How Trump could get the Economy Going: A glimpse of the bare bones of his economic plan

The Dow Industrial Average fell by 358 points on Thursday and 531 points on Friday. Yesterday, after plunging more than a thousand points, it recovered to a “mere” 588 point loss. Economic growth has been slow, and another recession appears to be on the horizon. Could a President Donald Trump get the economy going again? So far he has only laid out the bare bones of his economic plan. But it has the makings of an excellent program.

First and foremost, he plans to negotiate balanced trade agreements and even threatens taxes on imports as a way to move trade into balance. If he moves trade toward balance, that would provide a tremendous boost to the economy. In the short term, demand for American made products would immediately increase. In the long-term, manufacturers would build many new American factories that incorporate the latest in production technologies.

These is a simple way to balance trade, explained in a book of which we are co-authors, a single-country-variable-tariff, the so-called Scaled Tariff that is explained in the book, Balanced Trade (Lexington Books, 2014).

The tariff goes up as a significant chronic trade deficit with a trading partner increases but diminishes as the trade deficit is reduced, disappearing completely when trade is brought close to balance.

Countries with whom trade is close to balance would not be affected. Only large countries with significant chronic surpluses in their trade with us would be affected. The tariff would raise the price of imports from the country to which it is applied but would yield substantial tariff revenues that would more than compensate for the high prices.

Over the last 8 years, an increasing percentage of American workers have left the workforce or have reduced their working hours.

First and foremost, he plans to negotiate balanced trade agreements and even threatens taxes on imports as a way to move trade into balance.

We have all heard of Hoot Smalley and how that got the economy going in 1929.

Trump wants to simplify the U.S. tax code.

Does he want to do this by increasing taxes on hedge fund players?

I wonder if Trump will even have to worry about this, my idea is this:

If the House takes on Boehner and the Senate takes on McConnell either they will be gone from their leaderships or they will have seen the light and vote to make money for America....

I think the people of this country know that we not only need strong leadership (Trump.Cruz)but that we are going to have to weed out the house reps and senators that are coming up for re-election...if we are as outspoken as we have been for Trump, can you imagine what they are thinking??? You got it....they are not going to be around...

Smoot-Hawley was a myth.

What happens if we focus on exports alone? Exports were $5.9 billion in 1929, and had declined to $2.0 billion in 1933, for a -$3.9 billion decline. This $3.9 billion decline was roughly 3.8% of our 1929 GDP, which had already declined by a whopping 46% over the same period of time. Thus, of the -46% GDP decline, only 3.8% of it was due to a fall in exports.

- See more at: Tariffs: The Smoot-Hawley Fairy Tale

I was surprised by the conclusions set forth by Thom Hartmann so I did a quick Google and found out there is varying opinions from that set forth by Mr. Hartmann who is after all a real leftist:

Peddling Protectionism:
Smoot-Hawley and the Great Depression
Douglas A. Irwin
(http://press.princeton.edu/titles/9430.html)

The Smoot-Hawley tariff of 1930, which raised U.S. duties on hundreds of imported goods to record levels, is America’s most infamous trade law. It is often associated with—and sometimes blamed for—the onset of the Great Depression, the collapse of world trade, and the global spread of protectionism in the 1930s. Even today, the ghosts of congressmen Reed Smoot and Willis Hawley haunt anyone arguing for higher trade barriers; almost single-handedly, they made protectionism an insult rather than a compliment. In Peddling Protectionism, Douglas Irwin provides the first comprehensive history of the causes and effects of this notorious measure, explaining why it largely deserves its reputation for combining bad politics and bad economics and harming the U.S. and world economies during the Depression.

In four brief, clear chapters, Irwin presents an authoritative account of the politics behind Smoot-Hawley, its economic consequences, the foreign reaction it provoked, and its aftermath and legacy. Starting as a Republican ploy to win the farm vote in the 1928 election by increasing duties on agricultural imports, the tariff quickly grew into a logrolling, pork barrel free-for-all in which duties were increased all around, regardless of the interests of consumers and exporters. After Herbert Hoover signed the bill, U.S. imports fell sharply and other countries retaliated by increasing tariffs on American goods, leading U.S. exports to shrivel as well. While Smoot-Hawley was hardly responsible for the Great Depression, Irwin argues, it contributed to a decline in world trade and provoked discrimination against U.S. exports that lasted decades.

Peddling Protectionism tells a fascinating story filled with valuable lessons for trade policy today.

I have got to do some more research.

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