Supply side economics, which aims to stimulate growth by reducing costs for industry, is jeered today as “trickle down economics”; it’s considered regressive because the benefits are concentrated for suppliers while the benefits to consumers never materialise. This policy has “failed every time it’s tried!”
Tariffs are the antithesis of supply side strategy. Yet tariffs, which increase costs for suppliers like any other tax, are derided by the same people as “regressive” as if they will always be born 100% by the consumer. Supposedly, tariffs cannot possibly benefit the working class on any time scale.
At least one of these positions must be at least partly wrong. Which is it?
Both of these can be true. Compare the US to countries like China for example, which has had success growing its economy with more state led companies and financing through state owned banks. It’s not perfect, but compared to western countries, less of the profits go to the private sector, and it allows the government to more directly chase long term strategic goals.
Does partly wrong imply they can both be partly right?
Regardless, within the current system (which is not based on theory and based on reality), we combine these elements, and neither seem to directly benefit certain industries depending on who you're looking at. If it does, these policies may not benefit everyone.
Tariffs are the antithesis of supply side strategy. Yet tariffs, which increase costs for suppliers like any other tax, are derided by the same people as “regressive” as if they will always be born 100% by the consumer. Supposedly, tariffs cannot possibly benefit the working class on any time scale.
At least one of these positions must be at least partly wrong. Which is it?