Deal me in.
Posted on 06/30/2016 8:53:36 AM PDT by Kaslin
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.
I don’t want tariffs or trade wars I want the government out of the way not picking and choosing who wins on the market place via tariffs. Let the market bear who wins and loses.
I’d like Donald to talk about this, lifting restrictions and get government the hell out of the way and their regulations with them.
Talk freedom plain and simple
I don’t know who this Steve Chapman may be, but somehow I would be more likely to trust Trump’s business acumen than any of his detractors. Trump has been wildly successful, surely a pretty good marker of the accuracy of his thinking when it comes to trade and business. Trump is a proven doer: a great success by any measure. Many of the carpers, whiners and bloggers are not.
Yeah, let’s all do what the socialist professors tell us. It has worked so well every where else it’s been done. /s
Drat! Does this mean that townhall.com is a hotbed of RINOs. How disappointing; it was one of my favorite website.
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.
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Sort of like Venezuela as an example of successful implementation of Socialism!
Deal me in.
Their way has failed miserably... I long to see “Made in the USA” on my garments and I long to be able to buy cotton fabric made in the USA... I long to see those empty cotton manufacturing buildings in North Carolina doing business again.
They tried “free trade” and no one had the guts to demand it be equal. Companies moved abroad to get out of paying high taxes in the US. Factories used to be a large percentage of families’s income... everything went to pot in the last so many years.
I’m no expert but I don’t see the problem in what Trump has said he’d like to do. Make it fair.. make if profitable for companies to do business here.. build a reputation of American first... for no other country is going to give a care for the United States. I am simple... I just believe in doing things right and honest... it’s not been tried for a very long time.
Steve Chapman’s piece is loaded with rhetorical tricks of persuasion. He makes no attempt to make a cogent case against Trump. He simply wants to sell the idea that Trump is a bad choice.
Steve Chapman is a columnist and editorial writer for the Chicago Tribune. His twice-a-week column on national and international affairs, distributed by Creators Syndicate, appears in some 60 papers across the country. Steve Chapman came to the Tribune in 1981 from the New Republic magazine, where he was an associate editor. Steve Chapman has contributed articles to several national magazines, including Slate, The American Spectator, National Review and The Weekly Standard. Born in Brady, Texas, in 1954, Steve Chapman grew up in Midland and Austin. Steve Chapman attended Harvard University, where he was on the staff of the Harvard Crimson. He graduated with honors in 1976 and later did graduate work at the University of Chicago. Steve Chapman has three children and lives in suburban Chicago.
Manufacturing is on the ropes. My customers are going out of business or barely hanging on. They are losing orders offshore and in some cases losing at pricing less than what the material costs. I know no one on Wall Street (open border globalists) cares because they don’t think manufacturing is important. Countries like Germany thinks manufacturing is key because it is tied to their GDP number. I am not sure why Wall Street thinks retail and hospitality jobs are what will make the economy grow. The wages for those sectors will continue to decline as the open boarders crowd gets all that cheap labor, subsidized by the welfare system. Meanwhile, the labor content in manufacturing is on a rapid decline because of automation. Manufacturing today requires a higher skilled workforce (higher pay) and capital (more jobs) which is something you would think we would want. Who is ramping up for the new manufacturing economy? China, India, Taiwan, Germany.......Unfortunately, we don’t have an educated or skilled workforce. Our schools are too busy teaching how bad America is, diversity and what bathroom to use. I guess a middle class is not as important as some fund manager getting his 2nd home at the Hamptons.
This douche bag, and multitudes like him, is the reason why I am no longer a Republican.
Steve Chapman’s main problem is that what he thinks is free trade isn’t.
Steve Chapman, billionaire. :)
“I’d like Donald to talk about this, lifting restrictions and get government the hell out of the way and their regulations with them.
Talk freedom plain and simple”
If Trump were to do as you suggest, the Globalists would win in a heartbeat! The problem we have is government is helping them to the detriment of the ordinary citizen. We need the government to control the Globalists. Left alone, the Globalists would move as much as they could off-shore, leaving us with $15 per hour jobs flipping burgers if we’re lucky.
It is a fact that steep tariffs and the industrial revolution are what made America great. Fact.
“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?”
What a stupid comment.
Interesting pics of Bush on your home page ya got there Kaslin.
If nothing else this election season has made me realize how infinitely preferable doers are— especially real successful doers— to mediocre-minded writers, lecturers, think-tankers. Forget Trump’s success, look at the mega-titans backing him, like Andy Beal and Carl Icahn. These are guys who can shift global markets with just one declarative sentence on CNBC. But hey, these lightweights don’t know nuttin’. Step aside and let the big boys from the think tanks and policy institutes explain how if really works, they’ve studied at the feet of masters who have spent decades in sinecures thinking about this stuff.
“Manufacturing jobs have vanished not because we don’t manufacture anything but because companies have learned to produce more goods with fewer people. “
New businesses with new employment opportunities should fill the void. Instead they are straddled with taxes and regulations, and going overseas. This is what Trump will remedy, you dumb*ss Chapman.
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