A Postmortem on Trump’s Proposed Chinese Art Tariff

Kealey Boyd interviewed Dr. DeMartino for her article about “why Chinese art narrowly evaded a new 10% tariff on Chinese goods”. Excerpts of the article are listed below.

“Chinese art may return to future tariff lists, so what effect will it have on prices, and what strategies will galleries and collectors leverage to avoid additional costs? Economist George DeMartino, Professor of Economics at the University of Denver’s Josef Korbel School of International Studies, told Hyperallergic, “Highly-valued, non-substitutable art objects, newly produced or antiques, have inelastic demand so the price would have risen as a result of the tariff, but the amount of trade would largely have been unaffected.” The minimal effect on trade quantity would likely be due to collectors looking for substitutes for their goods, or art in this case.”

“Economist DeMartino notes that a 25% tariff on a small market that presents no competitive disadvantage to local producers is unusual. “You could say that like the art itself, the value of the tariff would have been ‘symbolic’ rather than substantive. It would have served no economic purpose whatsoever.” In fact, the tariff would be doing the Chinese government a favor, according to Daniel Chen, by accelerating the repatriation of antiques, which is an important initiative in China.”

“The art tariffs were not only baffling to art dealers, but the rhetoric around their application adds additional uncertainty, Van Tress notes, “The Chinese know there is a trade imbalance, but they don’t like rudeness. It could become a much bigger problem than whether the art market sees a tax increase.” DeMartino agrees, “Trump is unraveling US economic and political influence abroad at a startling rate by offending US allies, and by teaching other countries’ leaders that the US is now an undependable partner.””

Do Economists Have Social Responsibilities?

During an interview by the Institute for New Economic Thinking Dr. DeMartino,

“discusses economist’s influence, whether they should ever lie, and the irreparable ignorance that haunts economics. DeMartino argues for professional ethics in economics as a field of study beyond a code of conduct.”

Passports for purchase: Open Citizenship Doors around the World

Kate Springer cites Dr. DeMartino in her article on purchased residency.

George DeMartino, a professor of international economics and ethics at the University of Denver, suggests CIPs could cause unintended side effects.
“These programs do not ensure a win-win solution to the problem of capital scarcity in poorer countries,” explains DeMartino. “They are just as apt to represent beggar-thy-neighbor strategies — and this problem is exacerbated when the country with the CIP is relatively wealthy and the investors come from relatively low-income countries,” says DeMartino. There is also a potentially more serious problem, he says, which involves politics. “Programs such as these threaten to diminish political fraternity by affording special privileges to the already privileged,” explains DeMartino. “They permit those with the least need to migrate and achieve citizenship in a new country the greatest opportunity to do so, while those far more desperate to migrate, such as those facing dire economic circumstances at home, are fully excluded from the benefits of these programs. The programs are not the cause of this inequality, but they amplify it.”

2018’s Most & Least Federally Dependent States

Dr. Demartino was interviewed by John S Kiernan in his article about state’s federal dependence.

Screen Shot 2018-03-30 at 2.06.48 PM.png

“Should Federal resources be allocated to states according to how much they pay in federal taxes or should some states subsidize others?
A key piece of the social contract that unifies a democratic country like the U.S. entails shifting resources to places where the need is greatest and the purpose is most pressing. We see this most dramatically in the wake of natural disasters, but in fact it is normal, appropriate pattern in any civilized society.
What programs should be state/local responsibility and what should be a federal responsibility?
There is no fixed answer to this question. Some things are handled adequately at the local, state, or national level for long periods of time – an then, circumstances change, such that the same functions need to be centralized. When most pollution sources had only local effects, for instance, it might have been appropriate for pollution regulation to occur primarily at the local and state level. Now that so many pollutants have national and even global effects, minimum environmental standards need to be set and enforced a the national, and even international levels. This shouldn’t preclude local jurisdictions (like states) from raising their standards above those minima – it requires only that national government takes the lead in regulating pollutants with wide impacts. The same can be said of labor rights protections. In the wake of economic globalization with increasing international trade and investment, labor rights now need to be harmonized across national borders.
What is the fairest way to redistribute federal resources back to the states?
Policies that ensure that all citizens are entitled to basic protections, paid for by income taxes. A single-payer health care system, for instance, can achieve this. The issue isn’t “should New York subsidize Louisiana?” The issue is, should all residents of the country be provided with access to those goods and services that are fundamental to living a good human life, regardless of where they live?
Will the new tax code have a positive impact on the economy?
The new tax code is apt to provide a short-term bump in economic activity at a time when we don’t need further stimulus, but at the expense of long-term economic problems, such as rising inequality and fiscal cutbacks that will be proposed to pay for the rising deficit in the years ahead.”

Professional Ethics 101

Dr. DeMartino argued for professional economic ethics on Econ Journal Watch’s podcast.

“George DeMartino discusses the emergent field of professional economic ethics—its topics, themes, and numerous nudges for practitioners—as explored in The Oxford Handbook of Professional Economic Ethics (2016), edited by him and Deirdre McCloskey. The conversation relates to their reply to a review essay of the Handbook.”