We here quite a bit today about the Pros and Cons of Tariffs.  Most of what we are hearing comes from the economic and business perspective.  How about we look at the perspective of a politician.

I recently read a great piece published at the Townhall.com news site, by the famed economist Walter Williams.  Mr. Williams is a Professor of Economics in the Department of Economics at George Mason University.  In this piece he is giving a different perspective on tariffs, a political perspective.  I always attempt to give my listeners of my radio show and the readers of my column a different perspective to help them think about the issues of today and form their own opinions.

In his piece to informs us of two economic lessons, one being "the seen and unseen" and the other "narrow well-defined large benefits versus widely dispersed small costs”.

What is “the seen and unseen” lesson, well as Professor Williams explains it, it is:

when the government creates a benefit for one American, it is a virtual guarantee that it will come at the expense of another American -- an unseen victim. The victims of steel and aluminum tariffs are the companies that use steel and aluminum

The seen is the producers of steel and aluminum in the current case, the unseen are the many companies whose price of steel and aluminum, their raw product, increases which then increases the cost of their product.

Professor Williams then goes on to explain the political perspective of tariffs and the seen and unseen victims when he wrote:

Politicians love having seen beneficiaries and unseen victims. The reason is quite simple. In the cases of the steel and aluminum industries, company executives will know whom to give political campaign contributions. Workers in those industries will know for whom to cast their votes. The people in the steel- and aluminum-using industries may not know whom to blame for declining profits, lack of competitiveness and job loss. There's no better scenario for politicians. It's heads politicians win and tails somebody else loses.

Now let us move on to Professor Williams’s second economic lesson on "narrow well-defined large benefits versus widely dispersed small costs”.   Professor Williams explains this economic theory in the following way:

Then there's the phenomenon of narrow well-defined large benefits versus widely dispersed small costs. A good example can be found in the sugar industry. Sugar producers lobby Congress to place restrictions on the importation of foreign sugar through tariffs and quotas. Those import restrictions force Americans to pay up to three times the world price for sugar

In the case of the sugar industry he explains how it works.  This sugar tariff:

pays for workers and owners in the sugar industry to come up with millions of dollars to lobby congressmen to impose tariffs and quotas on foreign sugar. It means higher profits and higher wages. Also, it's easy to organize the relatively small number of people in the sugar industry. The costs are borne by tens of millions of Americans forced to pay more for the sugar they use. Even if the people knew what the politicians are doing, it wouldn't be worth the cost of trying to unseat a legislator whose vote cost them $20 a year. Politicians know that they won't bear a cost from sugar consumers. But they would pay a political cost from the sugar industry if they didn't vote for tariffs. So they put it to consumers -- but what else is new?

The “narrow well-defined” large benefactors are the sugar industry and their employees.   The “widely dispersed small costs” are us the consumers of sugar who only pay a small amount per year, in the sugar industry case it is $20.

You see there is an economic/business perspective on why the politicians do what they do and a political perspective.

Which one do our elected leaders choose more often than not, probably the political perspective.  The trick is to attempt to figure out which perspective your elected politicians is reacting to.

Now you are informed about a totally different perspective of which to form your opinion on.  That is what I love about Professor Williams’s piece.

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