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Free-Market Donald
Donald Trump was the most free-market-oriented president we’ve had since Ronald Reagan, and the economy showed it. Probably because of his rhetoric, many people don’t know about the Donald’s free-market proclivities. The people that don’t know about it seem to fall into two major categories:
- Ardent Trump supporters.
- Ardent Trump haters.
Protectionism prevents President Trump from being a free-market purist, but he was more marketed oriented than his four predecessors. Some, though not all, of that protectionism was justified for strategic and moral reasons.
It was the free-market side of his policies that made the economy roar. Rich, poor, corporations, workers, and people of all races benefitted. Not to mention all 37 genders. Of course, the Left will reverse it all in the name of Compassion.
It is heart-breaking to see Trump’s strongest supporters reject the free market.
Exhibit A is Tucker Carlson. Tucker has many virtues, particularly his Limbaugh-esque ability to highlight the Left’s absurdities. Tucker is an asset to conservatism, but he’s out to lunch on economics. I’m grateful it was Trump, and not Tucker, managing economic policy during the Trump years. Another example is Pedro Gonzales, who writes for American Greatness. Mr. Gonzales likes to blame all kinds of things on the free market, including the Texas power outages.
Many Republican Trump-haters see themselves as free-market supporters. Some are, but many supported Bush’s re-regulation of the economy and the bailouts he did at the end. They couldn’t distinguish between capitalism and crony capitalism.
And then there’s the oleaginous Mr. Romney … Where do I begin?
There will be many debates about what aspects of Trumpism we should keep. Willingness to fight back should be at the top of the list, and support for free markets should near the top.
Free market concepts might not get us elected, but their abandonment will get us un-elected. People respond to results, and screwing up the economy is always bad politics, especially for conservatives.
Published in General
This would waste capital and retard human flourishing. This is why the dumbest illegal immigrant is better off here. The crappy countries they come from can’t get the most out of them.
The problem is, all of the governments and financial systems are inflationist in an extremely deflationary world right now and it’s total upheaval to do what I want to do. Everything changed because of technology and the cold war going away. It also doesn’t help that people don’t want to procreate anymore.
Everybody who? Domestic citizens? All the nations of the world?
My objective is to maximize my opportunities for a Good Life. That generally means what’s good generally is also good for me, and since life isn’t a la carte sometimes I have to go with a system that isn’t maximized for me in every particular but which produces a net positive. Prosperity is only one component of that, but I have to say that maximizing consumption probably doesn’t figure into my conception of prosperity except in the sense that balance maximizes both sides of the equation.
I have listened to it, but I wouldn’t mid going back for a refresher.
I mean everybody in the United States.
This is what that Mike Green interview gets at. He fully admits that it isn’t going to happen until after another financial crisis and you get intelligent people talking about it.
Which would reduce human flourishing and waste capital? Producing, saving, or investing?
I don’t really care about the dumbest illegal immigrant and where he is better off, when push comes to shove. I care about me and my family, my neighbors, my city, my state, fellow citizens, only then is there room for the world. I don’t care if some guy in some other country is getting the most he can or giving the most he can.
I’m just illustrating what is good about a more free economy.
Autarky is very hard to pull off.
I’m just saying it’s better to work with the deflation from automation and globalized trade. It would be better for everybody. You are saying something else.
We really did hollow out many areas of the country because of stupid trade and monetary policy, so I think Steve Bannon is right about most of the stuff at this point. 30 years ago we had better options.
Whatever Steve Bannon says, I am for.
What happens to all that production if people are told to consume less?
I like the idea of a consumption tax and the elimination of income and payroll taxes. I’m not a fan of a VAT tax, but a one-time tax at the point of final purchase. One could argue if secondary sales should be taxed or not, but if one eliminates income and payroll taxes, then anyone working gets a 15% raise (well, assuming that the employer gives them the money they are paying in payroll taxes), and if one gets rid of the FICA withholdings then people get even more in each paycheck.
Consumption taxes can be regressive, but I think that the idea of forgiving each taxpayer from all consumption taxes for the $X (say up to the poverty line) would resolve that issue.
Production precedes consumption. Then you get more consumption in the future. If you have natural interest rates, no interference from the central bank, this takes care of itself.
Politically, this is very difficult to set up. Keynesianism.
I think the Austrians say that there is so much more output and prosperity this doesn’t even matter.
The income tax was a huge mistake. The corporate tax is even worse.
I’ve heard that the combination of discretionary central banking and the income tax is a disaster.
I think it works it’s way out in the end. Exports increase consumers, as well.
But if other countries are smart like us, they’ll want their own production, not imports.
This all seems to have the same problem as children: if children grew up to be what they wanted to be as children, we’d all be firemen and ballerinas. (or something.)
I’m not telling anyone to consume less, and no one has to listen even if I did.
What happens to all what production? I don’t know. Could be that foreign production drops significantly and domestic production increases slightly. Could be a million different combinations. Here’s what I think I do know, though. I know that I’d rather have an economic engine in my community than not. I know that cheap goods are not a long term substitute for an economic engine in my community. I know that services alone aren’t sufficient either.
Yes other countries want their own production, not imports. That’s already true.
Not under a deflationary monetary regime, which is the way God intended us to live.
I think the term is “competitive advantage”. Each country has to do what they can based on their resources. We are a higher level country and we should capitalize on that.
The issue is inflationism. This is why I recommend that you listen to Steve Bannon on this stuff.
If a capitalist pours money into reopening an empty factory, obtaining machines, raw materials, government permits, hiring and training workers, etc. because he believes that, perhaps years later, he will get back more than he put in (if he ever does: see Ford Edsel); he is unable to invest the same capital in other productive pursuits. This is what “opportunity cost” means.
The reason capitalists aren’t doing that is they would lose their money. (See: Solyndra.)
Doesn’t that mean that the capitalists were actually doing it right? They could see that Solyndra was a scam, only Obama et al were stupid enough to buy into it. (Not using their own money, of course.)
But a business that could actually be productive, is a different story.
But yes.
Taxing consumption is fine in that it encourages savings, but when consumption is forced by inflation, it is a trap: you spend today to retain the value of your earnings, but then you are taxed of the benefit of spending now.
Deflation is good. Inflation debases purchasing power. Wages do not keep up with inflation. In 1960 a can of Campbell’s chicken noodle soup was I think 6 or 8 cents a can. Now you don’t even have a ₵ character on your keyboard. And a can cost today? $3.00? Maybe a $1.50? (I don’t buy soups much.) At a dollar fifty that’s roughly 20 times the cost due to inflation. And everything else has gone up by 20 times in the past 50 or 60 years; houses, washing machines, cars, food.
One thing that hasn’t gone up this much is minimum wage. In 1960 the minimum wage was $1 per hour. Today it is what? $8 or $9 per hour? Which has only risen 8 or 9 times. Even a $15 an hour minimum wage does not make up for the shortfall. And to make things worse, in 1960 most households were single-earner; today most households to maintain purchasing power by being double income.
One $3,000 a year job in 1960 would buy as much as two $30,000 annual salaries today.
Yes, I know. That’s not what I’m talking about. I apologize, I think my inarticulateness strikes again because I’ve tried to make clear the distinctions I’m making and the concept I’m arguing against and I seem to be failing. The motivations and incentives of individual capitalists is not what I’m talking about.
Having a factory in my community is a net benefit to me and the whole community, especially compared to an empty building. True or false? I, and my fellow citizens, want a factory (as many as we can get) in our community independent of the preferences of individual capitalists or consumers as a whole. True or false?
I’m late to this conversation, but I think that the reason capitalists aren’t investing in manufacturing is because the pay-off in the stocks casino is paying off so well. And paying off in a cycle of higher and higher prices, which leads to higher and higher investment. But the P/E ratio is horrendous and the market is very infirm. If the Fed raises rates, the “free” money banks and investors borrow to play will trim the margin and shut off a lot of investing. Then with less investing, comes lower stock prices. And this vicious cycle could mean a lot of “creative destruction” in the financial markets.
Stock buybacks. Financial engineering. All funded by debt. This wouldn’t be happening without such bad federal reserve policy. It’s terrible for the future.
I’m also not talking about the individual producer perspective. I’m talking about “us” and where “we” would like to be as a country and as communities, and how to get there without attempting some counterproductive command economy.
Otherwise, no I’ve heard people argue that we don’t want to build iphones here, or textiles, or whatever. Doing so would put our labor and capital to work on lower value efforts than where they’re currently employed. It’s that proposition that I simply do not believe and I simply do not understand. After so many comments here, though, I’m also worried that so many conservatives apparently don’t even recognize what I’m saying, don’t think about the perspective of actual communities or political entities. I understand the dangers that conservatives are so wary of. I do, but there’s a universe between communism and setting levers, dials, and switches of policy – which we have to set one way or another anyway – to the position where we’re getting closer to societal health.
In It’s A Wonderful Life Sam Wainwright is looking to open a plastics factory. He’s considering Rochester until George Bailey recommends Bedford Falls. Why would George Bailey care? Why does he want that factory in Bedford Falls when he won’t have any ownership or financial interest in it? Why does George care that the factory that had been in operation there was inactive?
Because he owns the land best suited for the factory? Just kidding. All productive work produces goods and income. And investors can get a return, some at 2%, some at 3%, and some at 4%. But even 2% is good in a deflationary economy. And if there is a constant number of dollars, and a constant surplus in goods produced, as supply increases prices will naturally drop, and the dollar will get stronger and stronger.
If you want to export this surplus, then the money supply will expand (from overseas) slowing deflation but increasing wealth, and supply will be reduced (slowing or stopping deflation).
Any increase in wealth is in itself inflationary until the increase in wealth stops. But it will all eventually equilibrate.
Highly simplified, there are two things contributing to limited production in America (maybe a third):
1) Government policies – like epa and other regulations, corporate taxes, minimum wage laws, and Unconstrained unions that are allowed to cannibalize business.
2) Capitalists deprioritizing their own communities in relation to maximizing profit – there’s a big range between maximizing profit and not making a profit. Big range there (well, industry specific).
Most of the conversation surrounding this should be centered on policy. What individuals would choose is secondary to whether we have governing policies that make the 2nd viable.
And Trump promoted policies that made the second more viable. He also promoted some that didn’t (minimum wage increases).
We should limit this to policy and not guilting business owners – unless they support policies that make us more hostile to production.
There is plenty to fight for in policy making that aligns with conservative values. We should promote those and find ways to make them politically winnable.
I might have gotten back here too late. Quite a discussion going on here!
I’d like to throw a few things on the pile.