Donald Trump: A 21st Century Protectionist Herbert Hoover

Newsmax ^ | August 29,2015 | By Stephen Moore & Lawrence Kudlow

[Hojczyk]

By Stephen Moore & Lawrence Kudlow

Here's a historical fact that Donald Trump, and many voters attracted to him, may not know: The last American president who was a trade protectionist was Republican Herbert Hoover.

Obviously that economic strategy didn't turn out so well — either for the nation or the GOP.

Does Trump aspire to be a 21st century Hoover with a modernized platform of the 1930 Smoot-Hawley tariff that helped send the U.S. and world economy into a decade-long depression and a collapse of the banking system?

We can't help wondering whether the panic in world financial markets is in part a result of the Trump assault on free trade.

Trump is also now running full throttle on an anti-immigration platform that could hurt growth as well and alienate Republicans from ethnic voters that the GOP needs if it is going to win in 2016.

We call this the Trump Fortress America platform. He clearly sees international trade and immigration as a negative sum game for American workers.

He recently announced that as president he would prohibit American companies like Ford from building plants in Mexico. He moans pessimistically that "China is eating our lunch" and is "sucking the blood out of the U.S.?"

But strategic tax cuts and regulatory relief after the anti-business rule-making assault by Obama, not trade and immigration barriers, are the solution to America's competitiveness deficit.

A draft of Trump's 14-point economic manifesto promises that, as president, he would "modify or cancel any business, or trade agreement that hinders American business development, or is shown to create an unfair trading relationship with a foreign entity." Special: Engineers Call This the ‘Solar Panel Killer’ His immigration stance would not just deport illegal immigrants, but even lock the golden doors to those who come lawfully

[cradle of freedom]

How about H1B indentured servants? Fair trade?

[crusher2013]

If they have the power to prevent depressions that implies that they have the power to create depressions...

The FRB has more power over the economy than the US Congress does.

[P-Marlowe]

Protectionism would probably lead to a very bad economic downturn;

Every other country on the planet engages in "protectionism". If you think that Free Trade means everything comes in here at a discount and everything that leaves is subject to the protectionist policies of the other countries, then what you believe in is National Suicide.

We have to have very tough "FAIR TRADE" laws. If that's protectionism, then we need protectionism.

[skeeter]

As long as the Big Dogs are making a bundle & the parasite class are receiving their bennies, who cares what happens to the middle class.

[flaglady47]

Larry Kudlow has a business/financial radio program on the weekends and was using the whole show to slam Trump. Although conservative on some subjects, Larry is still a registered Democrat, so consider the source. Kudlow is a RINO without being a Republican, lol. MOORE is just a plain old outright establishment RINO.

[FreedomPoster]

THAT is funny right there! LOL

[Regulator]

Yeah. That was the excuse, to prevent money panics.

But they knew what they were doing. It was about yoking the gullible rubes to a credit and taxation scheme that would make the moneylenders rich beyond anyone’s dreams as they soaked the most successful economic model for everything that had been created since the settling of the colonies.

Thus both the income tax and the reserve bank were created at the same time. That’s not an accident.

[Regulator]

Pretty much sums it up.

The excuse for the one sided trade deals was that these were poor countries and the U.S. was fabulously rich and gee why can’t we help these little people, they’ll be grateful!

How’d that work out?

[Regulator]

Kudlow = Klown

[factoryrat]

There’s no such thing as “free trade”. Virtually all of the countries that we deal with enforce stiff tariffs and conditions on imports into their countries from the US. In return, they get our industrial and technological manufacturing base, AND we get to sell them agricultural goods, raw minerals, and scrap metal, which makes our exports look like some third world colonial shipping manifest.

I’ll give you an example. I work for a railroad who does business on the west coast. I see trains coming and going to and from the west coast ports, along with trains coming from mexico and canada. Imtermodal shipments from asia outnumber shipments to asia by an order of three to one. The canadians ship chemicals, oil, lumber, grain, and steel into the US. we ship scrap metal, and transship produce from mexico to canada. Mexico ships cars, car parts, produce, steel and foundry products, heavy equipment, and comsumer products.

[FredZarguna]

Correct.

The effect of Smoot-Hawley, most economists now acknowledge, was very small -- although it was real. But it was insignificant compared to the liquidity crisis caused by the central bank, and the economic circumstances were entirely different.

At that time, the US was a creditor nation. The initial liquidity issues were caused by the inability of debtor nations to meet their obligations to us.

Smoot-Hawley was simply stupid, given that at that time our balance of trade deficit was negative [we were a net exporter.] Net exporters do not erect trade barriers.

In ordinary circumstances China's monetary policy would amount to an enormous tax on her people, the benefits of which are provided to the countries she exports to, and it is true that we do accrue an enormous economic benefit from that. The problem is, that unlike the America of the late nineteenth to mid-twentieth centuries -- which regarded itself as at war with no one -- China is at war with us, and is using the valuation of its currency to destroy our industries [and, although most people don't realize it yet, it is positioning to destroy US agriculture as well.]

[samtheman]

I want a southern border fence and I want it now.

[Arm_Bears]

About the third or fourth time this has been posted.

[x]

However bad Trump's trade policy might be, nobody today is as protectionist as Hoover and the Republicans of his day were.

Ronald Reagan was more protectionist than many would like to think -- without being a Herbert Hoover -- or maybe Reagan was just lucky that NAFTA was finalized when his successors were in charge.

I don't have a problem with Kudlow. Stephen Moore, though, has been an open borders guy (or something very close to it) going way back. Of course, he's going to attack Trump -- and of course, he should be ignored or put in his place.

[ichabod1]

It seems to me that you can have more trade protection, or less trade protection, but the propaganda has been through the fifty five years of MY life that ANY protection is BAD BAD BAD. But trade deals never seem to work in our favor. I’m all for tariffs.

[nathanbedford]

While I am absolutely clear about the pernicious political as well as an economic effects of unrestrained immigration, I confess I am ambivalent about trade policy.

I am fully aware of the libertarian argument for free trade yet my experience of living in Germany presents different evidence to my own eyes. The Germans are outwardly free traders but they remain stubbornly protective of their economy and their industries. They even drove Walmart out of Bavaria!

I quite agree with the authors' prescriptions of cutting taxes and cutting regulation as the important steps in making America competitive but I have to concede that Europe, Germany not excluded, is top-heavy with regulations yet Germany remains one of the strongest exporters in the world.

Germany has a different training system the United States which features heavy emphasis on apprenticeship and the training is thorough and required for even the most pedestrian of occupations. It seems that the emphasis is not on creating competition but in setting up a system in which existing businesses thrive. That means that startup competitors face barriers and young people are channeled through apprenticeship into industries but in the course of their training they acquire knowledge and experience of real value. On the university level, its technical and scientific achievements rank among the highest in the world.

In their exports it does not appear that the Germans compete on price but on quality. As to imports, they are not indiscriminate buyers on the basis of price alone. They will pay a little more for German product. Walmart was simply unwilling to cope with the employment regulations and with the culture and so left.

My point? If we buy the ideological argument that free trade is indispensable we must ask, to whom? Clearly, we have hollowed out our manufacturing base and with it the blue collar jobs. There comes a point when mercantilist arguments have to have their effect. We are conceivably approaching the time when we will not be able to compete with the Chinese Navy because they will be able to manufacture ships at a rate which we cannot match. Free trade does not work if job loss in basic manufacturing industries cannot be compensated for by job gain in higher technological industries but that that is largely determined by our educational system which sucks. Indeed, there is mounting evidence that the Chinese are becoming very proficient in high-technology. Even with the best educational system turning out the best technicians, a lag time will always create employment dislocations and political problems. The Germans seem to slow the process down until their technicians are up to the task and can compete.

Perhaps it stems from the fact that Germany is a homogeneous society (and will remain so for a little while until the flood of immigrants utterly changes the culture) and therefore capable of a consensus but the diversity of the United States is proving not our strength but our Achilles' heel and has created an every-man-for-himself culture in a universe where the government is clearly for sale.

If The Donald is actually elected, will he be selective in his trade policy or will he instead ignite a trade war?

[FredZarguna]

Also say NO to the importation of unskilled foreigners, and say NO to the importation of H1B visa holders. If we really needed STEM graduates [we don't] they should be free to work for whomever they want at competitive wages. Their attractiveness as cubicle slaves would quickly disappear.

People who believe in free market economics cannot support the importation of unskilled/nonskilled workers and their dependents by unscrupulous operators whose benefits are subsidized at the expense of taxpayers. The minimum wage would rise on its own if there were not enormous downward pressure on entry-level wages caused by the presence of 20+ million illegals. Additionally, their net cost to the economy when support infrastructure, social benefits, and criminal activity are properly accounted for is in the tens of billions. Contrary to the "free marketeers" at WSJ there is no such thing as "free" slave labor, and contrary to the bogus claims of Paul Gigot, et al, illegals are and always have been a net drain on economic activity.

Similarly, people who believe in free markets cannot continue to pretend that the H1B visa program is anything other than a means to undercut the wages of American workers. And the jobs they are taking are absolutely not jobs "Americans will not do." The claim they are jobs Americans cannot do is a reprehensible and obvious lie, especially given the restrictions permitted to employers for the importation of H1B visa holders. It's time for people in Congress to call Silicon Valley and Redmond's bluff: "If you really need to import foreign workers, we'll expand the existing work visa program." Watch how quickly their enthusiasm for H1B's dies when imported foreign workers are able to bid out of their corporations at market competitive wages.

[vette6387]

“Stephen Moore & Lawrence Kudlow “

Two more a$$holes who have been posing as conservatives have outed themselves. Trump is doing this country more of a service than even he realizes. Creating a world trade situation where the playing field is level isn’t protectionism, it’s just smart. The truth is the people to whom Moore and Kudlow owe their allegiance don’t give a $hit about anything but their own pockets.

[LongWayHome]

Who’owns’ Free trade ? Not my elderly mom who tried to do some free trading of her own by purchasing medication in Canada until the government said screw you....

Whatever we are experiencing in this country is not free & it’s not trade. Open borders, HB1 slaves, off-shoring of jobs & on it goes.

[arthurus]

Trump appears to be a protectionist. That will be counterproductive to regaining prosperity. There are somêother problems with Trump. That said, he is the only one who can make the moves necessary to regain the Republic. He has the mien of a dictator. The next president, as the current one, will be a dictator because Congress has ceded all of its real power to the President. The USSC has amplified the trend. The next president cannot give that power back to Congress and I would hope he doesn't try. The next Congress will almost surely be Democrat as there is no reason at all for conservatives to vote for Senators and Representatives. They are corrupt going in or they become corrupted totally within hours of being seated.

The new Dictator, if he is to make a real attempt to restore the Republic has to use his Fiat to bypass Congress and the Courts and immediately abolish the Agencies and all their regulations and institute a low t\flat tax with no deduttions or other complications at all

That alone would restore prosperity in a relative flash but would solidify the Dictatorship and make it inevitable that the next Dictar\tor would more true to the Jefe or Caudillo form. He has to persuade, not force, the States to call an Article 5 Convention at which the 17th Amendment must be repealed then the States can proceed further and take back the power the Constitution gave them in the first place. Once that process is complete, he would ideally resign or decline to run again and let the chips fall.

That is ideally. Ideally doesn't happen very often. I am not optimistic but feel that any other than Trump, any other that has appeared by now, cannot or will not do these things. Trump can and may, only may. George Washington is a once-in History man. Reagan and Thatcher come along once in a couple of centuries, maybe. May in the present state of the nation is sufficient for my support. It is all a gamble but there are better slim odds with Trump. At least he has the force of character and the will to carry something like that through. With Cruz as his VP and Palin and Carson as prominent members of his team, maybe, just maybe.