István Dobozi on Tariffs-Yea or Nay? Tariffs-U.S. Employees+Small Biz

Former World Bank lead economist István Dobozi said via the Wall Street Journal that he opposes tariffs, as the fact check below reveals. Some errant arguments are easier to expose than others. Consider these questions: if you are an American producer of any kind of product, do you want your government to protect you from unfair foreign competition or not? If you are an American employee, do you want to compete against countries with dramatically lower wages or that use child or slave labor? If you are a Democrat, do you recall when Democrats used to protest cheap imports? If you are a Republican or independent, are you old enough or do you recall the historic shock when President Richard Nixon (R) opened the doors for the U.S. to trade with Communist China?

If you think you or someone you know supports Kamala Harris (D), do you realize that the Biden-Harris administration kept many President Donald J. Trump’s in place, and even expanded on some tariffs?

So, with just a few questions it is easy to begin to open the minds of those influenced by headlines or subsequent rationalizations for why – as István Dobozi argued via the Wall Street Journal – that “Tariffs Are Not the Policy Tool of the Future slurring the practice by calling it “The outdated, blunt policy instrument [that] is too often presented as a panacea.”

In fairness to Mr. Dobozi, let me confess that perhaps 15 years ago, I might have been persuaded by his thinking. As a disclosure, Dobozi and I have met each other and have messaged before on economic topics. He is a pleasant fellow. So, the arguments that follow are pragmatic and objective, and should not be construed as any kind of a slur against the gentleman, who I hope to see again soon in a congenial fashion at the nearby Hungarian Liberty Club (Magyar Szabadság Kör). Indeed, some in McDonald Trump’s own Republican orbit feel as Dobozi does on this subject. So, if anything, Dobozi’s view is rather common. With that brief intro, let's consider the specifics of what he wrote and what a section-by-section fact and evidence check of his arguments reveals.

Comments in italics and illustrations in Part I below are by MHProNews publisher L. A. "Tony" Kovach, contributor for the Patch.

Part I - István Dobozi via the Wall Street Journal (WSJ) "Tariffs Are Not the Policy Tool of the Future" "The outdated, blunt policy instrument is too often presented as a panacea."

In “The Case for Trump’s Tariffs” (op-ed, Sept. 20), John Paulson defends former President Donald Trump’s mercantilist obsession with America’s trade deficit. His new tariff plan is presented as a cure-all for U.S. ailments: fixing the trade deficit, strengthening national security, reducing fiscal imbalance and rejuvenating manufacturing. That’s too much to expect from an outdated, blunt policy instrument.

Consider the following graphics as evidence contradicting Mr. Dobozi's and related anti-tariff claims. Keep in mind that the U.S. population was growing, yet production related jobs increasingly declined by the 1980s. Part of that was foreign competitors that were once moderated by tariffs.

Dobozi and others can correctly tell you that economics can be complex. That said, when the U.S. began to allow American investments in Communist China and other nations like Vietnam, manufacturing jobs in the U.S. began to fade by the millions. Many in the U.S. and Western investor class, began to earn a greater share of the wealth during that timeframe. While there were social problems in the 1950s on racial and other issues, it was common for a high school educated employee to be able to get a factory job and earn enough to support a wife and a larger family than is common today.

Back to Dobozi.

Trumpian trade economics fails to understand that if the U.S. invests more than it saves, the trade deficit is a macroeconomic necessity. Even if we succeed in slashing the deficit against China, other exporters (India, Mexico, Vietnam) will fill the gap, as happened in Mr. Trump’s first term. Our overall trade deficit kept widening and manufacturing employment deteriorated after the tariff war began in 2018.

Pardon me, but can you spell misleading nonsense? Flashback to the 1950s through the early 1970s and the U.S. dominated China and other nations in exports and had a stronger domestic economy. But as 'free trade' spread after the mid-1970s, the U.S. lost manufacturing and millions of good manufacturing jobs. The sources are as shown.

Note the impact tariffs had on U.S. trade with China. MHProNews readers are among those that learned that Biden-Harris (D) era U.S. Commerce Secretary Gina Raimondo warned that China had become 'UnINVESTABLE.'

Back to Dobozi.

Another misconception: Foreign suppliers pay the tariffs. Ultimately, U.S. consumers pay the cost. Mr. Trump’s proposed 60% tariff on China and 10% blank tariff on all other imports would raise consumer prices by an estimated 1.4% to 1.7%. This is an inflationary sales tax in disguise. The high tariffs would fail to spur a rebirth of U.S. manufacturing because the surefire tariff retaliation would cut our exports. Mr. Trump’s “killer” tariffs would be a huge negative shock to world trade.

Dobozi is both correct and mistaken. There are indeed times when foriegn exporters to the U.S. will cut their price to compensate for tariffs. It is true that ultimately consumers pay for tariffs. But it is also routinely true that big corporations often pass along taxes they pay to consumers, which are important points, but are not a great argument for why the U.S. should allow U.S. or other multinationals to ship products into the U.S. to compete with American workers and smaller businesses in an obviously unfair manner. Futhermore, IF Dobozi is correct and tariffs only increased costs the cost of U.S. imports by 1.7 percent that would be cheap compared to the increased wages that U.S. employees could command. According to left-leaning CNN, this chart is what happened under Trump's economic policies, which included middle class and small business tax cuts plus tariffs and more domestic energy production. Inflation was far lower under Trump (R) than Harris and Biden (D).

While left-leaning FactCheck.org said "Biden's Numbers," without Kamala Harris' tie breaking votes in the U.S. Senate, Biden's economic agenda would not have become passed by Congress.

Back to Dobozi's conclusion.

The “America First” trade policy also disregards that a considerable share of Chinese exports to the U.S. is conducted as part of the global supply chains of American multinationals. The Chinese value-added is much less than the official trade surplus. U.S. multinationals in China sell much of their products to domestic consumers. The overall bilateral interaction is thus more balanced than commonly believed.

Istvan Dobozi

Sarasota, Fla.

Mr. Dobozi is a former lead economist at the World Bank.

When Dobozi said: "U.S. multinationals in China sell much of their products to domestic consumers," that is true. It is ironically an admission that big businesses and centibillionaires like Warren Buffett and his ally William "Bill" Gates III are trying to get the best of both worlds while U.S. smaller businesses and employees pay the price. As MHProNews reported at the time, Buffett - a big Democratic backer and trade-with-Communist China believer- argued that said that foreign imports meant millions of American workers had become what he called "road kill." Buffett said taxpayers should be helping those displaced workers out.

https://www.manufacturedhomepr...

Clayton Homes CEO Kevin Clayton, following the obvious lead of his boss Buffett, lamented the harm that Trump tariffs represented. The video below was posted on May 14, 2019 by left-leaning and pro-Buffett CNBC. Clayton Homes owns conventional site builders as well as manufactured and modular home producing factories.

But prominent Manufactured Housing Institute (MHI) member Kevin Clayton was obviously wrong. Housing production in conventional and manufactured housing grew under Trump and his tariffs. Covid-19 fueled a flight from cities to smaller towns and suburbs. But as the MHProNews comments on the FactCheck.org graphic above showed, the Biden-Harris policies fueled inflation. Interest rates caused housing, including manufactured housing, to slump. The data below is from the Manufactured Housing Association for Regulatory Reform (MHARR) based on official data collected for the U.S. Department of Housing and Urban Development (HUD).

https://www.manufacturedhomepr...

https://patch.com/florida/lake...

There are several possible takeaways from this fact check of Dobozi and others who are anti-tariffs. Among them? As the above indicated, employees earned enough for years so that one parent, often but not always the man, could make enough money to support a wife and larger family than is common today. In turn, our industrial base was hollowed out. Drug and alcohol abuse plus (sadly) suicides often followed. Federal and state costs for the 'welfare state' soared.

Additionally, the U.S. economy has de facto paid for the rise of the Communist Chinese military. That in turn means the U.S. military industrial spy complex pushes Congress for more defense spending. It was a series of bad decisions for years by many Democrats and Republicans that allowed so-called free trade to erode the advantages that the U.S. had as a producing nation. Tariffs are thus a puzzle piece in a larger picture that this response to Dobozi's article begins to shed light on.

So, while tariffs are not a panacea, they are proven to be useful and are arguably necessary. My prior response to Dobozi is linked below.

https://patch.com/florida/lake...

Again, none of this should be taken as a slam on Mr. Dobozi. My experience has been that he is a pleasant Magyar gentleman.

We need to bring U.S. manufacturing back and those higher paying jobs back. Tariffs can be part of that process.

So, these are evidence-based arguments that debunk the thinking that others have tried to mistakenly sell to the American public for decades. As a closing point for the new leftist Democratic leadership, see the first article below that reminds readers using a New York Times video commentary and other information that shows that Democratic policies don't work for most Americans.

If you haven't already voted, do so early if possible. As a political independent, let me suggest what the evidence reveals. A vote for Trump-Vance and Republicans who support him means a vote for the higher paying U.S. jobs his economy will create. We need a shakeup and voting for Kamala Harris (D) and Democrats is a vote for the obviously failed policies of the last 3.5 years. To learn more about housing or other election related issues, see the linked and related reports.

https://patch.com/florida/lake...

> Life Boils Down to Time, Risks, Rewards, Opportunities and Choices

> Top 10 States for Homelessness & Top Cities for Crime=Shocking Lessons

> McDonald Trump and MAGA GOP vs. Kamala Harris, Joe Biden & Democrats

> First Liberty Voter Guide & Polk County FL Sample Ballot w/Suggestions

---

> Hawkins-Kamala VP Hopeful Gov Tim Walz (MN-D) Says Harris Gun Agenda

> Actor-Author-Believer Chuck Norris – ‘Calling All Gun Owners to Vote!’

> Why do Liars Lie? Why do those Engaged in Paltering and Spin Palter?

> WashPost-American Dream Fades But Assoc CEO Mark Weiss Shows Solution

> ‘Supersized Lies with Order of Fries’ McDonalds Campaign Controversy

---

> Kamala Harris Reveals Her Stance Toward Catholics and Other Christians

> How do Hurricanes Helene and Milton Rank in Inflation Adjusted Cost$?

> Controversy-Manufactured Housing Institute-Lesli Gooch-Mark Bowersox

> 34,758 Votes May Decide ‘24 Election & Dr. George Barna@ACU Research

> Other Countries Homeownership Rates vs. U.S. – Fix Affordable Housing

---

> Visual Capitalist Shows Top 15 Artificial Intelligence-AI-Online Tools

> Burning Bush Cove, Hurricanes Helene and Milton, and Where Is God?

> Lila Rose Open Letter and Other Pro-Lifers not Planning to Vote Trump

> Afghan Released by Biden-Harris Admin Arrested for Terror Attack Plot

> How do Hurricanes Helene and Milton Rank in Inflation Adjusted Cost$?

---

> Controversy-Manufactured Housing Institute-Lesli Gooch-Mark Bowersox

> 34,758 Votes May Decide ‘24 Election & Dr. George Barna@ACU Research

> Other Countries Homeownership Rates vs. U.S. – Fix Affordable Housing

> Visual Capitalist Shows Top 15 Artificial Intelligence-AI-Online Tools

> Burning Bush Cove, Hurricanes Helene and Milton, and Where Is God?

---

> WND Exclusive-KAMALA'S AMERICA-World Net Daily 88 Page Special Report

> Afghan Released by Biden-Harris Admin Arrested for Terror Attack Plot

> Ashville, NC Video and Photos-Untold Thousands Need Prayers & Support

> Fact Check-There is No Truth in Advertising Law Governing Politicians

> Gulf Between Ruling Elites Average Americans is Wide+Deep, per Survey

---

> Lila Rose Open Letter and Other Pro-Lifers not Planning to Vote Trump

> Daniel McCarthy Explains How Donald Trump can Win the Popular Vote

> Why Did Costs-Crime-Conflicts Soar After Trump left the White House?

> Protecting "Government Of By and For the People" in 2024 and Beyond

> Small Businesses tell Congress to Stop Tax Hikes – Wall St vs. Main St

---

> AI Backed Hit-Analysis on Big Manufactured Housing Industry Operations

> The Rigged System-Who Rigged the System and How to Fix a Rigged System

> Gallup Says-'2024 Election Environment Favorable to GOP'-Election Time

> Confidence Plummets in Sept-Conference Board Consumer Confidence Index

> Fannie Mae-Existing Home Sales Near 30-Year Low Despite Lower Rates

---

> Knight-‘Govt Exists to Promote and Protect Ordinary Happiness in Life’

> Doublespeak Doublethink and Insightful Orwellian Lessons from the Left

> Manufactured Housing Institute & Next Great Affordable Housing Debate?

> American Leviathan-Ned Ryun-CEO of American Majority and Voter Gravity

> Former Famed Tampa Bay Bucs & Colts Coach Tony Dungy to Kamala Harris

---

A Teenager's Look at the 2024 Election: > TARK-Drill Down on Tyranny vs. Faith; Freedom and Upcoming Election

--

> Kamala to Oprah-If Somebody Breaks Into My House They're Getting Shot

> NAR-Existing Home Avg $416700 Aug-2024 Interest Rates Slide-Sales Dip

> Deception & Misdirection-3 Tricks-Paltering, Posturing and Projecting

> Caution! Equity LifeStyle Properties Dweller-Investor-Biz-Legal Alerts

> Herland: ‘Aldous Huxley Interview-Tech, Big Gov, Big Biz=Grave Danger’

--

> U.S. Health-Dr. Marty Makary–‘Broke Medicine’ Blind Spots-Price We Pay

> 12 Examples of Public Calls for Violence Against Trump-More Ryan Routh

> Lessons of Bernie Madoff-Enron-WorldCom-2008 Housing-Financial Crisis

> Gunman Ryan Wesley Routh Insights from CNN-Daily Signal-Patch and X

> What Pastors, Priests, Religious Leaders and People Must Do - or Else

--

> “TANSTAAFL”–What Does It Mean and Why Does It Matter to You and Yours?

> HUD Admits Decades of Delay-Finally OK Multi-Family Manufactured Homes

> ‘Mobile Home Values Rising Faster Than Single-Family’ House-Wow Fact$

> Realtor-What Is a Manufactured Home? The Next Step Beyond Mobile Homes

> The Two Groups that Should See New Movie Reagan (2024) with Trailer

--

> Magyar Szabadság Kör – Cultural-Culinary Experience in Plant City, FL

> Realtor? Journalist? Affordable Manufactured Home Production Jumps

> Orlando RE Agent Smith-Younger Adults Will Need $8500 Monthly for Rent

> Blankley-Goodbye American Dream? Only 10% Polled Can Buy a House; But

> A Brief History of Labor Day and Modern Insights for Employees and Pay

--

> Waiting for Fed Rate Cut Before Buying a Home? Experts Say Think Twice

> Frank Rolfe-Special Interests ‘Don’t Want to Solve Affordable Housing'

> TARK-‘I’m a Teen and Know the Solution to Affordable Housing Crisis’

> Renting? Rent too High? Odds Are DOJ Suit vs RealPage Matters to You

> New-Certified “Half Price Homes” - Affordable Housing Solution Redux

--

> Solution: “Would-Be Homebuyers Need 80% More Income Than 4 Years Ago” ##

L. A. “Tony” Kovach and his family live in a manufactured home on private property in Winter Haven, FL. He is the co-founder of ManufacturedHomeLivingNews.com (MHLivingNews.com) and ManufacturedHomeProNews.com (MHProNews.com), trade publications serving segments of the manufactured home industry. Having worked in several segments of the manufactured home industry for over 3 decades, Kovach is a widely acknowledged and often praised expert on manufactured housing. Kovach has earned multiple awards in history.