Donald Trump

On Trade, Trump Is an Encyclopedia of Error

It's all a scam targeting the gullible.

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Trump
Archie Carpenter/UPI/Newscom

Donald Trump is not a professor, but for years he will be yielding insights to every student of economics. His Tuesday address on trade did a masterful job of combining antiquated fallacies with misinformation and ignorance to create an encyclopedia of error. Instructors have never had so much free help constructing their lesson plans. 

The vision Trump conjures is one of alluring simplicity. He promises to achieve "economic independence" by abandoning globalization, instead using American workers to produce American goods. This change, he said, would "create massive numbers of jobs" and "make America wealthy again." 

It's a scam, skillfully pitched to fool the gullible. His framework is a house of cards built on sand in a wind tunnel. Its most noticeable feature is a total divorce from basic economic realities. 

He scoffs at those who warn he would start a trade war. "We already have a trade war, and we're losing badly," he said. But what he objects to is everyday global commerce, which is not a form of war. It's a form of peaceful cooperation for mutual advantage. 

In a war, the Japanese drop bombs on Pearl Harbor that we don't want. In trade, they sell us TV sets and cars that we do want. See the difference? 

In war, both sides lose, because their people get killed. In trade, buyers and sellers in each country win—which is why they trade with each other. What's true of individual consumers and producers is also true of nations. 

Trump, however, thinks our economic troubles stem from the destruction of manufacturing production and employment, which he blames on foreign competitors. He's wrong on every point of this addled argument. 

In the first place, the expansion of manufacturing jobs is not synonymous with prosperity. As countries grow richer, manufacturing's share of employment declines. South Korea, singled out by Trump for killing American jobs, has seen it shrink by nearly half since 1991. Japan and Germany have followed a similar path. 

But U.S. manufacturing output is 54 percent higher today than in 1994 and 27 percent higher than in 2001. Those years are pertinent because 1994 was the year NAFTA took effect and 2001 is the year China gained entry to the World Trade Organization—events Trump portrays as catastrophic for American industry. 

Manufacturing jobs have vanished not because we don't manufacture anything but because companies have learned to produce more goods with fewer people. Higher productivity is what eliminated most of the jobs Trump mourns. He's no more capable of restoring them than he is of bringing back the dodo. 

"NAFTA was the worst trade deal in the history of this country," he exclaimed. But he gives no sign of knowing what it actually did. The main provision was removing import duties among the U.S., Mexico and Canada. Before, the average tariff on Mexican goods coming here was 4.3 percent—while the average tariff on U.S. goods going there was 12.4 percent. 

So under NAFTA, Mexico had to cut its import duties much more than we cut ours. Even by Trump's logic, how could that have been bad for Americans? 

Trump would have us believe that producers abroad succeed only because they have a free hand to cheat. "When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians have proven … they do nothing," he charged. 

Wrong again. At the moment, the U.S. government is punishing allegedly unfair trade practices with special duties on 338 different imports—nearly half of them steel products. 

Blaming Mexico and China for the fate of our steel industry is like blaming email for the decline of telegrams. The biggest reduction in steel jobs came before the globalization of the past two decades. The number fell from 450,000 to 210,000 in the 1980s. 

The total today is about 150,000. Even if Trump could manage the impossible feat of doubling the number of steelmaking jobs, it would be a blip in the overall economy—which adds more jobs than that every month.

All he would achieve by putting up trade barriers, imposing tariffs and treating our trading partners as enemies is to inflate the cost of imported goods—which would lower the living standard of every American household. 

A Trump presidency would be useful for economists because it would serve to refute his misconceptions about trade—just as a massive mudslide in Los Angeles is useful to physicists in dramatizing the power of gravity. But everyone else is advised to flee.

© Copyright 2016 by Creators Syndicate Inc. 

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  1. “Encyclopedias are for losers and weirdos. While they are looking up facts with which to fool you, I am making tremendous deals.”

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  2. Economics is so boooring. Why don’t we just give everyone infinite money so everyone is rich and doesn’t have to work?
    /4 year old or average voter?

    1. The average voter isn’t stupid enough to think everyone can be made rich by giving them infinite money. All they ask is that everybody be given the basic free stuff – healthcare, education, food, shelter, good jobs at a good wage, a secure retirement – so everybody can be above average. Is that really too much to ask?

      1. Exactly. Especially in The Wealthiest Nation On Earth??

        1. Robots will do everything. Just like on Wall-E. We should do that.

          1. They already are, in a sense. The Progressive/Trumpet view ignores increased efficiencies in manufacturing, with robotics and automation in general being largely responsible. Per worker productivity is at an all-time high.

      2. Nice Gaussian distribution. Be a shame if something happened to it.

        1. /takes a magnet to Gaussian distribution….

      3. Isn’t this the same thing, only made discreetly?

  3. Wouldn’t mind some citations on the numbers (yeah, I guess I could look them up myself), but otherwise a fairly succinct evisceration of the most common arguments I see from Trump supporters.

    1. Agreed. cites please reason.

  4. “It’s a scam targeting the gullible”

    This isn’t a surprise to anyone here, is it? At least I hope not.

    Friedrich Hayek talked about why the worst rises to the top, precisely because of the gullibles.

    Keep calm and drink tea.

    1. Just to clarify, it isn’t that the gullibles that put the worst to the top. But it is this exact practice of fooling people that has allowed the worst to rise.

      Let’s be honest, both sides (Dem and Rep) are doing the same thing.

    2. This isn’t a surprise to anyone here, is it? At least I hope not.

      Prepare for your hopes to be dashed.

    3. Stop making dumb people famous!

  5. His framework is a house of cards built on sand in a wind tunnel. Its most noticeable feature is a total divorce from basic economic realities.

    Once again, you miss the appeal of Trump. The *existing* framework is as you describe it, has been for quite a while, and is getting worse. (I’ll wait for the discussion of Hillary’s framework.) So, why not vote for Trump? At least that’s “a little way of sticking it to The Man”, and there’s a *possibility* of improvement.

    1. Faith healing? Sure. I mean it probably won’t hurt anything.

      1. Exactly. Remember “Voodoo Economics”?

        1. Which started as a slur against Reagan from Bush I in the 1980 primaries.

          But keep pushing homeopathic remedies to a bullet wound.

          1. Mind you, I’m not pushing Trump.

            I should have “quoted” the Trumpista’s rationale.

            1. I’m with Go Galt then.

        2. We have to spend money to appease the animal spirits!

    2. It’s difficult to guess, isn’t it?

      We are trying to guess which one of the two candidate would do less damage to the country.

      How about the 3rd option?

      No, the 3rd option is not just to vote for the 3rd party candidate. The 3rd option is to do your part and tell your friends, family and people around you why they should vote for someone else; then ask them to do the same.

      You can choose to participate with the country’s degradation process, or you can choose to be part of the solution forward.

      1. How about the 4th option?

        Go Galt.

        1. Technically, you could pursue the 3rd and 4th option at the same time 🙂

        2. “Go Galt’

          Everyone says this as if it simply means dropping of the grid, or dropping out, or withdrawing your labor.

          But it doesn’t.

          John Galt had a plan. John Galt was simultaneously honing his skills–and those of the others he brought to Galt’s Gulch, and working to undermine the entire structure of the country

          Most of the people who went Galt worked in some capacity towards these ends.

          ‘Going Galt’ means joining the resistance. And it was an active resistance.

          1. John Galt is also a work of fiction.

            1. Thank you, Captain Obvious–I love your commercials!

  6. Trump, however, thinks our economic troubles stem from the destruction of manufacturing production and employment, which he blames on foreign competitors. He’s wrong on every point of this addled argument.

    You only need to point out that the reason those manufacturing jobs exist in other countries is because of comparative advantage and not because of some nefarious behavior by foreign governments or “bad trade deals.” You really need no other economic arguments to show the ignorance behind El Trumpo’s bromides.

    Yet few dare to disagree with El Trumpo because, after all, he knitted together the words ‘Mexicans’, ‘Rapists’ and ‘Wall’ so masterfully. He just needs to say ‘they will marry your daughters’ to finish the two in the one-two punch and make the Trumpistas faint in ecstacy.

    1. You only need to point out that the reason those manufacturing jobs exist in other countries is because of comparative advantage

      Well, that and lower efficiencies.

    2. One of the few things I find somewhat disgusting in this scenario is that Chinese labor is occasionally treated like slave labor oversea’s to produce things so cheaply. That’s their business, I suppose, but it is interesting that people don’t seem to mind that whereas if you suggest we deregulate here in the United States it’s somehow evil to do basically the same thing as our primary trade partners.

      It remains to be seen, last time I checked, if FoxCon will ever actually go for full automation as they keep suggesting. My guess is there are still more than enough proles to grind up building iPhones. *shrug*

  7. It’s the equivalent of the Progressive’s fly-in-amber view of how economies are structured. They must not evolve.

    1. You know who else had an ideology of self-relia…..oh, wait. I see you do.

  8. It is true that the manufacturing jobs have left the country. It is true that the negative financial impact has been great for those directly affected.

    The truth is that the best policy for the country probably won’t be the best for a smaller group of people.

    Yeah, try telling those people free trade is great for the country. That won’t win you the votes, will it?

    1. Yeah, try telling those people free trade is great for the country. That won’t win you the votes, will it?

      That’s why the Founders envisioned and constructed a Senate composed of individuals appointed by the legislatures of the various states.

      1. ^This times a googleplex of googleplexes.

      2. Thank you. Great Grandpa always said that amendment was a mistake. Well he used stronger words and I don’t want to micro offend anyone. I always go fro macro offending.

    2. It is true that the manufacturing jobs have left the country.

      And other kinds have started here. But of course, you’re missing the 80 from the 80/20.

      Ask yourself this: why do we have fewer farmers per capita than we did in 1900 but vastly higher per capita agricultural output?

      Then ask yourself: why is the sky over Pittsburgh blue again?

      1. then ask yourself, if it takes so much less effort and labor to provide this largesse, why does it cost so much?

        why, as things are getting less scarce, are they costing more?

  9. Trump voters are living proof that white people aren’t any smarter than blacks or mexicans.

    1. Sad, but true. Most voters are easily convinced by facile arguments and emotional blackmail.

  10. Trump is an error period.

  11. The main provision was removing import duties among the U.S., Mexico and Canada.

    Really? There are no import duties between the countries? Seems like the treaty wouldn’t have needed to be 1700 pages just to say “There shalt be no import duties”.

    Perhaps you have a citation for this lack of import duties between the US, Canada, and Mexico?

    Or is this claim “a scam, skillfully pitched to fool the gullible”?

    1. So you’d favor doing a round two of NAFTA that lowers import duties even further, would you?

      1. If they’re lowered in a way that benefits the US, then yes.

        It depends which rates are lowered. Are we lowering the rates on what we sell to them the same as the rates of what they sell to us?

    2. Let’s clarify, buybuydandavis, that even if NAFTA is bad from a free trade perspective, that does not mean that Trump is good on trade policy, correct? After all, what he proposes related to trade policy is not something to support, correct? You didn’t bring this up, but it is very related to what you’re arguing.

      1. Conversely, being against NAFTA doesn’t establish that Trump is against free trade.

        After all, what he proposes related to trade policy is not something to support, correct?

        Incorrect. I support it.

        His proposal to lower trade barriers on US goods going into China would be *pro* free trade, correct? Are you against the lowering of trade barriers against American exporters?

    3. I note that no one has chimed in to support Chapman’s claim that there are no import duties between the US, Canada, and Mexico.

  12. There’s no question Trump’s idea about trade are those of an intellectually-challenged child. But Bernie had the same ideas about trade.

    Hillary may or may not be (very marginally) better on trade, but she more than makes up for it by loving war and wanting to double down on it.

    So where is the analysis of Johnson on trade?

    Honestly, if it really comes down to ONLY Trump or Clinton, it won’t matter. They both suck so bad that even Bush/Obama start almost looking good by comparison. As a not-so-wise person once once, “What difference, at this point, does it make?”

    1. Honestly, if it really comes down to ONLY Trump or Clinton, it won’t matter.

      If?

    2. There’s no question Trump’s idea about trade are those of an intellectually-challenged child.

      Not an argument.

  13. How the Free Trade Agenda is knocking down America

    http://www.thenewamerican.com/files/TNA2917.pdf

  14. Can you please cite your sources for the numbers and statistics in this article? Or are they just made up?

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  16. On Trade, Trump Is an Encyclopedia of Error
    It’s all a scam targeting the gullible.

    What?
    Trump the Grump, our favorite fascist, wrong about trade?
    Never!
    The gullible in our country can never be deceived.
    When has that ever happened in Amerika?

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