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Now that we have a new thread, in order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a complete and thorough read before posting!

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DarkPlasmaBall
Profile Blog Joined March 2010
United States46227 Posts
November 26 2024 13:56 GMT
#92501
Here's an excellent beginner-level explanation and analysis of how Trump's universal tariffs would be inflationary and make goods more expensive for Americans (if he is indeed able to implement his destructive economic plan, as president):

"There is nothing more satisfying than looking at a crowd of people and helping them get what I love." ~Day[9] Daily #100
DarkPlasmaBall
Profile Blog Joined March 2010
United States46227 Posts
November 26 2024 15:28 GMT
#92502
Well well well, if it isn't the consequences of our own actions. The American people have spoken, and they want a worse economy with more expensive food, goods, and services. Trump's two biggest campaign promises were mass deportations and universal tariffs, so let's see if he accomplishes either of those, at the expense of our country's well-being.

"Trump, a Republican, vowed to deport millions of immigrants in the U.S. illegally as part of his campaign to win back the White House ... which could upend a food supply chain heavily dependent on immigrants in the United States ... Nearly half of the nation's approximately 2 million farm workers lack legal status, according to the departments of Labor and Agriculture, as well as many dairy and meatpacking workers ... They're filling critical roles that many U.S.-born workers are either unable or unwilling to perform ... Mass removal of farm workers would shock the food supply chain and drive consumer grocery prices higher."
https://www.reuters.com/world/us/us-farm-groups-want-trump-spare-their-workers-deportation-2024-11-25/
"There is nothing more satisfying than looking at a crowd of people and helping them get what I love." ~Day[9] Daily #100
KwarK
Profile Blog Joined July 2006
United States44195 Posts
Last Edited: 2024-11-26 16:04:10
November 26 2024 16:03 GMT
#92503
This can be argued a priori.

Trade is objectively a good and rational thing to do. That's why it happens. You have something that you place a low value on. You want something that you place a higher value on. Someone else has that thing you want and they place a low value on it. They want the thing you have and they place a higher value on it. The status quo is irrational and contrary to fundamental forces, it's like a swimming pool with the shallow end filled to the top and the deep end empty.

You could refuse to do the trade but you'd be insisting on voluntarily staying at a lower value state when a higher value state was available, it shouldn't exist.

Tariffs can't do anything about the fundamental economic rationality of trade and so they attempt to introduce externalities in the form of additional costs to prevent people engaging in optimal economic behaviour. Essentially if you punish people enough for doing the right thing then they won't do it, even if it is the right thing.

Let's take a very simple example.

You have country A which has huge amounts of easily available oil. Their cost of production is negligible, the infrastructure is all in place, and their workforce is specialized in oil extraction and refining. They have fuck all farmland. Maybe it's a desert. It takes their workforce 1 day per week to produce enough oil for the country. They can work 2 days a week and produce enough oil and oil products for both countries.

You have country B in which there is a lot of farmland, the infrastructure is all in place, and the population are specialized into farming and food production. They don't have much oil. It takes their workforce 1 day per week to produce enough food for the country. They can work 2 days a week and produce enough food for both countries.

Assuming that all anyone needs is oil and food then these two countries can work together to achieve a very low cost of living. They trade oil for food and work 2 days a week while spending the other 5 having fun.

Then some dipshit in country A says that country B is preventing them from having food production jobs. The fact that they literally don't want or need the jobs, that they're not specialized into farming jobs, they're not trained in farming jobs, they lack the required resources to do it, and that not having a job while still having everything you need is the ideal state, is somehow irrelevant. The boss says that country A needs to get into farming.

80% of the workforce quit producing oil and start working 5 days per week to produce enough food for country A. It takes so much longer because they're so much worse at food than they are at oil. The remaining 20% of the oil workforce now have to work 5 days per week to supply oil to country A rather than the previous 1 day.

Meanwhile country B, which can no longer trade food for oil with country A, now has to do the same. 80% of their workforce is redirected to oil production activities while the remaining 20% produce food for country B only.

Now you can buy stuff made in your home country and every purchase you make directly supports jobs in your home country. When you buy a loaf of bread in country A you're now directly supporting some confused geological surveyor in his new role as a terrible baker. This is not an upgrade over the previous state of affairs. In the previous state of affairs when you bought the loaf of bread you were supporting some foreign baker who would then buy oil from the oil company in your country that employed the geological surveyor to do geological surveys.

But that's a little too indirect and therefore doesn't count. The fact that by buying foreign you're still supporting American jobs, but the economically rational American jobs that the foreigners are willing to pay America premium wages to do, doesn't matter. Better to quit our high paying, economically rational, productive, efficient jobs in order to maximize our jobs. After all the geological surveyor previously only had a job for 2 days a week, now you've got him working 5 as a baker, that's so much more work being done.
ModeratorThe angels have the phone box
Impervious
Profile Blog Joined March 2009
Canada4222 Posts
November 26 2024 16:33 GMT
#92504
Kwark, I can give you some real examples. I'm a Canadian, and for the last couple of years I've worked on two big projects for my company which are for customers in the USA. Both of these contracts are far from wrapped up, and will drag into at least 2026, and that's before any long-term maintenance contracts are put in place that could drag out for years. We have a lot of different contracts on the go, many of which are in the USA, but also many of them are worldwide. I work for an engineering company that is really good in a certain niche, which is why we were hired to do what we do.

A lot of the basic products we use are manufactured in the USA. I know there is a mentality that the USA has slipped in manufacturing of goods, but when dealing with higher end products, the USA is still a worldwide powerhouse for this type of manufacturing. If these proposed taxes actually do happen, it'll likely cause some kind of retaliatory taxes on our end. There will be taxes on us purchasing the equipment (possibly incentivizing us to purchase equipment manufactured in Europe or Asia instead of the USA), and then again when we sell it to the end user. The end user is going to suffer from these, as while an increase in price really sucks, there's been enough investment so far that it would be difficult to stop these projects, and there would be issues if we were to stop and another company would have to try to pick up the pieces instead.

A lot of the equipment we purchase from the USA also has components manufactured in Canada or Mexico. Even if eventually logistic chains could be simplified and reduce the amount of border crossings to minimize the effects of the tariffs, in the short term, prices would absolutely skyrocket as sometimes things cross borders multiple times before the arrive at the end user.

This has some military applications too, as some of our customers are the military or provide equipment for the military. I don't think this would have impacts on short-term military readiness, but I do think in the medium or long term, there would be issues.....

Before I started at this job, I used to work in the auto industry. Things cross the borders multiple times in the auto industry too. I worked at one factory when I was younger that bought steel rods from the USA, used some specialized presses and other machines to reshape and cut those steel rods, then ship them back to the USA for final assembly. It was extremely expensive to setup the machinery, and would be difficult (although not impossible) to move it to the US instead to avoid the border crossings. However, in the short term, you either need to pay the taxes to keep the logistic chain intact, or suffer months of downtime to move the equipment somewhere else. And moving it is assuming there is ready and available labour and transportation to do so, given that a lot of companies would be trying to do the same thing at the same time if these taxes go into place quickly. In any case, you're passing the costs of that to the end user. Prices will skyrocket.

I'll fully admit that there are lots of inefficiencies in our current system that could be improved if we reduced the amount of times things moved as far as they do. And I'm not talking about just across borders. Personally I think that our carbon tax here in Canada is a great way to slowly let the markets make these adjustments. That company that I used to work with that bought steel from the USA and shipped the final product back, as an example, has started buying some of the steel from closer to home due to the increasing costs of transportation. While not a perfect solution, it's heading in the right direction, and the carbon taxes are pushing it without direct government intervention. These tariffs are an absolute wrecking ball in comparison.
~ \(ˌ)im-ˈpər-vē-əs\ : not capable of being damaged or harmed.
KwarK
Profile Blog Joined July 2006
United States44195 Posts
November 26 2024 16:49 GMT
#92505
Basically all trade, between individuals, companies, nations is real world examples of this. That’s why the trade happens. Trump is coming out against trade in a way that is extremely opposed to the mainstream Republican ideals.

There is a fundamental shift happening within the Republican Party from being a party of small government, free market, low regulation, pro business, low tax neoliberals to regressive big government nationalist conservatives. The stances of the party are unrecognizable compared to 20 years ago. That’s why there were so many prominent Republicans revolting against Trump. But they harnessed their cart to the regressive conservative horse and they’ll go where the horse takes them.
ModeratorThe angels have the phone box
Impervious
Profile Blog Joined March 2009
Canada4222 Posts
November 26 2024 16:57 GMT
#92506
Yea. It's been absolutely wild to watch.

I was just in Texas last week for work, and I heard from more than a few people that they were happy that Trump won. I couldn't be assed to try to explain how devastating some of these policies would be.....

That, plus, one of the hosts on the radio channel I was listening to in the car mentioned how he doesn't honk at people on the road because you never know if the person you honk at is armed. You know, a normal every-day thing you think about in every other civilized country on the earth.....
~ \(ˌ)im-ˈpər-vē-əs\ : not capable of being damaged or harmed.
Sadist
Profile Blog Joined October 2002
United States7328 Posts
November 26 2024 17:10 GMT
#92507
The tariff thing I dont understand. My understanding is that tariffs are to try to protect specific industries or possibly even discourage something (akin to a sin tax). Blanket tariffs for entire countries seem like a really dumb idea. Especially if the countries are your allies and major trading partners. I dont see this actually happening or if it does there will be catastrophic inflation.
How do you go from where you are to where you want to be? I think you have to have an enthusiasm for life. You have to have a dream, a goal and you have to be willing to work for it. Jim Valvano
Simberto
Profile Blog Joined July 2010
Germany11928 Posts
November 26 2024 17:21 GMT
#92508
On November 27 2024 02:10 Sadist wrote:
The tariff thing I dont understand. My understanding is that tariffs are to try to protect specific industries or possibly even discourage something (akin to a sin tax). Blanket tariffs for entire countries seem like a really dumb idea. Especially if the countries are your allies and major trading partners. I dont see this actually happening or if it does there will be catastrophic inflation.


Yeah. It is a really dumb idea. But if you move beyond reality and sanity, you can just bullshit whatever and apparently there are enough people to just gobble it up to make you president.
JimmyJRaynor
Profile Blog Joined April 2010
Canada17695 Posts
Last Edited: 2024-11-26 18:22:51
November 26 2024 18:02 GMT
#92509
On November 26 2024 22:56 DarkPlasmaBall wrote:
Here's an excellent beginner-level explanation and analysis of how Trump's universal tariffs would be inflationary and make goods more expensive for Americans (if he is indeed able to implement his destructive economic plan, as president):

https://www.youtube.com/watch?v=lD3FX_wxqUI

The threat of tariffs is a decent negotiation tactic in getting better deals with Canada.

I would go more by what Trump does than what he says.

The right wing premier of Canada's #1 province already sounded the alarm bells.

WP President Trump.
Ray Kassar To David Crane : "you're no more important to Atari than the factory workers assembling the cartridges"
KwarK
Profile Blog Joined July 2006
United States44195 Posts
November 26 2024 18:26 GMT
#92510
On November 27 2024 03:02 JimmyJRaynor wrote:
I would go more by what Trump does than what he says.

What Trump says is that he's an amazing deal maker. What Trump does is fuck with trade and then bail the victims out with taxpayer money.
ModeratorThe angels have the phone box
maybenexttime
Profile Blog Joined November 2006
Poland5838 Posts
November 26 2024 19:01 GMT
#92511
The US was the biggest beneficiary of the post-WW2/-Cold War status quo. The idiots voting for Trump decided to kill the golden goose (and relative world peace with it).
WombaT
Profile Blog Joined May 2010
Northern Ireland27211 Posts
Last Edited: 2024-11-26 19:03:23
November 26 2024 19:03 GMT
#92512
On November 27 2024 03:26 KwarK wrote:
Show nested quote +
On November 27 2024 03:02 JimmyJRaynor wrote:
I would go more by what Trump does than what he says.

What Trump says is that he's an amazing deal maker. What Trump does is fuck with trade and then bail the victims out with taxpayer money.

He’s a ‘great dealmaker’ in that when he holds all or most of the cards he can turn it into a winning hand. I’ve yet to see much evidence he’s a great negotiator when he does not.

Even when he’s not pursuing asinine policy
'You'll always be the cuddly marsupial of my heart, despite the inherent flaws of your ancestry' - Squat
oBlade
Profile Blog Joined December 2008
United States6320 Posts
November 26 2024 19:42 GMT
#92513
On November 27 2024 00:28 DarkPlasmaBall wrote:
Well well well, if it isn't the consequences of our own actions. The American people have spoken, and they want a worse economy with more expensive food, goods, and services. Trump's two biggest campaign promises were mass deportations and universal tariffs, so let's see if he accomplishes either of those, at the expense of our country's well-being.

"Trump, a Republican, vowed to deport millions of immigrants in the U.S. illegally as part of his campaign to win back the White House ... which could upend a food supply chain heavily dependent on immigrants in the United States ... Nearly half of the nation's approximately 2 million farm workers lack legal status, according to the departments of Labor and Agriculture, as well as many dairy and meatpacking workers ... They're filling critical roles that many U.S.-born workers are either unable or unwilling to perform ... Mass removal of farm workers would shock the food supply chain and drive consumer grocery prices higher."
https://www.reuters.com/world/us/us-farm-groups-want-trump-spare-their-workers-deportation-2024-11-25/

If it's cheaper to break laws than follow them, we may as well just get rid of them. Checkmate, market capitalists!

Either that or no country needs to rely on illegal labor and systematic exploitation of minorities to have food. It's not pro labor, it's not humanitarian, it's not pro American. It's pro temporary cheap shit and corporate greed.
"I read it. You know how to read, you ignorant fuck?" - Andy Dufresne
DarkPlasmaBall
Profile Blog Joined March 2010
United States46227 Posts
November 26 2024 19:45 GMT
#92514
On November 27 2024 04:42 oBlade wrote:
Show nested quote +
On November 27 2024 00:28 DarkPlasmaBall wrote:
Well well well, if it isn't the consequences of our own actions. The American people have spoken, and they want a worse economy with more expensive food, goods, and services. Trump's two biggest campaign promises were mass deportations and universal tariffs, so let's see if he accomplishes either of those, at the expense of our country's well-being.

"Trump, a Republican, vowed to deport millions of immigrants in the U.S. illegally as part of his campaign to win back the White House ... which could upend a food supply chain heavily dependent on immigrants in the United States ... Nearly half of the nation's approximately 2 million farm workers lack legal status, according to the departments of Labor and Agriculture, as well as many dairy and meatpacking workers ... They're filling critical roles that many U.S.-born workers are either unable or unwilling to perform ... Mass removal of farm workers would shock the food supply chain and drive consumer grocery prices higher."
https://www.reuters.com/world/us/us-farm-groups-want-trump-spare-their-workers-deportation-2024-11-25/

If it's cheaper to break laws than follow them, we may as well just get rid of them. Checkmate, market capitalists!

Either that or no country needs to rely on illegal labor and systematic exploitation of minorities to have food. It's not pro labor, it's not humanitarian, it's not pro American. It's pro temporary cheap shit and corporate greed.


Or we could just help those millions of hard-working individuals - who are propping up a good portion of our economy, which we take completely for granted - obtain permanent, legal residence in our country. Deporting millions of them destroys their lives and destroys our economy.
"There is nothing more satisfying than looking at a crowd of people and helping them get what I love." ~Day[9] Daily #100
KwarK
Profile Blog Joined July 2006
United States44195 Posts
November 26 2024 19:53 GMT
#92515
On November 27 2024 04:03 WombaT wrote:
Show nested quote +
On November 27 2024 03:26 KwarK wrote:
On November 27 2024 03:02 JimmyJRaynor wrote:
I would go more by what Trump does than what he says.

What Trump says is that he's an amazing deal maker. What Trump does is fuck with trade and then bail the victims out with taxpayer money.

He’s a ‘great dealmaker’ in that when he holds all or most of the cards he can turn it into a winning hand. I’ve yet to see much evidence he’s a great negotiator when he does not.

Even when he’s not pursuing asinine policy

Trump held all of the cards with his 'Art of the deal' book deal and yet still gave the ghostwriter thousands of times more money than he should have. He made the worst deal in the history of publishing.
ModeratorThe angels have the phone box
Vivax
Profile Blog Joined April 2011
22407 Posts
November 26 2024 20:36 GMT
#92516
On November 27 2024 03:26 KwarK wrote:
Show nested quote +
On November 27 2024 03:02 JimmyJRaynor wrote:
I would go more by what Trump does than what he says.

What Trump says is that he's an amazing deal maker. What Trump does is fuck with trade and then bail the victims out with taxpayer money.


Would be nice if bailouts were public but nobody really knows who needed money with the whole pandemic stuff and public loans.

Made a few really rich too.
Not just in the US probably.

The economy became kinda shady since his first term.
Just a feeling.
RenSC2
Profile Blog Joined August 2011
United States1094 Posts
November 26 2024 20:45 GMT
#92517
On November 27 2024 04:53 KwarK wrote:
Show nested quote +
On November 27 2024 04:03 WombaT wrote:
On November 27 2024 03:26 KwarK wrote:
On November 27 2024 03:02 JimmyJRaynor wrote:
I would go more by what Trump does than what he says.

What Trump says is that he's an amazing deal maker. What Trump does is fuck with trade and then bail the victims out with taxpayer money.

He’s a ‘great dealmaker’ in that when he holds all or most of the cards he can turn it into a winning hand. I’ve yet to see much evidence he’s a great negotiator when he does not.

Even when he’s not pursuing asinine policy

Trump held all of the cards with his 'Art of the deal' book deal and yet still gave the ghostwriter thousands of times more money than he should have. He made the worst deal in the history of publishing.

To be fair, he had to negotiate against the guy who wrote The Art of the Deal. He got his name slapped on a reasonably good (I've heard) book and got to take credit for it. Most of his other deals where he slaps his name on someone else's product aren't that lucrative.

As for your tariff example, it is too simplified to the point that important things get lost. Country A and B both already had food and oil industries. Country A does much better at oil, but still needed to produce food and thus had a robust labor force in food. As they switch to trade, that robust labor force in food gets out competed. Those employees in food lose their jobs and don't have training in oil. The country as a whole is nominally better off, but the individuals in the inefficient market get screwed by free trade. They end up out of work and on welfare (if the country provides). That creates a situation where the workers in oil end up subsidizing the out of work former food employees. The oil workers feel like their money is being stolen to pay for the lazy ex-food guys and that builds up resentment. The food guys lose their identity and meaning in their lives as they become unemployed and sucking on the government tit. They feel screwed by free trade and build up resentment.

Everyone ends up resentful.

That very much describes the US's situation. Good overall numbers on things like GDP, but a whole lot of screwed individuals in the labor force with a lot of built up resentment all around.
Playing better than standard requires deviation. This divergence usually results in sub-standard play.
micronesia
Profile Blog Joined July 2006
United States24782 Posts
November 26 2024 21:18 GMT
#92518
On November 27 2024 04:01 maybenexttime wrote:
The US was the biggest beneficiary of the post-WW2/-Cold War status quo. The idiots voting for Trump decided to kill the golden goose (and relative world peace with it).

I see it as voters acting like children not being willing to eat their vegetables. That's not to say the democrats are a nutritionist's delight, but the alternative opted for in 2016 and 2024 involves eating exclusively dessert for every meal and believing the long-term consequences of that will be a positive thing.
ModeratorThere are animal crackers for people and there are people crackers for animals.
KwarK
Profile Blog Joined July 2006
United States44195 Posts
Last Edited: 2024-11-26 21:29:46
November 26 2024 21:22 GMT
#92519
But the solution is worse than the problem. The out of work food guys are bad at food, that’s why they lost their jobs. If you slap tariffs on to make them competitive you’re still creating a scenario in which the efficient oil workers are overpaying for food to subsidize the worthless labour of the food guys. You still have a productive sector and a parasitic sector of your economy, but now with more bullshit jobs.

Forcing the oil guys to pay high wages to people who aren’t good at their food job is not a better solution than taxing them, buying the food from better workers, and letting the shitty workers do nothing.

You'd actually be better off just keeping the free trade going and paying the out of work people to dig and fill holes than creating a tariff scheme.
ModeratorThe angels have the phone box
Liquid`Drone
Profile Joined September 2002
Norway28869 Posts
November 26 2024 21:54 GMT
#92520
Eh I think food is different from other goods and that there are various reasons why it might make sense for a country to subsizide local food production (or slap tariffs on foreign food, or both). For one there's the security aspect - if there's some sort of global crisis that makes food a global scarcity it's good to have maintained some ability to produce food even if you're not entirely self-sustainable. Moving from 50% to 80% which would be enough to avoid a famine is gonna be much easier than moving from 0% to 80%.

Secondly one might think that local communities have some intrinsic value not necessarily quantifiable in economic terms or what have you and these communities might be built around food production and there's a school and kindergarten and nursing homes and if you take away the farms then there's no real creation of anything anymore and it'll become desolated. Like, people aren't just cogs in a machinery that can or should be shuffled around for maximum efficiency. There can also be ethical concerns, or environmental ones, that make you favor local production over importing something from a different continent - even if that other country produces stuff at 20% the cost you do.

Norway does have some tariffs in place on various foods. Certain types of cheese actually comes with a 277% tariff. When that was implemented there were lots of warnings that now the consumer would suffer greatly because they'd lose out on lots of variety. What actually happened was that producing local cheese became way more viable because even if it's more expensive in Norway, they'd no longer be demolished on price by cheese from abroad, and in the past 10 years, Norway has actually become a cheese powerhouse. I thought it sounded excessive when it was added like 12 years ago but honestly in retrospect I consider it a success.
Moderator
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