Posted on 05/08/2016 5:49:19 AM PDT by TigerLikesRooster
Why a conservative economist says Trump could make America ‘the North Korea of economics’
By Jim Tankersley May 6
In his run for the White House, Donald Trump has threatened to slap tariffs on imports from China, in almost-certain violation of international rules. He has threatened to confiscate money that immigrants from Mexico wire home to their families, in order to force the Mexican government to pay for a border wall. This week, he suggested that, in an economic crisis, the government might repay only some of the money it owes to certain holders of its debt.
Those threats reflect an economic philosophy that is at odds with the traditional economic belief that markets cannot function well outside the rule of law. America has built 200 years of prosperity on a foundation of people agreeing to rules in business transactions, and then sticking to them. Trump appears willing to break those rules in the name of cutting better "deals" for American workers.
Trump's pledge to take extraordinary steps to help left-behind American workers has powered his campaign and made him the presumptive Republican nominee. But he has worried many economists, on the right and the left, who warn that breaking laws and commitments could undermine America's credibility with trading partners, raise its borrowing costs and potentially spark global financial panic.
(Excerpt) Read more at washingtonpost.com ...
Tariffs do not make someone buy only American.
Why do you think American business people will create “sweatshops” to make mandatorily purchased American-made clothing?
You appear to have a very dim view of American business men and women.
What conditions do you think illegals are living in within the US, now, when working for US businesses? Perhaps your dim view is best suited to Chamber of Commerce-supporting, illegal-loving, labor use and not those businesses that operate legally.
No maybes about it. George Washington was a protectionist to the nth degree and what makes it even more unfathomable he was a grower who are notoriously in favor of free trade. But he put his countrymen's needs ahead of his own self interests. In other words he's not like you .
>No maybes about it. George Washington was a protectionist to the nth degree and what makes it even more unfathomable he was a grower who are notoriously in favor of free trade. But he put his countrymen’s needs ahead of his own self interests.
Well said.
Red herring. The offshored manufacturing jobs are still with it is now they are j being done by foreigners. Automation affects all factories equally whether they are here or overseas. Nice try. No sale.
Honestly, free trade is a good thing to reach toward.
The devil is in details around that trade.
This “economist” was a goon who worked for the failed McCain presidential run.
Opinion
Disregarded
Why do I say such things? Because I know that the jobs won’t be lost but they will be shifted to finance and technology. Because I know our GDP per capita will go up and we will have a stronger military.”
How long does it take to convert people from one industry to another? Do you consider the changeover costs properly? Also, how do you value the regulatory and tax burden differential between countries? Europe pays virtually nothing for its military, because we protect them. This is equivalent to the US creating and destroying trillions of dollars of GDP over 50+ years of NATO. We have lost that amount of realizable commerce in something for which we merely benefited other countries, with a relatively minimal benefit to ourselves.
A similar “benefit” to the US could be had by raising and educating 50 million people to be productive, then summarily killing all of them before they could be produce. Some would say that “at least we refined our educational methods” through their loss, but was this a viable investment for the cost and outcome?
As US citizens become burdens on our country when unemployed (as we are currently set up—we could kill them or force them out of the country to stop the burden), the idea that it's okay they lose productive jobs is pretty crass. If we had no welfare and a more positive business climate, more of these human resources could flow to where they were best used through the industrial changes. However, when we impose so much on our country before we are allowed to trade, we cannot expect a positive benefit from job outflows.
The burdens we have are not reciprocated elsewhere. Perhaps good for them or good for us, but inequities occur that can make most everything more profitable if made or performed in other countries over being made here. We could reduce our overhead on transactions here, try to increase it on others, or pocket some sort of difference during the exchange for the benefit of transactions back into our environment.
I vote for a combination of the first and last options.
Economics is always debated and is high in plasticity as our brain. The issue is how DT’s mind views economics. This was addressed in the article with a link that defines DT’s experience and knowledge in making deals. The article linked is “What Donald Trump Doesn’t Understand About ‘the Deal’” and explains the facets of economics that could shed a light on why deals are not always good for the economy.
1. Trump does not see the economy as a “zero sum” game. His tax policies are centered on having the velocity of money increase. It is all of his detractors who are the ones saying “Trump's tax plan doesn't pay for itself.” This blows a huge hole in the rest of the article analysis.
2. The author goes on to say we have an incredible need for immigrants, and without them, we have huge debt problems. Really, do FReepers believe we need 50 million immigrants to support the country, when half or more are illegal? It's like saying we need illegals to make this country strong. No, we don't. We need 94 million people not currently productive to be more productive. Get rid of the illegals and some large number of the legal immigrant workers and really make this country strong.
The author need to “get real.”
As a major in Econ and a disciple of Adam Smith, I guess we have to disagree.
“...Adam Smith, for example, pointed to increased trading as being the reason for the flourishing of not just Mediterranean cultures such as Egypt, Greece, and Rome, but also of Bengal (East India) and China. The great prosperity of the Netherlands after throwing off Spanish Imperial rule and pursuing a policy of free trade made the free trade/mercantilist dispute the most important question in economics for centuries. Free trade policies have battled with mercantilist, protectionist, isolationist, communist, populist, and other policies over the centuries...”
https://en.wikipedia.org/wiki/Free_trade
“Smith, on the contrary, argued for unregulated foreign trade, reasoning that if England can produce a good, e.g., wool, at lower costs than France, and if France can produce another good, e.g., wine, at lower costs than England, then it is beneficial to both parties to exchange these goods, with each trading the good it produces at lower costs for the good it produces at higher costs. In the language of economics, this became known as the absolute advantage argument for foreign trade...”
http://www.economictheories.org/2008/07/adam-smith-free-trade-international.html
“If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage” (WN, IV.ii.12).
“Were all nations to follow the liberal system of free exportation and free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire” (WN, IV.v.b.39).
http://ejpe.org/pdf/5-2-art-3.pdf
The "economist" author of that article, NPR employee Adam Davidson, graduated from the University of Chicago with a BA in religion. Donald J. Trump has a BA in economics from the Wharton School of Business at the University of Pennsylvania.
You cannot separate politics from economics. When discussing trade policy you are discussing politics and national security as much as you are discussing economics.
I note that none of your examples state tariffs as an issue.
Likely because taxes are acceptable means to fund government.
Free trade was not the policy of the founding fathers and all claims to free trade being a conservative idea is based on nothing the founding fathers believed in.
At this point anyone who advocates for free trade is a free-traitor to be hung from the neck till dead.
Nations don’t trade, individuals do. When individuals in the U.S. wish to purchase goods (through intermediaries) from someone outside the U.S., a U.S. competitor can turn to the government of limit competition. Why not a buy Massachusetts program? We should outlaw the import of cars, cameras, bicycles, produce, and mobile phones not made in Massachusetts. Of course, we’ll have shitty expensive cars, cameras, bicycles, no strawberries except in July and August, and mobile phones that look like World War II walkie-talkies and don’t work out of state.
You say I’m being ridiculous? Who are you to pick and choose? If in principle I can restrict one item from trade, there is no logical stopping point.
As best I remember, Smith argued only two cases for tariffs: (1) national defense, and (2) where there are internal taxes placed on domestic industry thus making it more difficult to sell domestic products.
“...To begin, Adam Smith put the quality of life of the British people before all else. And from this he argued in The Wealth of Nations that a tariff served the manufactures by permitting them to increase their profit margin. It was this increased cost of manufactured goods that entailed a reduced quality of life for the masses. Adam Smith knew that in his day unrestricted foreign competition would force manufacturers to adopt economies in production and a lower profit margin, and thus benefit all the workers. He also knew that in the 1770s, given the already low wages, that among the cost reductions would not be the lowering of laborers’ wages, for wages were at a subsistence levels. Adam Smith opposed tariffs primarily because of the burden they placed upon the masses. He stated that the principal benefit of a tariff was to the manufacturer whose purpose it was to increase his margin. For Adam Smith, effects justified the lifting of tariffs...”
http://www.skeptically.org/polrec/id11.html#_ftn2
Agreed!
and don’t forget devaluing their currencies to make our products more expensive. Don’t forget countries subsidizing their products. Don’t forget the UNFAIRNESS of so called treaties which rob our sovereignty. Tariffs work. Treaties work only as long as they are unilateral. Bankers make their games profit the bankers, not the workers or even the owners.
So “conservative” that the “journalist” didn’t mention the economist’s name in the first three paragraphs.
What did the “journalist” find out about the economist’s opinion of HITLERY’s plans? She gonna make us like war-torn Poland?
I’m beginning to think these are nothing more than “conservative clowns”, not actual CONSERVATIVES who have a LOVE for America.
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