Trade (and Tariffs)

Alt text: "You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."

This is hilarious and I agree. I think an under-appreciated aspect of all this is the complete schadenfreude from everyone. The story goes tariffs only hurt yourself but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Very funny. And then you have people predisposed to higher-taxes who are contorting themselves over the economic cost of this tax while supporting significantly more economically destructive tax policies. Very funny. And, of course, the opposite. Republicans in my state are campaigning on lowering taxes and inflation while also defending tariffs! Very funny.

Reference to Aesop's fable? https://en.wikipedia.org/wiki/The_Belly_and_the_Members

A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit. A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction? https://yalebooks.yale.edu/book/9780300261448/trade-wars-are...

To make the analogy even more perfect, the character should be holding a saw rather than a hammer.