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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
As a tool to spin up industry, it worked in the industrial revolution to spin up a textile industry that could compete with England.
As a long term economic tool, tariffs are a dud. They are a tool. Not to be abused but have their purpose.
For instance, tariffs should be used to even out the price differential between our country and countries that have actual fascist policies and the lines between business and government are more blurred or who engage in slave labor. Both of those things lower the cost of production, make things cheaper and more attractive to consumers for the lower price.
Putting tariffs on such goods makes our products more attractive and gives our companies (or another country’s) a shot at competing against such foreign policies.
Not bad. We have to think about side effects though. Let’s say we didn’t have the tariff and the domestic textile industry didn’t spin up. Americans would have paid less for their clothes and more resources would have been available for other things that would have made the gilded age even more gilded.
You have a point, because the South was recovering from the Civil War and all that went along with it. The former slaves also needed work, and the tariff might have helped in that regard.
Other than extreme things, such as slave labor or generalized oppression, we should ignore the internal policies of the countries we trade with. Every country is different and the policies change all the time. Besides, the U.S. government subsidizes some industries, too.
It’s pretty difficult to figure that a level playing field makes it less expensive to make something in England and then ship it over to the US, especially back then.
But perhaps the larger point is, making textiles here employs people here, who can then use their wages to buy other things made here, even including clothes made from the cloth they produced. Maybe in theory we trade stuff made here for stuff made there, but in the real world it doesn’t seem to work out that nicely. And you also have the issue of, if you end up needing something like military uniforms, but the place you get your textiles from cuts off the supply, then what?
D E F L A T I O N is the friend of mankind except for militarism, the rapacious financial system, big government, and militarism.
The military uniforms is your strongest point. Military issues should always be considered when dealing with trade policy.
The crux of the issue is do we gain by finding cheaper ways to acquire goods and services? If consumers save money by importing something, does the leftover money create jobs elsewhere in the country? And are they better jobs?
The hard to prove answer is yes. The countries that have the most open economies consistently outperform those that are more closed.
Take Hong Kong from some years back (d**n communist China for what it is doing to Hong Kong!). Hong Kong had few if any natural resources, so they couldn’t make a lot if things domestically, yet their economy out performed most economies in the world.
The U.S. of course has more natural resources than Hong Kong, but still it should direct its efforts toward those things its best at producing and away from the things at which it is less efficient.
People in Maine eat oranges imported from Florida. They don’t build hot houses with artificial sunlight to grow their own oranges, because that would be expensive and consume valuable resources. You could say that the money going to Florida is still in the U.S, but it’s leaving Maine. It’s cheaper to send the money out of Maine and import the oranges than to build the hot houses.
You’re on to something here. Deflation resulting from improved efficiency is a good thing. Deflation caused by changes in value of the dollar is not.
So Maine trades oranges for maple syrup or whatever. Not a problem. The picture gets bleaker when whole industries are essentially killed because prisoners in China assemble phones and shoes cheaper than can be done in the US. Especially when phones and shoes are not dependent on weather patterns.
The prisoner in China situation is even worse because many of them are political prisoners. I can make an exception to the free trade religion in that case.
On your other point, has the phone and shoe industry been killed in the United States?
Do we have unemployed cobblers looking for work?Update: That last sentence was more flippant than I intended. Entire industries die all the time, for a variety of reasons. They rarely die quickly though. And others rise to replace them. My great grandfather was a blacksmith at a time when blacksmiths made good money. You rarely see a blacksmith working today but you also don’t see unemployed blacksmiths looking for work.
Sometimes an industry can shrink too fast. Like the Defense Industry when the Cold War ended. Huge numbers of people were laid off in Southern California. (I just barely dodged it myself.) And they couldn’t sell their houses, because they became worth less than what was owed on them. It was a rotten time, but people recovered from it quickly.
I wouldn’t support keeping the Cold War alive the to protect those jobs. That brings us back to what Rush Limbaugh said about the buggy-whip industry.
The pace of change creates problems that didn’t exist to the same degree when the buggy whip industry was dying. People have always suffered hardship when the work they spent their whole life doing went away. It happened in the early 19th century when the home weaving industry went away in favor of urbanized factories, for example. But in those days more people made it to the end of their working lives without being thrown completely out of work, and even though they could see what was coming and could warn their offspring to seek different opportunities, they could hang on. It was too bad for the ones who were a not old enough to make it that far, but were too old to adjust well enough to the new jobs to compete with the young bloods, but if it’s a small enough portion of the population that suffers that kind of problem, the rest won’t blow up the whole socio-economic system over it. When it disrupts too many lives too quickly, disrupting the social support systems, too, they may not be as likely to be satisfied with a little grumbling.
Obviously the enviros in your community want existing factories there to close. New factories? Fugeddaboutit!
Setting aside enviros, whether a factory is a net benefit depends. If your community has high unemployment among potential factory workers, it seems plausible. On the other hand, if a factory will bring in riff-raff, crime, pollution, crowded schools and traffic congestion, you may find less support than you expected.
Excellent point! Nothing against Ed who has been advocating for assembling iphones in the United States, but I see nothing wrong with paying other countries to do work at a cheaper price than your own citizens are willing to do it for. That is the whole point of trading in the first place. It’s just that this kind of trade involves labor (services) instead of goods.
No politician or even brilliant citizen could be wise enough to decide for us which goods or services would benefit us most. They might make strategic decisions for the good of the country, for instance militarily or security reasons, but are totally unable to predict what will be good for individual consumers.
I’m no expert on this, but the Smoot-Hawley Act of 1930 enacted protectionist trade policies and record-high tariffs in the United States. From what I understand, European countries retaliated by doing the same thing and trade slowed down greatly in the 1930’s. Thus the Great Depression was ushered in. This is strong evidence of your point.
There can be a difference between… “punitive?”… tariffs, and those directed towards certain market issues.
Not that you are implying this, but a lot of people are hung up on the idea of “money leaving the country.” I think the idea that this is a bad thing is mistaken. It comes from the mistaken notion that money itself is intrinsically valuable. It is not. It is worthless paper. What is valuable are the things you can buy with it.
For instance, there has been a concern that illegal aliens are earning money here and sending it back home to their families in Mexico. This is actually great for us! (Not the illegal part, but the financial part). Some guy named Pedro got up early in the morning and sweated all day long in the hot Sun to do your landscaping, saving you the trouble of doing it yourself. You give him pieces of green paper. Who got the better of that deal?
Pedro sends the money to his wife in Mexico. She calls Pedro and screams “You bum loco! I send you to America to bring back food and furniture and you send me worthless paper!” Pedro patiently explains that she can now buy products from America with otherwise worthless paper. But only from America… Not from Cuba, not from Brazil, nor from even the richest South American country. The only way that green paper can be made useful is by buying a good or service from somebody who lives in the country that issued the paper in the first place. You may do it indirectly by buying goods from Columbia with U.S. Dollars, but that is only because the end user in Columbia, or any other country, can only redeem it by buying American products.
In the end, every dollar that leaves America eventually finds it way back to buy something.
To quote Steve Martin, “You Americans are so naive!”
Combine this, with #159. That is how to think about it.
Disagree. Especially these days, much of what we import is essentially made by low-skill workers and we have enough low-skill workers of our own who can’t just “learn to code” or whatever the latest mantra is.
We still have plenty of low-skilled jobs available that low-skilled people in this country are not willing to do. This has been compounded recently by all the “Covid stimulus” money. I heard some stories on the radio about restaurants who can’t find anybody to work because former employees are making to much money on unemployment. Even white collar industries like law firms are getting applicants who apply by letter or online, and then when the firm calls them for an interview they don’t respond to the calls. This is because the supposed “applicant” was just fulfilling his government requirement to look for a job in order to continue receiving benefits.
Right, but the solution to that is not to in effect export those jobs to other (often impoverished) countries or to bring people from those countries here.
Then what is the solution?
Stop subsidizing non-work would be a good beginning.
Not if everything is dropping in price as it would naturally without the inflationism.
That’s why I say you have to listen to Steve Bannon, because this stuff gets extremely complicated in multiple ways. So I’m sort of agreeing with you. The problem is, people need to get the right model in their heads to even discuss it, which they don’t.
Thank you all for the discussion. I think I’m failing to articulate what I mean, but I won’t belabor it.
It’s a very difficult topic. Steve Bannon is the one to listen to because he knows how to keep the inflationist crap together and still deal with it.
I think it was more complex than that. Prior to Smoot Hawley , banks had been heavily investing in Belgian steel. I think the tariffs had an effect on the bank investments and they started collapsing.
Question – why would you choose to invest in foreign industry but not your own?
Edit – there wasn’t enough foreign trade going on for smoot hawley to be the cause of the depression.
Yes, it is excellent that the Chinese own a large amount of our land and may be influential investors in our news media.
https://thefederalist.com/2020/05/04/has-china-compromised-every-major-mainstream-media-entity/
If a large swath of your population is unemployed, how do you maintain consumption? Why, you create stimulus! I think those who think Free Trade = unequivocal good are back door Keynesians. Absolutely, let us put ourselves in debt to make our economy consume more.