Wednesday, April 6, 2016

Trump’s Irrational Trade Non Sequitur - C. Edmund Wright

by C. Edmund Wright

I indeed despise the idea of a Presidential nominee who seems to conflate trade deficits with budget deficits -- or at a minimum conflates countries doing business with private concerns doing business.

Donald J. Trump is rich and therefore is a macroeconomic genius and Jedi mind trick negotiator who always wins. So we are told by his legions of anonymous prolific keyboard cowboys on the internet and a lot of talk show hosts who formerly understood economics. If this is correct, he certainly has a strange way of demonstrating that economic genius situation in interviews. This is especially true when he confuses trade deficits and government deficits, as he often does. Case in point is his recent sit down with Bob Woodard of The Washington Post, which I really look forward to parsing in a minute. 

First, as a set up, my fellow American Thinker contributor James Lewis wrote this week that "our colleagues at National Review seem to despise Donald Trump, but they haven't really told us why." With all due respect to Mr. Lewis, and he is due a lot, they actually have told us why. Frankly NRO, including some of the 22 authors who contributed to their anti-Trump issue, lean too establishment at times for my tastes -- but truth is truth and over the past several months numerous contributors from David Limbaugh (defying his brother) to Andrew McCarthy (defying his friend and David's brother) to Kevin Williamson and Jonah Goldberg have indeed told us why. Often. Passionately. Completely. Logically. 

I will continue to do the same, and I'll start with the fact that I indeed despise the idea of a Presidential nominee who seems to conflate trade deficits with budget deficits -- or at a minimum conflates countries doing business with private concerns doing business. The Socialists already have their entry on the Democrat side from this belief system.

And yet, that same intellectual SNAFU was merely one of the big piles of nonsense the Donald stepped in during the Woodard interview, and that fact cannot be changed by his net worth. 

Here is just a snippet of their exchange, picking up right after Trump himself broached the subject of vaporizing the National Debt.
Trump: “I think I could do it fairly quickly, because of the fact the numbers…” 
Woodward: “What’s fairly quickly?”
Trump: “Well, I would say over a period of eight years. And I’ll tell you why.”
Woodward: “Would you ever be open to tax increases as part of that, to solve the problem?”
Trump: “I don’t think I’ll need to. The power is trade. Our deals are so bad.”
Woodward: “That would be $2 trillion a year.”
Trump: “No, but I’m renegotiating all of our deals, Bob. The big trade deals that we’re doing so badly on. With China, $505 billion this year in trade. We’re losing with everybody.”
Oh dear, what a mess. Where to start?

First, Trump says that because we have a trade deficit with China that "we" are "losing to China."  This is taken for granted by millions of economically challenged internet drones, not to mention a handful of rich talk show hosts who know better. And yet, this explanation is proof that any purveyor of this opinion doesn't understand trade. (Mr. Buchanan, call your office.)

First, "we" don't trade with China, or Mexico or Japan or anyone else. Free American citizens, American companies and American investors like to buy goods from these places. Are we to believe that we as citizens and business owners are too stupid to make wise decisions without Daddy Donald approving of our deal? Is it a fact that when an American company buys a foreign truck that will allow it to earn a profit and hire people and create equity in this country that someone is losing?

That is beyond preposterous on its face.

And yet, if you support Trump, or Bernie Sanders for that matter on trade, then you have answered, "yes" to the questions above, even if you don't realize it. Especially if you don't realize it. 

What happened to liberty and the freedom to make buying and selling decisions that work for your company or your family? What happened to the notion that both parties in a deal can win?  When I bought this laptop from the Apple Store, Apple won -- but so did I, as well as the American mall owner and the American sales person and the American Genius Bar employees who help me out. 

This is called free enterprise.

I think it is illustrative, and disturbing, that Trump appears to think that there is always a loser in a deal. That's really not how most of the world works, and it certainly shouldn't be the driving principle behind government. 
Secondly, it's apparent Trump thinks renegotiated trade deals are some kind of magic elixir that's going to rapidly solve our economic woes and allow many over taxed and over regulated companies to re-employ millions of out of date over paid and under worked union members in the Rust Belt.

It won't. 

Even if it did, it would hardly move the needle on the budget deficit. 

These workers were out of work because of the taxes, regulations and union work rules in the first place. That's where this needs to be addressed. And guess what? China didn't have a damned thing to do with any of it, and China's got precious little to do with any solution. China is not our problem. Our own liberalism is -- and China merely takes advantage of that. And yet Trump rarely if ever mentions any of that. 

So not only is Donald's math absurd, his reasoning is out of the New Deal era.  

Third, this notion that the President is in some smoke filled room hammering out trade deals with the Chinese, Mexico, Japan and so on as part of his job description is just, well, almost humorous. The idea that Super Trump could swoop in and make America great again instantly at the table is cartoonish. And yet, this is largely what passes for pro Trump economic discussion in many circles. 

Fourth, the idea of cronyism and government picking winners and losers was at one point a major point of contention between conservatives and the establishment. There is no single issue that invites just this kind of picking of winners and losers than the ability to protect certain industries by levying tariffs on certain products. Most Trump supporters insist that Donald is going to jump out of his phone booth and blow up this whole system. He is this system, and his trade policies will by definition expand it. The arbitrary, or worse, corrupt hand of government will only expand under a President Trump.

And it's not just on trade. Trump is a reflexive liberal on almost everything and his solutions almost always originate in the idea of a powerful president using a big powerful government to do great things inspired by his amazing competence. 

He demonstrated that again by attacking Scott Walker with only the finest Daily Beast MSNBC talking points. And who can forget Code Trump and 9-11? Or universal care in Scotland and Canada? Or ethanol in Iowa? Or calling Scalia a racist? 

He comes from the left. It's his template and has been for decades. And dare I say it, this is precisely why I despise not Trump himself, but the notion of him as nominee. If this were not the case, I would welcome such an occurrence. I am pretty sure David Limbaugh, Andy McCarthy and others would concur. Agree or disagree, we have told you why. 

C. Edmund Wright is a contributor to American Thinker, Breitbart, Newsmax TV and Talk Radio Network.


Copyright - Original materials copyright (c) by the authors.

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