russia was saving Serbia, Germany was saving Austria, etc (see cartoon below). We meddle our way, and leave much later than we planned. The result, as in Vietnam and Afghanistan is far more death and destruction than if we’d minded our own business. And US war-dead too. In Vietnam 58,000 US deaths. In Afghanistan 2,400 US dead. and no obvious accomplishment. As Henry Kissinger famously commented: “It’s dangerous to be America’s enemy, but deadly to be America’s friend.”

European aggression in WWII started with the good intention of preventing aggression. It got out of hand, as I fear our good intentions will in Ukraine.

The US troops we’ve sent to Ukraine are not called soldiers. They are “fighting advisors” sent to help the Ukrainians use our weapons. In WWI and Vietnam, fighting advisors are called invaders; it’s how we got drawn into Vietnam. The Russians claimed to send advisors when they entered the Crimea and later the Dundas. We called it an invasion. We can’t be that blind to our own words. Sooner or later, the advisors will start killing each other– something we’ll call an unprovoked attack. Our high tech aid including anti-tank missiles are reported to have killed some 10,000 Russians so far. We don’t seem to think the Russians will mind, or that they’ll give up as the body count mounts. In Vietnam, the more we killed with our high-tech weapons, the more the Vietnamese on both sides called us the villains, and the more Vietnamese joined the fight against us. That’s the future I fear for Ukraine, or worse. The conflict in WWI spiraled quickly beyond the borders of Serbia to include the whole world, and continued through WWII.

Our approach to diplomacy is counterproductive too, in my opinion, and similar to Vietnam too. We call Putin a terrorist, a madman and a narcissist, and then we begin talks with him to end the war. Biden has asked to have Putin removed by assassination.Does he think this will help, or if Putin is removed his successor will be a friend of the US? We demonized Ho Chi Minh, and propped up our favored, corrupt leaders. Minh was popular, as is Putin, and both have valid reasons for opposing us. Putin worries about the expansion of NATO. It’s not an illegitimate worry given Russian history of repeated invasions from the west.

Our desire to remove Russian leadership is a long-standing mistake. It does not lead to peace, or good negotiation, nor even peaceful co-existence.

Russia has been invaded many times. US schools mention Napoleon’s invasion in 1812 and the German’s in 1941, but there are more. They were invaded by the Germans in WWI too, and by the Ukrainian Cossacks in the days of Khmelnytsky, 1646-57. Before that the Polish Lithuanians, 1609-1618, the Swedes, 1701-1709, and in the early days, it was Tartars, Mongols, who invaded and ruled Russia from about 1225 til they joined with the Russian Tzars about 1650. Add to that, our help in the war of the Whites vs the Reds (1917-23) that produced Ukrainian independence — I talk about the relevance here. With a history like that, Russia has every reason to worry about NATO expansion. We should be cognizant of this and stop calling Putin a madman. Let’s accept the Russian version of history, and the sitting ruler of Russia.

Some cite the Budapest memorandum that lead to the removal of “Ukrainian” nuclear weapons –– read it here. It’s short, only 1 page, and deliberately vague. it was signed by Putin’s predecessor, Boris Yeltsin, for the Russian Federation, along with representatives for Ukraine, The US, and The UK. The missiles were not Ukrainian, they were Soviet, and pointed at us. As a result of that agreement, they were dismantled and moved into Russia. There is no sense that this is an invitation for us to protect Ukraine against Russia. The co-signers sort-of agree to protect Ukraine from outsiders (Germany, Turkey,..?), but that’s not clear. We commit ourselves to peace in the region, and can claim that Russia violated the peace first, but there’s no invitation for us to violate it second. Until recently, the UK provided no military aid. China and most of the EU still trades with Russia; if they see a villainy, it’s not enough to stop trade.

Robert McNamara was Secretary of Defense under Kennedy and Johnson, and a key “Whiz Kid” pushing for war in Vietnam. Years later, he decided Vietnam was a mistake. A sad cartoon: the veterans are walking past the grave monument for the 58,000 US dead. I worry we’ll have a similar cartoon after this war.

In my opinion, our best course is to reduce our military aid to providing only basics: bullets, blankets, food… We should reopen discussions with Putin, not demonize him, or try to remove him. Ukraine will likely fight on even without our high-tech weapons. Perhaps they’ll buy from Europe, or from independent dealers. The death rate on both sides will be lower and peace will come quicker without us. Crimea might remain Ukrainian or Russian, but that will not be our decision. We’ve done enough damage for now. It took many years after the end of the Vietnam war for the instigators admit is was a mistake.

Robert Buxbaum April 3, 2022. Much of my thinking about Vietnam comes from Francis Fitzgerald’s wonderful book “Fire in the Lake”. I see it all happening again here. Also worth reading is this 2014 letter by Henry Kissinger about how to negotiate a peace: “Damning Putin is not a foreign policy; it’s an alibi for the lack of one.” It’s a nice insight. He seems to understand diplomacy about as well as anyone.

The claim that Ukrainians are Nazis is also Ukraine’s claim to statehood.

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Recently Putin claimed he was going into Ukraine to fight Nazis. Twitter makes fun of this, but also shows many pictures of these Nazis. Under the hashtag #AzovBattalion, you’ll see many pictures of white boys with swastikas and Ukraine flags (see below). Perhaps these pictures are just Russian propaganda: According to our media there are no Nazis to speak of, and besides, the president of Ukraine is a Jew. Still, the pictures look real, and based on Ukraine history, there is quite a bit reason to think they are not an aberration. Still, to the extent that they represent Ukraine, these individuals are a major basis of Ukraine’s claim for independence. They are also a good reason to leave Ukraine out of NATO, IMHO.

Let’s go back to the late days of the Tartars and the early days of the Cossacks, about 1600. There is a painting, below depicting Cossacks of those days writing a letter to The Sultan (original in the Kharkov museum). They do not seem the most savory of people, but they do seem independent and egalitarian. The letter is not written by a noble, but by a committee of pirates, and not everyone is happy about it.

Zaporozhian Cossacks write a letter to the sultan. These are the people who Putin claims should be loyal to Russia, but they have a long history of behaving otherwise. I like the scribe. A couple of people at left seem unhappy.

From 1250 to the mid 1700s, Southern Ukraine was ruled, to a greater or lesser extent, by the Crimean Tartars, a group of horse-riding Mongols who nominally served the great Khan. Moscow paid dues to them, and in 1571 the Tartar ruler,  Devlet I Giray burnt Moscow to collect his dues. The early Cossacks were Black-sea pirates, and enemies of the Tartars. Around 1600, the Cossacks and Tartars realized they had a lot in common (alcoholism, pederasty…) and formed an alliance. Mainly this was against the Poles and Jews. A famous result of this alliance was the Khmelnytsky Uprising (about 1650). Khmelnytsky was the “Hetman” (Head man?), the elected, temporary ruler for the uprising. He has become a symbol of Ukrainian independence, but he was also a brutal murderer of virtually all the Jews and Catholics. Today, he graces Ukraine’s $5 bill, and sits atop a statue in Kyiv’s central square. This elevation of Khmelnytsky is no small insult to Jews, Catholics, and civilization.

Ukrainian Republic passport, 1919.

 In 1654, via the Pereyaslav Agreement, Khmelnytsky’s Tartar-Cossacks formed an allegiance with the Tsar while retaining autonomy in Ukraine. This autonomy eroded over the years, and ended with Bolshevik rule in the early 20th century. After WWI, Ukrainians briefly tried for independence, forming the Ukraine Peoples Republic and the Ukraine Democratic republic, from 1917 to 1921. The head of the Republic was called hetman, an elected leader but also a throwback to a mass-murderer.

Stalin punished the Cossack remnant before WWIi, and when the Germans invaded in 1939, many of the remaining Ukrainians supported the Nazi invasion, and provided some of the most brutal murders of Jews; the murderers of Baba Year, for example. Putin recalls this collaboration when he calls the Ukrainians Nazis, and I suspect that he’s more right than our press will admit. These #azovbattalion pictures don’t look faked. On the other hand, the autonomy of the Ukrainians and Cossacks, and their attempts at independence provide historical backing for Ukraine’s claim to independence. Putting this another way, the more you accept that Ukraine is full of Nazi sympathizers, the more you should accept them as a distinct society from Russia.

Ukrainians of the Azov Battalion with a statue of Khmelnytsky, or some other murderer.

As an idea of how the war might go, I should mention another group of Tartar-Cossacks. These were Moslems who operated between the Don and Volga Rivers in what is known as Chechnya. Chechnya fought Russia in a long, bloody, unsuccessful struggle, that is only recently ended. Russia may win in Ukraine, but it is not likely to win easily or cheaply if Chechnya is any model.

Robert Buxbaum, Mar. 2, 2022

In praise of tariffs

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In a previous post I noted that we could reduce global air pollution if we used import taxes (tariffs) to move manufacture to the US from China and other highly polluting countries. It strikes me that import tariffs can have other benefits too, they can keep US jobs in the US, provide needed taxes, and they’re a tool of foreign policy. We buy far more from China and Russia than they buy from us, and we get a fair amount of grief — especially from Russia. An appropriate-sized tariff should reduce US unemployment, help balance the US, and help clean the air while pushing Russia in an alternative to war-talk.

There is certainly such a thing as too high a tariff, but it seems to me we’re nowhere near that. Too high a tariff is only when it severely limits the value of our purchasing dollar. We can’t eat dollars, and want to be able to buy foreign products with them. Currently foreign stuff is so cheap thought, that what we import is most stuff we used to make at home — often stuff we still make to a small extent, like shoes, ties, and steel. An import tax can be bad when it causes other countries to stop buying from us, but that’s already happened. Except for a very few industries, Americans buy far more abroad than we sell. As a result, we have roughly 50% of Americans out of well-paying work, and on some form government assistance. Our government spends far more to care for us, and to police and feed the world than it could possibly take in, in taxes. It’s a financial imbalance that could be largely corrected if we bought more from US manufacturers who employ US workers who’d pay taxes and not draw unemployment. Work also benefits folks by developing, in them, skills and self-confidence.

Cartoon by Daryl Cagle. Now why is Russia a most favorable trade partner?

Cartoon by Daryl Cagle. Trade as foreign policy. Why is Russia a most favorable trade partner?

In a world without taxes or unemployment, and free of self-confidence issues, free trade might be ideal, but taxes and unemployment are a big part of US life. US taxes pay for US roads and provide for education and police. Taxes pay for the US army, and for the (free?) US healthcare. With all these tax burdens, it seems reasonable to me that foreign companies should pay at least 5-10% — the amount an American company would if the products were made here. Tariff rates could be adjusted for political reasons (cartoon), or environmental — to reduce air pollution. Regarding Russia, I find it bizarre that our president just repealed the Jackson Vanik tariff, thus giving Russia most favored trade status. We should (I’d think) reinstate the tax and ramp it up or down if Russia invades again or if they help us with Syria or Iran.

A history of US tariff rates. There is room to put higher tariffs on some products or some countries.

A history of US tariff rates. Higher rates on some products and some countries did not harm the US for most of our history.

For most of US history, the US had much higher tariffs than now, see chart. In 1900 it averaged 27.4% and rose to 50% on dutiable items. Our economy did OK in 1900. By 1960, tariffs had decreased to 7.3% on average (12% on duty-able) and the economy was still doing well. Now our average tariff is 1.3%, and essentially zero for most-favored nations, like Russia. Compare this to the 10% that New York applies to in-state sales, or the 6% Michigan applies, or the 5.5% that Russia applies to goods imported from the US. Why shouldn’t we collect at least as high a tax on products bought from the non-free, polluting world as we collect from US manufacturers.

Some say tariffs caused the Great Depression. Countries with lower tariffs saw the same depression. Besides the Smoot-Hawley was 60%, and I’s suggesting 5-10% like in 1960. Many countries today do fine today with higher tariffs than that.

Robert E. Buxbaum, March 25, 2014. Previous historical posts discussed the poor reviews of Lincoln’s Gettysburg address, and analyzed world war two in terms of mustaches. I’ve also compared military intervention to intervening in a divorce dispute. My previous economic post suggested that Detroit’s very high, living wage hurt the city by fostering unemployment.