Saturday, February 25, 2012

Top Films of 2011

I felt that I should distinguish what I think will be the winners in each respective Oscar category from what I believe were the best films of 2011. As we all know, the Academy is far from perfect. Hence bamboozling nominations of films like Extremely Loud and Incredibly Close
and War Horse over films like Drive and Win Win. I should add in a qualifier: this list is subject to change. I have not seen every movie from 2011, that's impossible. I haven't seen every movie up for Best Picture (I've seen most of them). This list is based on the most critically acclaimed films that I have seen. So, while the moniker may be "Top Films of 2011," it's really the "Top Films of 2011 I've Seen." But, that just sounds lame.

As I mentioned before, it being a weak year in terms of caliber of films, it's not surprising that my list, for the most part, includes Oscar nominees. However, there are a couple of notable differences I will explain after I present them to you:

5. Win Win
4. The Tree of Life
3. Beginners
2. The Descendants
1. The Artist

Two inclusions that may spark surprise are Win Win and Beginners.

Win Win is an independent film by Thomas McCarthy, the same exceptional director that made The Station Agent. It was a really well done, realist film (typical of McCarthy) with great performances from Paul Giamatti, Amy Ryan, and Bobby Cannavale, who rejoins McCarthy after also starring in The Station Agent. While it is up for a couple Independent Spirit Awards, for some reason it escaped the Academy. But, it was undoubtedly one of my favorites of the year and definitely worth seeing.

Beginners got a nod for Best Supporting Actor in Christopher Plummer, but, puzzlingly, that was it. I'm really not sure why. There has been a reluctance, in recent years, from the Academy to take romantic films seriously (as was the case with Blue Valentine last year). But I believe this film was far more exigent than the usual romantic film. Plummer was undoubtedly fantastic and well worthy of the Best Supporting Actor nomination. Ewan McGregor did what he had to do very well, but was not worthy of a nod. But, I do feel that Melanie Laurent was overlooked for Best Supporting Actress. It was a great performance by the French actress. Beginners can be looked at as this year's The Kids Are All Right, but it stands on its own. Mike Mills (director of Thumbsucker) did a great job and deserved more recognition for his work.

I would love to give reviews and more explanation as to my other 3 choices, but I feel the point is moot given all the talk surrounding those three great films. My hope is to review films more regularly, and in a somewhat timely manner in relation to their popular theatrical release.

What do you think of my top 5? Missing anything? What are your top films of 2011?

Oscar 2012 Predictions

It's been a long time since my last post, but what better time than the so-called "Super Bowl of Cinema," the 2012 Academy Awards. With my predictions for winners of the most notable categories, I am hoping to broaden the scope of what POK will be covering; going beyond the political and economical realm and into a more cultural blog. By covering not only issues of politics, but also of film, literary works, music, philosophy and other mediums, I hope to give a hardly objective viewpoint on today's culture.

So, without further ado, here are my predictions for this years major Academy Awards categories.

Best Original Screenplay: Midnight in Paris

Best Adapted Screenplay: Hugo

Best Cinematography: The Artist

Best Director: Michel Hazanavicius (The Artist)

Best Supporting Actress: Octavia Spencer (The Help)

Best Supporting Actor: Christopher Plummer (Beginners)

Best Actress: Viola Davis (The Help)

Best Actor: Jean Dujardin (The Artist)

Best Picture: The Artist


There you have it. We'll see how I do in a matter of hours. Please know that these are not necessarily my picks for each category, but how I can most objectively guess each winner to be.

I will shortly be posting my personal best films of 2011. It'll either be a top 5 or top 10. Depends on how tough it is. Shouldn't be too bad, considering the weakness of the field this year compared to last.

Would love to hear your thoughts on my picks or even what you think may be a big winner.

Sunday, August 7, 2011

S&P Doesn't Tells Us Anything We Didn't Know

All the hubbub this weekend has been about S&P's "surprising" decision to downgrade the United States' credit rating from triple-A to AA+ with a negative outlook. This resulted in both Republicans and Democrats coming out and declaring "I told you so!" Republicans claim they told us so because of excessive spending taken upon by this administration for the last 2+ years. And Democrats claim they told us so because of insistent Tea Party representatives and activists who brought us "to the brink of default." As if Washington would fail to turn an objectively truthful economic statement as powerful as a credit downgrade into political showboating!

Let's look at the facts of S&P's downgrade justification, as shown in their report (available on their website at www.standardandpoors.com) and the crazed reaction by establishment economists and politicians...

Upon reading S&P's report, the reader finds among the main reasons for their downgrade: a lack of real entitlement reform (which cripples the federal budget) in the recent debt ceiling bill (the Budget Control Act of 2011), no prospect of increase in revenue to cover the national debt, and the political brinksmanship illustrated in Washington during the debt ceiling debate.

Now, let's look at these factors individually:

1. A lack of real entitlement reform: Entitlements, especially Medicare and Social Security, have been, and will be if left unchecked, crippling to the federal budget. According to a paper released by the Cato Institute entitled "Deficits, Debt, and Debasement," these entitlements will equal about 18.2% of GDP by 2052. They will absorb all the tax revenue taken in by the government at current tax projections. And yet, progressives, like Nancy Pelosi, refuse to address the issue. S&P even noted that one of the budgets that would have helped averted a downgrade was Representative Paul Ryan's, which addressed entitlements, like Medicare. In truth, Ryan's plan didn't go far enough, but it would have truly been a step in the right direction. Even that, however, truthfully may not have been enough to keep our credit rating unblemished. So, it's truly puzzling when establishment types throw blame upon the Tea Party when it was the establishment liberals who prevented true entitlement reform from taking place, which S&P said would have prevented a downgrade.

2. No prospects of increased revenue: To be fair, the S&P report does seem to be indicating that it's desirable form of revenue raising is tax increases, but it does not say so explicitly. The only clear point is that there is truly a lack of prospective raises in tax revenue. However, as any supply-side economists would point out, tax increases are far from the only way to increase revenue. There are free market actions that the federal government could undertake that would result in higher revenues. For example, through repealing anti-market bills, like the Dodd-Frank Wall Street Reform bill, institutions would have greater ability to higher workers, because of available funds that would have otherwise gone down as compliance costs. Let's say the net result of that is a reduction in the unemployment rate of 1%. That results in about 1 million fewer people taking advantage of government welfare, like unemployment compensation and food stamps, while also increasing the amount being paid in taxes because of newly acquired income. Therefore, rising employment results in less government expenditures and higher revenues. Without even raising a single tax, which would have otherwise have caused the price to hire another worker to increase and cause employers to pass along the increase to their employees and customers, making everyone poorer. But if you think pinhead economists like Larry Summers and Austan Goolsee will realize this anytime soon, you're fatally optimistic. And yet it is their inability to acknowledge this basic economic fact that helped result in the downgrade.

3. Political Brinksmanship: What needs to be said here? Liberals will be first to blame the Tea Party. However, it was liberals who created outrageous ads aimed at inciting fear in the general public in response to Ryan's budget. It was Obama who kept on showing up on TV needlessly to give his nonsensical two cents on the then ongoing debt ceiling deal. And it was the unwillingness from liberals to reform entitlements that resulted in a joke of a debt deal getting passed.

So, taking these factors into account, coupled with continuous economic data that has all the indications of stagflation courtesy of failed political and Federal Reserve policies, why is anyone surprised that S&P downgraded the USA's credit rating?

It seems the standard, uninformed response to S&P's downgrade is something along the lines of, "These are the same people that missed the sub-prime mortgage crisis, why should we believe them now?" Well, if you're going to assume that logic, then why should we believe Fitch or Moody's, other renown credit rating agencies, when they kept us at triple-A? After all, they missed the sub-prime crisis, as well. Why is their word any better than S&P's?

The truth is S&P is the only credit rating agency, among the most well known, that has actually taken a step in vindicating their mistake in missing the sub-prime crisis. This much was also admitted by PIMCO financial manager, Bill Gross. American credit is not as reliable as credit from countries who actually exhibit fiscal responsibility, like Switzerland. Therefore, a downgrade is correct and inherently justifiable.

Anyone who was taken by surprise by the downgrade or disagrees with it is not doing a good job in keeping abreast of the country's economic condition. The term being overused now is "double-dip recession." This is incorrect. A recession requires a period of growth or prosperity to precede it. We have had no true growth or prosperity. Therefore it is a non sequitor to say double dip. We have never recovered from the original recession. Those painfully unaware of this, I beg you to become more properly informed.

The long run is here--it's time to get sober.

Sunday, July 17, 2011

Prediction on Further Quantitative Easing

Last week, Fed Chairman Ben Bernanke admitted in front of Congress that a third round of Quantitative Easing (AKA further devaluing of the dollar) is among the Fed's plans for the future.

This really doesn't surprise anyone who has a clue about the truth of the current propped up economy that is bound to bust sooner rather than later, even though Bernanke backpedaled from that stance the next day.

So, we now know what most of us have know for a while: QE3 is in the works. The only question is when it will be implemented (how it will be implemented is immaterial).

I will now make my first major economic prediction as writer of PoK and it ties in to the ongoing farce of a "debate" on the debt ceiling:

1. A deal will be made, on or before the August 2nd deadline.

2. In that deal, there will be miniscule baseline budget cuts across the board. - What this means is that there won't be real spending cuts, just not as much spending as there would be otherwise. And since it will be across the board, there will hardly be an impact in specific agencies that are ailing the American economy, like Medicare.

3. The deal will also include minimal to negligible tax increases, or as they're now calling it "closing tax loopholes."

So what do all these steps mean? It means we will have continued outlandish spending without any revenue to cover for it because of a lack of large tax increases. This means we will spend more without any money coming in to pay for it.

So, it leads us to the question: How will we cover this continued spending since there is no increase in revenue? The answer? You got it. Quantitative Easing. Quantitative easing, or QE3, will take place as an attempt to boost aggregate demand and cover this increase in federal debt.

The debt deal will take place just in time for the August 9th Federal Open Market Committee (FOMC) meeting. In that meeting they will discuss how they will cover the increased spending with further easing but it won't yet be implemented. Publicly, Bernanke will probably announce that the Fed is awaiting further economic data to see how the economy reacts to the debt deal, or something like that, before taking any action.

Then, by the time the September 20th FOMC meeting takes place, the Fed will have seen enough negative economic data and will then announce QE3.

So, there you have it: my prediction on how the Fed will implement QE3. Am I betting any money on this? Probably not. Please remember I'm only an undergrad. However, this prediction is based on a few things: past Fed behavior, the current and near term state of the American economy, and Washington politics. I believe this bet isn't bad. And if I do get it right, maybe they'll have to have me on CNBC instead of that joke Jared Bernstein.

Saturday, July 9, 2011

American Values Network Epitomizes Ignorance

In a new commercial aimed at calling attention to Ayn Rand's beliefs, especially about God and religion, and how they can be a dangerous influence on conservatives, the American Values Network (AVN) has done a fantastic job in epitomizing the very ignorance many "social conservatives" fall prey to. Instead of summarizing the video and dissecting it point by point, I provide it here and my criticism follows:



First off, I will begin, as I am studying English, by pointing out the obvious intentional fallacy taking place here. Although I am a big fan of Atlas Shrugged and the philosophy that helped made it what it is (one of the greatest novels ever written), there is no escaping the fact that delving into, or putting too much emphasis on, the intention of an author's work is an outright fallacy. More specifically, it is an intentional fallacy. When criticizing a novel specifically, one cannot place primary importance on the author's intent. Ultimately, whatever is written, and how it is written, in a novel is to judged and criticized on its own merits and not subjugated to the underlying intentions. Therefore, in this commercial, to attempt to demagogue a novel not based on its content (plot, character development, etc.) but rather on what its author said in an interview afterward, is fallacious and ultimately irrelevant. Therefore if you want to demonize a book, especially one of such quality as Atlas Shrugged, its best you do so based on its content, and even that would be a foolish task. So, that's the first point underlining AVN's outright ignorance.

Secondly, the most obvious ignorance taking place here is the message that AVN is trying to convey, which is basically that if you agree with someone on one particular aspect, what they believe in every other aspect, if incorrect, invalidates your agreement as their other views nullify any previous perceived correct stance. In this case particularly, what people like Congressman Paul Ryan mean when they say Ayn Rand should be listened to, they generally mean on matters of economics. Rand was an outright free marketeer, no if's, and's or but's about it. So when Ryan and other Republicans praise Rand's philosophy, they are specifically praising her philosophy that emphasizes the individualism that should be the foundation of society; ethically, morally, politically and economically. Last time I checked, there was nothing anti-religion or anti-Christian about individualism. Individualism is the underlying principle to be found in Atlas Shrugged. As a matter of fact, generally understood, religion is all about the individual. When it comes to Christianity, the belief is that when one dies, he or she alone will be judged for his or her actions. Therefore, emphasis on individual actions is of utmost importance.

What any of this has to do with Rand's belief of religion is irrelevant. As a matter of fact, it should be noted that not one of those cited by AVN ever praised Rand's philosophy on God or religion. To AVN, it appears that if you agree with Rand on ethics and economics, you are somehow endorsing her theological, or lack thereof, beliefs. This is, of course, absurd. It's perfectly reasonable for someone to agree with another on one subject but totally disagree with them on another.

If AVN wants to somehow claim that Rand's premises of atheism, or anti-theism, invalidates any preceding conclusions, then they better rethink their policy. After all, the first word in their organization is "American." Let's think about this. The term American refers to the United States of America. The USA was founded upon certain principles that were written in certain documents. Foremost of these documents was the Declaration of Independence. This document was written primarily by Thomas Jefferson. Let's see what Jefferson had to say about religion, Christianity in particular:

"The whole history of these books [the Gospels] is so defective and doubtful that it seems vain to attempt minute enquiry into it: and such tricks have been played with their text, and with the texts of other books relating to them, that we have a right, from that cause, to entertain much doubt what parts of them are genuine. In the New Testament there is internal evidence that parts of it have proceeded from an extraordinary man; and that other parts are of the fabric of very inferior minds. It is as easy to separate those parts, as to pick out diamonds from dunghills."

Not entirely positive, is it? As a matter of fact, Jefferson, himself a Desist, said many disparaging things about religion and Christianity. Seems to invalidate AVN's very usage of the word "American." Does this mean that anyone who claims to be influenced by Jefferson's philosophy is wrong or "anti-Christian?" Obviously, not. But you won't see AVN making this point.

This is, of course, very silly. But this kind of stuff especially infuriates me. If the AVN wants to drive a wedge between libertarians and "social conservatives" then go for it. If only the GOP would wake up and notify these social authoritarians (not conservatives) that limited government means complete limited government. Nowhere in the powers delegated to the federal or state governments is the power to dictate values or religious beliefs. AVN tries to disparage Rand's goal of forming "a morality not based on faith." Is faith now a prerequisite to be an American now? Of course not.

The obvious point that AVN tries to make there is that one has to be religious in order to be moral. This plainly incorrect. Belief in God or adherence to any religion is NOT a prerequisite for being moral. Morals are based on reason. Everything that is moral is rational. I could be an atheist but that doesn't mean that there is nothing stopping me from being immoral. I still have my human capacity for reason and as long as I utilize that, as Rand promotes, then I will live morally. This philosophy is the very foundation of movements that have helped form this country's principles and modern philosophy: the Enlightenment, the Reformation, etc.

Don't be mistaken; I don't agree with Rand on everything. Her reasoning for not believing in God is erroneous itself. God's existence can easily be proven within reason. Also, Rand's belief on American foreign policy was anti-individualist, ironically enough. (That's another thing: Rand was a big supporter of Israel and of America being interventionist in Muslim countries, yet I suspect, as most at AVN probably agree with Rand in that aspect, they won't bother questioning their own premises there as they agree with this "nutcase" Rand)

I could go even more into the inherent contradiction included in social authoritarianism and their general participation in Republican politics. I will save that for another time...

Thursday, June 30, 2011

Mass Exodus Awaits GOP

This the Republican Party's last chance. The 2012 election is going to be one of the most defining events in recent history.

The United States is being taken further down the Road to Serfdom by President Obama, Secretary Geithner, Chairman Bernanke, and company--the foundations of which were laid by George W. Bush, Henry Paulson, etc. with the help of current Tea Party darlings, such as Michelle Bachmann and Rick Santorum.

In a world still fooled by the Left/Right Paradigm that consists of "polar" opposites in Mitt Romney and Barack Obama, it currently seems as though the most plausible way of putting an end to such a catastrophic legacy is via the Republican presidential nomination.

That in and of itself is usually enough cause to worry as Americans have been let down by Republicans time and time again in the last couple of decades. However, with the emergence of the Tea Party in the political environment, it seems not all hope is lost. In 2010, the Tea Party scored some huge victories, most notably Rand Paul's primary victory over the Republican Establishment and Democratic candidate thereafter.

However, when you go beyond the superficial, it seems the Tea Party isn't what it once was even a few months ago. The Tea Party moniker was already a misnomer when it came to numerous candidates during the 2010 cycle. The Tea Party stands for anti-establishment of BOTH parties and an outright rejection of the status quo, economically, militarily, and otherwise.

However, a closer look at some of the so called "Tea Party" candidates in the 2010 races as well as amongst the current crop of GOP presidential candidates. In my home state, the candidate who won this title by the "conservative" media was Marco Rubio. However, looking at his brief stint as US Senator shows little adherence to any type of anti-establishment legislation that would be worthy of a Tea Party label. In fact, Rubio is grossly more characteristic of the neoconservative ideology of the very people who got us in our current mess in the first place: generally a proponent of the free market, (except when it comes to trade, especially Cuba) at least when push doesn't come to shove a la Hank Paulson, and a foreign policy hawk who believes America should impose its "values" on foreign countries regardless of the sentiment of foreign citizens a la Bush. So, here we have a "Tea Party" candidate, now senator, who is basically a mix of Paulson and Bush. What exactly is so non-mainstream about him? Last time I checked, the Tea Party was against the very ideologies that got us in this mess. So, why is Rubio so highly sought after by "conservatives?" It should be noted that Rubio himself was reluctant to take on the moniker directly himself during the campaign, perhaps for the very reason that he didn't want to upset the very Republican establishment he caters to.

When it comes to the current crop of Republican presidential candidates, a lot of the characteristics of Rubio's misnomer can also be attributed to some so-called "Tea Party" candidates. Probably most like Rubio is statist Rick Santorum. Rick Santorum has made no qualms about his social authoritarianism which seeks to impose his beliefs upon the general public, which he refuses to realize is governed by a secular government. Also coupling Santorum's social authoritarianism is a Rubio/Bush/McCain-like love for American imperialism, especially in the Muslim world. It should also be noted that there was absolutely nothing anti-establishment about Santorum's tenure as Senator of Pennsylvania. As a matter of fact, pre-Obamacare, Santorum was one of many Republicans to vote for the largest government-run healthcare bill in history in the Medicare Prescription Drug Benefit plan. So, I ask again, what exactly is Tea Party about Santorum?

It seems that the phrase "Tea Party" candidate is actually more or less applied to neoconservatives, who represent the ideology that sparked the problem, with little-to-no name recognition.

Probably the candidate most identified with the Tea Party moniker, aside from Congressman Ron Paul (who along with Governor Gary Johnson are the only genuine anti-establishment, therefore Tea Party, candidates out there), is Congresswoman Michelle Bachmann. Here's one to fit the bill. She is a Tea Party activist, speaks at Tea Party rallies, and even started a Tea Party Caucus in the House of Representatives. However, Bachmann's record is not completely Tea Party either. Although Bachmann was against the 2008 auto bailouts that were eventually passed, she did favor a different type of government bailout--not a very Tea Party-like position. Bachmann also favored stimulus funds in 2009 that would go to pet projects in Minnesota. How Tea Party is that?

I'll grant it though: Bachmann is one the least ugly candidates compared to others in terms of record and rhetoric, even though her stance on marriage is a little confusing...

So, with all these misnomers abound in the GOP crop of presidential candidates, along with candidates who are so bad they don't even try to go for that label, like Mitt Romney or Jon Hunstman, there are a few outcomes that can benefit the GOP at the end of the presidential nomination process.

In an ideal world, true conservative Tea Party candidates, Gary Johnson or Ron Paul would be the GOP's nominee for president. However, in this current climate, with an ardent media bias against libertarianism as well as an inherent misunderstanding and erroneous caricature of libertarian philosophy, it's tough, though possible, that either champions will come out on top.

If that is not the outcome, then the only candidates that could possibly convince libertarian Republicans and true Tea Partiers to stay with the GOP are those that are Tea Party-esque. In this category, we have Sarah Palin and Michelle Bachmann. Although these candidates are more flawed than the ideal, they are comparatively far less flawed than establishment types. Also, their inherent outsider philosophy is a plus for any true Tea Partier. This anti-establishment, flawed yet willing to learn mentality could be enough to keep the libertarian/Tea Party crowd in line for the GOP.

The third scenario that could keep a mass exodus from the GOP from happening is the nomination of a pragmatic, pure Republican type, like Newt Gingrich, paired with a vice presidential choice of Rand Paul, Gary Johnson, or Jim DeMint--Tea Party/Libertarians deemed to be less extreme and more pragmatic.

However, absent those scenarios, I do not see anything in store for the GOP except a mass exodus of a significant group of libertarians and Tea Partiers, if they go down the most probable road of nominating a talking head, a true politician (which isn't good), someone so intrinsically similar to the Obama and the status quo, like Mitt Romney or Jon Huntsman. Even a Rick Perry nomination would be enough to disenfranchise those who know his true record which is impeccably Bush-esque. Tim Pawlenty is enough to drive the libertarians out as well. And you can bet that any ticket that includes either Marco Rubio or Jeb Bush would be enough to drive the libertarians out.

I believe that going down this most probable route will be the final straw that breaks the camel's back for many libertarian Republicans and true Tea Partiers. Where they choose to go, or not go for that matter, is immaterial. An influx of disenfranchised libertarian Republicans to the Libertarian Party might be enough to siphon enough votes from the GOP ticket, therefore handing a victory to Obama. This is not a good thing of course, but neither is compromising your principles and voting for a lesser of two evils. This a common thread that has allowed Republicans and Democrats to keep hold of their political duopolies: the fact that, when it comes down to it, there is a perception that even the most disenfranchised voter must still pick the lesser of two evils.

This is will not do anymore. Libertarians and true Tea Partiers are well aware of the special significance this time around. There is no more compromising principles and Constitutionality. Because, in that situation where you must choose between a lesser of two evils, in the end, you are still voting for evil.

The GOP better get their act together or face irreparable damage.

Sunday, June 26, 2011

The Fallacies of Protectionism

Calls for legislation, or action, to be taken by the government in the mold of protectionist policies can be heard from a good amount of unions, as well as other prominent talking heads. Former prospective presidential candidate, Donald Trump, proudly advocated for protectionist policies in his campaign-like speeches he gave before his ruling out of a presidential bid. This is a very common practice and is rooted in a lack of basic understanding of some economic principles. I will illustrate.

Firstly, protectionism calls for policies that discourage consumers and businesses from purchasing products, labor, capital from overseas, namely China. These discouragements usually take the form of tariffs on imports. By placing an additional charge, or tax, on imported goods, you discourage producers from making those items available to their consumers, and are therefore signalling to producers to instead look in the United States for its products as to avoid additional charges that they would face if they chose to go with imported goods. Quite simply this is a distortion of signals that the market is otherwise making clear. Market economies have an inherent natural regulatory mechanism: competition. Competition ensures that entrepreneurs and businesses provide goods to consumers at the lowest possible price and quality demanded. However, tariffs, and other protectionist policies, distort what signals the market is trying to illustrate through competition.

For example, the reason Wal-Mart is able to be such a thriving business is that it provides products that consumers demand at both the price and quality they demand. For Wal-Mart to ensure that it keeps the voluntary patronage of its customers, and not lose it to competitors like Target, Wal-Mart must go about finding ways to import products at the lowest possible price which they can then proceed to sell to consumers at a price at least as great as the cost of importing that item to ensure expenses do not exceed revenues. If consumers demand pencils at a price of $1 then Wal-Mart must go about bringing in pencils to meet that demand and sell it at the market clearing price (the price at which producers want to sell exactly the number of units consumers want to purchase). Wal-Mart then shops around for its supply of pencils and finds that China produces and sells pencils for the lowest price and quantity demanded by Wal-Mart. However, once tariffs are set in, Wa-Mart is then discouraged from paying additional costs, or taxes, by means of tariffs and instead looks at the USA for its pencils, where they are sold for a higher price than China.

We are already beginning to see the adverse effects of protectionism. Now, when Wal-Mart then decides to buy these more expensive pencils, they must find a way to defray these additional costs. They can do it any number of ways; all of them detrimental. One way they could defray the costs would be by raising its price of pencils that it sells. This, of course, is bad for the consumer as the consumer is demanding these pencils at a lower price. This then forces consumers to not buy as many pencils they demand, resulting in a decline in the quantity demanded by consumers. Another way Wal-Mart could defray the costs it faces due to tariffs is by making up for those additional expenses by cutting back on its labor force. Therefore, in order to accommodate for the expensive price in pencils, Wal-Mart must fire x number of employees to ensure that the balance of revenues and expenses is kept profitable.

So, we already see two adverse effects of protectionism: rising prices for consumers and rising unemployment due to layoffs by the company incurring new expenses. How could either of these results possibly be good for the economy? Quite simply, they can't.

Then the argument comes up, "How could we (American workers) ever expect to compete with China where their wages are unfairly much less than those here?"

Well, there are a few responses to this:

Firstly, their wages are so much less compared to those in the United States precisely because of policies pursued by the government, mainly minimum wage laws. For example, a company who wants to make shoes wants to hire a low skilled worker. In China, that company could hire a low skilled worker for exactly the amount his labor is worth, say $5 an hour. However, in the United States, thanks to minimum wage laws that distort market salaries, a company cannot hire a low skilled worker for exactly the amount his labor is worth. For example, the market worth of the labor of the worker is only $5 an hour, however, because of minimum wage laws that distort market salaries, that company MUST pay $7.25. The benefit of hiring this worker is less than the cost as his/her salary is $2.25 over market price. What does this company do? Well, it can either move to China and pay workers what their labor is valued at. Or it can stay in the United States and pass along the increased cost to its customers. Either scenario is detrimental to the American economy.

Secondly, there is the principle of comparative advantage. What comparative advantage means is that one person, or entity, has relative superiority when taking other tasks into account. In this case, say the United States' wage rates and prices in a industry like manufacturing are inherently high because we are just that much better than China and that's why Chinese goods are priced lower. Well, then if that were true, then it is in the best interest of the United States to allow China to continue providing lower priced goods. This would then allow the United States to pursue its superiority in a different industry, like the servicing industry. What we would then have is low priced goods coming in from China, while Americans make their money in services provided to other countries. Win-win.

So, it really does seem as though protectionism sounds good on the surface ("Buy American," raise tariffs on Chinese goods) but in actuality, it is detrimental to the American economy as a whole. Think of that the next time you see some ignoramus, like Donald Trump, advocating for an increase in the minimum wage or a tariff on foreign goods.