e you a little very quick easy set of arguments that are the best arguments about all the tariffs and the situation we're in. So I've heard some good arguments and some bad arguments and I'm going to tell you the ones that look most persuasive to me and most correct. I think in this case when you're talking about economics being persuasive and being right are kind of the same thing and that's not always true but you don't want to mess around with economics right so you don't want to be real persuasive and wrong although you know in politics sometimes that can work out for you but not when it comes to your finances. You want your most persuasive argument to be also accurate.

So let me give you some of the best arguments. I saw Victor Davis Hanson. I always say his name wrong. I feel so bad about it. But I was hearing him saying that if tariffs are bad and all the smart people know that tariffs are bad and that's what we've been hearing right? The critics, everybody knows tariffs are bad. Tariffs are terrible. Tariffs are bad for your country. Then the question would be why does every country have tariffs on us? Are we the only country that if we put a tariff on it's bad for us? Is China going out of business? They've got tariffs.

To imagine that tariffs are bad for a country while every single sophisticated modern country has tariffs. All of them. That's a pretty good argument in favor of tariffs, isn't it? What is the counterargument to that? Once you've pointed out that every smart, successful country has tariffs, everyone. I think there are no exceptions. How can you argue that we're the only country it would be bad for? And is it destroying all those other countries? Doesn't look like it. China seems to be growing. So that's your best argument in favor of tariffs.

Now the other argument is of course that it's primarily for negotiation and that if you look at say Vietnam, they've already offered free trade, zero tariffs. If you look at Argentina, they're also negotiating no tariffs. So if you look at it as a negotiation, it's a slam dunk smart thing to do that's already working because at least two countries have already said yep, no tariffs. We need to get the big countries or it doesn't matter that much, but at least directionally it looks good.

So those are your two arguments. Every country does it and it's a negotiation. So if you like no tariffs, this is how you get there. The only way to get to no tariffs is to put one on the people who you think you can negotiate to get rid of them on both sides.

Then there's the stock market argument. I guess the stock market was down 6.6 trillion in market value. Never, you know, I always tell you ignore any numbers that don't come with percentages. In this case, the percentage is the thing you should look for in the stock market, not the number. But here's the first part of the argument. It is completely normal and completely predictable that there will be 10 to 20% pullbacks in the stock market for any number of reasons. Sometimes it just gets ahead of itself. Sometimes there's some big impact in the country like COVID or something else but there is no world in which you can go for 20 years without a 20% pullback. There's just always a pullback. This just happens to be the reason it's happening at the moment.

So I guess NASDAQ is already down 20%. And that's the most normal thing in the world. If you own stocks and ideally you didn't need to cash them out right away, it shouldn't make any difference to you that it went down 20%. Because I think this would be my third or fourth time in my life, in my adult life, where all my stocks went down 20%. And 100% of the time they came back.

So the first argument about the stocks is that if you didn't sell it, you didn't lose anything. And 10 to 20% correction is completely normal for any number of reasons. This just happens to be the reason right now.

Then I'm going to give you another argument that I worry might cause you to buy or sell stocks based on this advice. This is not advice. This is not advice. But I'm going to give you a frame because we're in such an unusual situation. If the stock market continued to go down and we got into a great depression, the value of stocks would be even better once we were in the depression. If you had bought stocks at the depth of the Great Depression, you would have done great. Sir John Templeton did exactly that. He's one of the greatest investors in American history. And he started during the depression and he said to himself, huh, either the entire country is going to go to hell, in which case nobody's money is worth anything. It wouldn't matter if you had your money in your mattress or in the stock market. If it all goes, your money's worth nothing no matter what.

So this is one of those situations where you could imagine it's leading to complete ruin of the United States. So should you invest? I don't know. Where else are you going to put your money? Would you put it in some other country? If the United States was going to go down the toilet and just be completely out of business, that would take most of the world with it I think.

So you have one of these weird situations where it seems like things can't get much worse, but if they did get worse, it wouldn't matter where your money was, it would be gone. It wouldn't matter if you were in bonds or buried it in the backyard. It wouldn't be worth anything if everything else went to hell. So I'm not going to tell you this is a buying opportunity. I'll just disclose that the last thing I would do is sell my stocks now. That's the last thing I would do. But I'm not a financial adviser. Do not take any financial advice from me. It's not advice.

Then there's the argument that the only people being hurt are the wealthy because it's the top half of the economic United States that own stocks. There's almost nobody in the bottom half that owns any stocks and the top 10% own I don't know 88% of them or some crazy number. So if what Trump is doing is reforming the United States economy such that it brings back more manufacturing jobs then that would be great for the bottom 50% of the country. And ultimately it would be great for the top half as well. But in the short run, the people at the top are going to take a little scare. And the scare is, well there goes 20% of your money, but it's not really gone as long as they can ride it out. And rich people can ride it out generally.

Then there's the jobs argument. You probably saw that the jobs report was unexpectedly terrific, but this was before the tariffs were announced. They were certainly threatening for the last month. Everybody knew they were coming, but the US added 228,000 jobs and that was way above what we thought it was going to be, 140,000. Now I would say the best argument about jobs is that it didn't have much to do with either president. Probably wasn't because of Biden. Probably wasn't because of Trump. Probably just the economy sometimes has a good month and so I don't think it predicts anything about tariffs. It doesn't say that the tariffs are a good idea or a bad idea. Doesn't tell you that it'll be the same next month. It's just sort of good news for March because it could have been worse, but it does show a little bit of strength which is a good time to do the tariff stuff.

Then there's the inflation argument. The argument that the tariffs are going to cause inflation because isn't that what happens when prices go up? It's called inflation. But apparently we have a history that shows that past tariffs, because we've put tariffs on before, didn't increase inflation. And the people who are smarter than me say the only thing that increases inflation is printing money. You don't increase inflation by tariffs.

Now that might be counterintuitive because you're saying to yourself but my goods and services, well goods will cost more. How is that not inflation? And the answer is that there are individual price increases that would be real, but that the economy adjusts. It adjusts fairly quickly and you would have alternatives. So if you said but the cost of my German car went up 20%. I say to you, well why don't you buy a Ford which is giving you now the employee discount is cheaper than it used to be. So you could have an option of spending less if you're okay with American choices over other choices.

The other thing is in the long run of course if manufacturing comes back and we can make our own products prices could drift down potentially but also if food and energy prices went way down your overall inflation rate would look pretty good. And it turns out that if we make and sell all of our food to Americans instead of selling some of it overseas, it might actually be cheaper. So food prices could go down. Egg prices are down. We might find the food prices are not that affected by the tariffs. But oil had just reached an all-time low. If every one of our goods and services went up in price but oil went to an all-time low, it might cancel out because oil and energy is one of the biggest expenses that goes into any product. So you might end up finding out the economy looks like it took a big hit which causes the demand for oil to go down which causes the products to cost less.

So the argument on inflation is that the only thing that causes it is printing money, and that tariffs can cause individual prices to go up in the short run but it doesn't cause inflation in the long run. That's the argument.

Then there's the trade deficit argument where most of the countries we're dealing with, they sell us way more things than they buy from us. And I've seen two arguments from smart people. One said the trade deficit is nothing you need to worry about because it's just numbers on a piece of paper and it doesn't matter that we're buying more than we're selling. I'm not sure I buy that. The other argument is the opposite. This says over time if you're only buying more than you're selling then you're probably printing money to cover the difference and you're basically going to be out of business eventually. And we may have reached eventually. So I do think we have to figure out that trade imbalance thing. So I think the best argument is you can't go forever with trade imbalances, but you can definitely go for years as long as you're willing to print money to make up the difference and we've reached the end of that working. So we're probably at the end of that working. So trade deficits we probably do have to fix.

Then there's the Smoot-Hawley Tariff Act of 1930 argument. And the argument is that when the US put tariffs on other countries in the 1930s, it was one of the triggers to create the Great Depression. Now the problem with that argument is that it's an analogy, right? Even though you say to yourself well it's not an analogy. It's exactly the same thing. It's putting tariffs on things. But no, this is not 1930. There are too many differences. The biggest difference is that I wasn't there in 1930. But these tariffs are primarily for negotiation purposes. Was that true for Smoot-Hawley? When Smoot-Hawley put their tariffs on, did five countries immediately contact the US and say hey how about we all drop all of our tariffs? Because that's what just happened with these tariffs. So I don't think you can compare a country that was teetering on the edge and wasn't using it for negotiating with whatever is happening today. There would be just too many differences.

And then you might remember as a cynical Publius who's on X, a great account to follow. Cynical Publius argues that back when Gore was arguing with Ross Perot about NAFTA, Gore argued that NAFTA was a good idea and Perot was saying there would be this giant sucking sound that would suck the industry out and Perot was right. So apparently Perot's argument that we should have some trade barriers which you would think typically would be bad probably was right. So when you think about things that limit trade you can't really just compare 1930s to today. There are just too many differences.

Some are saying that I saw the Wall Street Journal had an opinion piece that China had a good week, meaning that things are looking good for China because they just have some kind of negotiating advantage. And they kind of do. They kind of do. So one of the things China has, as I mentioned, is the TikTok thing. Trump has a lot riding on the TikTok deal because I think one of his biggest funders is an owner of it and needs some kind of an exit or some kind of a deal to not lose all of his billions. And Trump's put his reputation on it and now China just yanked it back. So now they have something to negotiate with in addition to the tariffs themselves.

So then there's also the China has those Panama ports that we don't want China to be controlling. But I don't know, does that work for China or against it? Because we could always just go in there and just take it and I don't think China would start a war over it. So that's part of the negotiations.

But I saw today a source that said that China's exports, only 15% is to the United States. And then I said uh oh. Uh oh. That means that they're not dependent on selling things to the United States. It's only 15% of their exp