Trump’s Irrational Trade Non Sequitur

Trumpby C. Edmund Wright4/5/16
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 WTFthat 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.


CEdmundWrightC. Edmund Wright is contributor to StubbornThings, American Thinker, Breitbart, Newsmax TV, Talk Radio Network and author of WTF? How Karl Rove and the Establishment Lost…Again. • (1311 views)

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30 Responses to Trump’s Irrational Trade Non Sequitur

  1. Tom Riehl Tom Riehl says:

    So, if he is the nominee,who are you going to support? That is the essential question. All else is commentary. The only alternative is Cruz. How does he compare?

  2. NAHALKIDES NAHALKIDES says:

    I’m not going to suggest that Donald Trump could fix all our economic problems by negotiating trade deals, or that I have the answers to these knottiest of policy questions, but I am going to say that the anti-Trump side oversimplifies the case for “free trade”.

    First, they often take the Libertarian point of view, and when you find yourself doing that, alarm bells should be warning you that you may be on shaky ground. Assuming arguendo that government could, through tariffs or other trade policy, benefit America at the expense of foreign nations, it should certainly do so. This is hardly the same thing as “picking winners and losers” from among American citizens.

    Second, they promote free trade theories under conditions vastly different from those considered by the classical economists. Suppose we have only three American industries, A, B, and C, and China or a group of three nations can undercut all three of them because their labor costs are much lower (due to the fact that foreign labor is willing to work for much less than American labor and not, or not entirely, because of American labor and environmental regulations). Free trade under these conditions is going to be bad for us, because with all domestic industries A, B, and C unable to compete, Americans are either going to be out of work or have to watch their standard of living fall to third-world levels.

    Yes, there are more than three industries, but only a finite number, and if all or many of them can be undercut by cheap foreign labor, we’re in trouble. The classical answer is that we would simply compete in other industries, and that may simply not be possible. At the very least, it would be nice of the free trade absolutists to acknowledge that the times are fraught with peril for the American worker.

    Third, what they are calling “free trade” is in fact managed trade by way of agreements that are hundreds of pages long. These agreements are written by lobbyists and lawyers, and the average American should be forgiven for suspecting that his interests will be sacrificed to those of the powerful special interests who employ these people and who command the attention, if not the subservience, of the Republican Party.

    Therefore, I will suggest that Edmund and the NRO writers are attacking Trump in a way that was always unlikely to have much success, and which in fact seems to have done far less to slow him down than his own big mouth. For Trump at least seems to be taking the side of the ordinary American, while the GOP Establishment as usual is only listening to large business interests. That is the problem that led to Trump’s rise in the first place.

    I agree that most of our economic woes are caused by problems other than trade policy, specifically excessive taxation and regulation, but that does not mean that Republicans should not be trying to show the average American that they are more concerned about him than with their mega-donors who favor highly-managed trade deals.

    • Kung Fu Zu Kung Fu Zu says:

      Thanks for writing this Nic. Like you, I am not Trumpkin, but when I first read this, I almost responded. But I sometimes tire of responding to the same simplistic one-liners foisted on an unsuspecting public.

      “Free Trade” has become something of a religion for some. That there is no such thing as “free trade” does not seem to keep these people from claiming America is a big “free trader”. This is complete nonsense.

      One not-so-small example is the billions the Federal Government pours into agricultural subsidies. This helps “farmers” export huge amounts of produce of one sort or another. I would like a “free traders” to explain to me how this is different from what they claim other countries do.

      As to how “Free Trade” is such a great thing for America, I would also like to know what free traders would suggest we do when countries, through government support, build up such huge capacity in certain products that they are able to under sell our domestic industries? Are we simply to allow that country to send America such products until our domestic industries are destroyed?

      As to production costs, I have for years told Americans that they will not be able to compete head-to-head with the Chinese worker. The Chinese will work like a horse, live like a dog and save like a squirrel. American workers will not put up with anything like what a Chinese worker will accept. That’s simply fact.

      Just for the record, Hong Kong and Singapore come closest to having free trade.

      And as for the statement,

      “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.”

      If countries don’t “trade” with each other, why do “we” keep balance of trade information? If countries don’t trade with each other, why are we so concerned about the fluctuation of national currencies? If countries don’t trade with each other, why did the United States stop allowing foreign countries to exchange greenbacks for gold? Why are Certificates of Origin necessary in international trade if countries don’t trade with one another?

      Wright’s claim sounds a little too much like the libertarian assertion that there is no such thing as society, only individuals.

      • NAHALKIDES NAHALKIDES says:

        Glad to do it, KFZ. And like you, I thought Wright’s claim had a very Libertarian bent, as if there were no societies, no countries, and no borders, and everyone had the “right” to engage in any sort of foreign commerce he wished, even if it was destructive of his own country.

        • Kung Fu Zu Kung Fu Zu says:

          Nic,

          One thing I note about these “Free Trade” zealots is the way they speak with such authority. I seriously doubt whether they have ever taken part in international trade or understand how it actually works.

          Most of my adult life has been spent in international trade, that is the actual movement of goods across international borders. I think I may have a slightly deeper understanding of it than many of these people.

    • Timothy Lane says:

      This has been my concern about free trade. I’m well aware of the theory, having taken a course on the subject in college (where I minored in economics). But it has long occurred to me that while “the economy” benefits from free trade, that doesn’t mean all parts of the economy benefit. This is especially true if a large number of countries each target a single industry for devastation. They might not benefit overall, but their industries do, and the net result is that we buy foreign goods with accumulated money reserves — which is fine for those with unlimited money available, but not for the rest of us. And, as you point out, genuine free trade agreements don’t need to be hundreds of pages long.

      • David Ray says:

        Only our tax code needs to be hundreds of pages long. After all, that’d be a benefit in that the code is currently THOUSANDS of pages.
        (Only question is if it has past 100,000 yet.)

        • Timothy Lane says:

          Perhaps the IRS should be required to send a copy of the entire tax code to every household during tax season. It would be a very salutary lesson.

          • Kung Fu Zu Kung Fu Zu says:

            Delivering the code by hand would be even more of a learning experience. And it would keep them on the streets and out of our hair.

  3. Steve Lancaster says:

    There is not any real free trade going on in most of the world. In one way or another trade is the sole province of the state, either through trade agreements relating to taxes or tariffs. I doubt that anyone can prove any American jobs have been lost to Mexico or China and we do benefit greatly from production done out of the clutches of our unions. However, the theft of intellectual property and technology is a serious problem, walk the streets of Hong Kong, Singapore, or Mexico City and note the supposed brand names that are often copied and sold as the real item.

    I think someone as knowledgeable as Trump and Cruz understands that free markets are very ephemeral mostly thanks to government intervention. Even Sanders and Clinton may understand this but in their case they don’t care for either philosophical or monetary reasons.

    • Brad Nelson Brad Nelson says:

      we do benefit greatly from production done out of the clutches of our unions.

      I think that’s undeniable true and a point often missed in the heated rhetoric of the subject.

      And I think Nik is right that what we’re seeing is “managed trade,” whether by the supposed free trade agreements or government internal policies. The historic and proper role of the U.S. federal government is regulation (to make regular) of trade, not picking winners or losers, and not “managing” trade to try to forward a narrow social policy…in particular, a Leftist utopian one.

      As a private citizen, I am of the mind in regards to buying products and services that I am acting as an individual, not as a society. True free trade is based here. But what we’re obviously dealing with is something more complex. The choice isn’t about what some Chinese worker does with the dollars I send him. I would hope he would turn around and use my products or services. The larger issue is what the nation (who “manages” the trade) will do with those dollars.

      Both factors are relevant. Socio-pathic trade, free of any moral constraints, will tend to tell you not only that moral considerations are irrelevant but that trade itself is the greatest good. These types will tend to tell you that there should be no trade restrictions on terrorist states such as Iran, for example.

      We’re sort of caught in that vice with China. Individuals and companies find it enormously beneficial to trade with China. It’s the reason iPhones are $200 (or whatever) instead of $5000. But that money is going to a kinda-sorta evil empire. The same thing regarding our trade with the Middle East. We are paying for the undermining of our societies via petro dollars.

      So there is, and ought to be, a political/moral calculus in trade. Unfortunately, the people in high office, or looking to get there, are almost to a man or woman low-information and low-moral candidates, including Trump. They’re fast with the rhetoric but show absolutely no real understanding of the problem. And much of the problem isn’t China, per se, it’s our own job-killing regulations, taxes, and other burdens (including the incentivizing of sloth through welfare).

      And regarding free trade, it should go without saying that penalties and other sanctions will be handed out to those who steal patents. Because theft is not trade. It’s just theft.

      • Kung Fu Zu Kung Fu Zu says:

        What you see coming out in this discussion is that “trade” is much more complicated than the “Free Traders” appear to understand.

        Unfortunately, the people in high office, or looking to get there, are almost to a man or woman low-information and low-moral candidates, including Trump. They’re fast with the rhetoric but show absolutely no real understanding of the problem

        I generally doesn’t pay for them to look too deeply into the subject. They might have to question their positions if they did and that could cost them.

  4. Brad Nelson Brad Nelson says:

    Thomas Sowell has an article that sums up the essence regarding objections to Trump:

    A headline on Bret Stephens’ column in the Wall Street Journal — “Trump Is Obama Squared” — hit the nail on the head. After seven long years of disaster after disaster, at home and abroad, under the Obama administration, have we learned nothing about the dangers of choosing an untested candidate for President of the United States on the basis of his saying things we want to hear?

    Elections are not held to make us feel good at the time, but to select someone with the depth of knowledge and character to be entrusted with our lives and the future of the nation.

    • Timothy Lane says:

      I’ve noticed myself the all-too-many similarities between Trump and Obama. To a great extent, it comes down to both being extremely narcissistic. Both make a big show of their concern for others, but this is clearly false in Obama’s case and there’s good reason to fear it’s also true of Trump. Of course, Slick Hilly isn’t any better.

      • Brad Nelson Brad Nelson says:

        Indeed, the best argument for Trump: “Hillary isn’t any better.”

        • Kung Fu Zu Kung Fu Zu says:

          Sigh.

        • Timothy Lane says:

          My concern is whether or not even Slick Hilly is worse than Trump. Note the speculation Rush reported today, that Trumpbots admire him for falsely claiming he was cheated in Colorado (and willingly believing what they admit is a lie). IF so, we have something very Clintonesque. Or consider the Trumpbot caller with his totally paranoid view of politics. Trump appeals to the nuts, probably because he’s one himself.

          • Brad Nelson Brad Nelson says:

            Ditto. I hope one of you smart fellows here will write an article about the psychology of a Trump supporter. I certainly won’t (and haven’t) give Ted Cruz a pass when be pulls a boner. Why would I? This should be an election about ideas and competence, not personality and hero-worship.

    • Kung Fu Zu Kung Fu Zu says:

      I have come across what must be either the most dishonest or most stupid “conservative” website. The Gatewaypundit. It is all in for Trump, truth be damned.

      I advise ST readers to spare themselves the pain of reading anything on this site.

      The guy who appears to run the site is someone named Jim Hoft.

      I think his readers are today’s equivalent of the radical “Sans-Culottes” of the early French Revolution and he is their Hebert.

      • Brad Nelson Brad Nelson says:

        Wow. What a waste of space. For the record, anyone should feel free to write a pro-Trump or pro-Cruz article. Write a pro-Sanders one if you’re good at satire. But easy on the kool-aid. That site, Mr. Kung, is lunaticville.

    • Kung Fu Zu Kung Fu Zu says:

      Have you noticed Trump and his posse bitching about how the rules in the Republican primary are corrupt and the game is stacked against them, how things are not fair?

      To my mind, this is simply more proof of Trump being anything but a conservative. In fact, it is an indication that he is a Leftist.

      How so?

      Rules mean nothing to him. He is bigger and better than the rules thus what is best for him is what counts. This thinking is similar to the Left’s thinking about the Constitution, which is basically,

      “Who cares what it says? It is just words and doesn’t deal with today’s realities. Anyway, it stops us from furthering our goals so it can be ignored. We will use it when it suits us. In other words, we will make up the rules as we go.”

      Anytime someone mentions a “Living Constitution” to me, I ask them if they would like to play poker with me and give me the authority to make up the rules while we play?

      • Timothy Lane says:

        And notice that he didn’t complain about those rules in Colorado (which were set in place last August, and modified from last time only because the RNC would no longer let them do a non-binding straw poll as they did in 2012) until he lost. I commented at one point on Town Hall that the dictionary should have a picture of Trump under the word “tiresome”.

        The irony of a “living Constitution” is that it really means the Constitution is dead, which is exactly what liberals want. The key to liberalism (and Trump follows this pattern) is that their sole concern is getting their way — “no matter what it takes”. The late Joseph Sobran pointed this out, and noted that it’s called “teleology” — concern only for results, not for process. A true conservative wants to get his way, of course, but is also concerned about means as well as ends. (The basic point Arthur Koestler was making in Darkness at Noon concerns the importance of means as well as ends.)

        • Brad Nelson Brad Nelson says:

          Good point. For conservatives, the means matter. For liberals, only the ends matter. This is one reason it is quite unlikely that conservatives will ever kill 100 million people as Leftist regimes have done.

        • Kung Fu Zu Kung Fu Zu says:

          A true conservative wants to get his way, of course, but is also concerned about means as well as ends.

          A very simple illustration of the importance of this idea is as follows:

          I want some money to buy a new car.

          If the means of obtaining this money do not matter, I can go out and steal the money. If the means of obtaining this money matter, I should go out and work for it.

          Maybe, this idea is too simple for the leftist wizards of smart.

      • Brad Nelson Brad Nelson says:

        You got it, Mr. Kung. Always ruffling against restraints on one’s ego or appetites is a trait of the Left. Thomas Sowell notes that conservatives have a “constrained” view of mankind and that liberals have an “unconstrained one.” One is a view of mankind as inherently imperfect (his word: “tragic”). The other is utopian. Those who have a perfect vision (by their own estimation) therefore should not be constrained.

        The Constitution is inconvenient for those who want to do what they want. Even the rules that they establish are never sacrosanct. The Left are like permanently rebellious children whose entire shtick is busting through constraints to The Brave New World that they envision. They care not one whit for the supports they are pulling down behind them.

        The idea of a wisdom greater than one’s own ego is unknown to the Left. Clearly Trump is very consistent with this mindset. Any supposed conservative who supports Trump is walking with blinkers on.

  5. Kung Fu Zu Kung Fu Zu says:

    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.

    Contrary to what Mr. Wright states, China is part of the problem. But an even larger part of the problem is deals like the TPP which is a 5,500 page monstrosity negotiated in secret over a period of 4 years.

    Believe it or not, in this treaty the USA would give away its right to renegotiate trade deals with other signatories. All signatories of the deal must sign to amend it. This is in itself outrageous and if not against the Constitution, should be.

    The link below is to an article which gives the lie to the claim that “China didn't have anything to do with it.” Not only China, but just about every other third Asian country or other third world nation.

    I don't blame China, I blame the crony-capitalists who pretty much own both major parties of this country. In this, Trump is correct.

    Everyone should read this article. it.

    http://atimes.com/2016/04/trans-pacific-partnership-under-fire-from-both-right-and-left-in-america/

    • Timothy Lane says:

      When you have a bill that large, you know it’s mostly full of corrupt deals. Of course, it isn’t officially a treaty, nor have any of these trade “agreements” been for decades. A treaty requires a 2/3 vote of the Senate, with the House being irrelevant. These bills, like standard laws, require a majority of both.

      • Kung Fu Zu Kung Fu Zu says:

        What ever one calls it, it is an abomination which attempts to pass more power to fewer hands. Of course, these hands keep the money flowing to the politicians who do their bidding. The New York City/Washington D.C. Axis is an ever-growing threat to the People’s freedom and must be curtailed.

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