Donald Trump’s media frenzy-causing questions about Barack
Obama’s birth certificate are distracting us from important policy
positions of the potential candidate.
Trump made news Monday when he was said in an
interview that he
would “probably” run as an independent candidate if he does not get
the Republican nomination. It may be a gambit to try to increase
voters’ likelihood of supporting him in a GOP primary, or he may
really mean it. With Trump, one never knows. (I continue to believe
he will not run at all.)
While some are tactically pleased with Trump’s actions
bringing up the birth certificate question — again, more because
it shows Obama’s evasiveness than because of any certainty about
where Obama was born — Trump should not be the Republican nominee.
More importantly, he must be dissuaded from running as an
independent, an act which could decimate the chance of beating
Barack Obama.
Trump realizes that an independent run would split the
conservative vote and says it concerns him. He says that someone
could win as an independent these days, which I think is unlikely
unless the Republicans nominate a dead person. (For a pretty good
parallel situation, look at the results in Colorado’s recent gubernatorial
election where a popular independent lost to the
Democrat with an all-but-dead Republican still getting 11% of the
vote.) Trump also says he won’t run unless he thinks he can win. It
is incumbent upon conservatives and libertarians to make sure he
knows he can’t.
Anyone responding to a poll — or at least anyone who does
not want a second Obama term — must respond that he or she would
not support Trump as an independent candidate in any circumstance.
And any Republican considering supporting him should withhold such
support, whether financial or otherwise, until Trump renounces the
path of an independent candidacy.
The reasons for this are not just about party and
vote-splitting. It’s about Trump and his beliefs. His positions,
few of which are actually known, are great pandering sound bites to
the economic illiterates who represent the majority of the nation
(and essentially the entire Democratic Party). But particularly
when it comes to foreign trade Trump is not just wrong but
dangerously wrong.
Regarding China, Trump says he’d aim to slap a 25% import
tariff on their products if China doesn’t “shape up.” I had to
laugh when he said “I’m for free trade” right afterwards, repeating
“I’m all for free trade, but it has to be fair trade.” The term
“fair trade” is code for unfree trade, period.
Trump argues that a trade deficit with a country means
that American trade with that country is bad for America, that the
amount of a trade deficit represents the amount of damage to
America. He says that America has “lost” the amount of the trade
deficit.
This characterization is wrong and, to put it plainly,
idiotic.
I have a trade deficit with Walmart, Target, Safeway, and
Toys ‘R’ Us. Does that mean I should not be permitted to trade with
them? And, just as with money going to a foreign country, dollars I
spend in those stores must, either now or later, come back into to
the U.S. economy in the form of physical or financial
investment.
When a Wall Street Journal interviewer suggested
(at about 12:20 into the
interview) that Trump’s view is “protectionism,” he
said that if the other country has a trade surplus with the U.S.
then “I want to be protected.” Think about what that means: It
means that if China has a $275 billion trade surplus with the U.S.,
Trump would try to tax our imports from China by enough to recover
that money, raising the prices of everything we buy that is made in
China. If tariffs are placed on Chinese goods (or any other goods),
all or nearly all of that tax will simply go to raise the price on
the tag in the store. The idea that the Chinese will pay the tax is
ridiculous; they’re already operating on small margins in
low-value-added manufactured goods with prices squeezed to rock
bottom by Walmart and others. No, it just means all our prices will
go up.
Therefore, either we will buy the same quantity of stuff
and spend more money, leaving less money for education, health
care, home improvement, travel, or whatever, or we’ll spend the
same quantity of money and have fewer of the things we want (or
some combination of both).
By the way, based on 2010
data, in order to recover the complete value of the
trade “deficit” with China, and assuming that massive price
increases would not cause people to buy less, the tariff required
to eliminated the trade deficit would be 75%, not 25%. In reality,
there is no tariff level that would eliminate our trade deficit
with China: as the tariff goes up, the price tags go up, so people
will stop buying and the tax collected will drop precipitously.
Furthermore, if we imposed any substantial tariff, the Chinese
would respond by blocking American imports, thus eliminating much,
most, or all of the “gain” from the tariffs.
I can’t stress this enough: The trade “deficit” with a
foreign country is not an analogue to our budget deficit,
which is a net loss to Americans because it represents money that
must be extracted from taxpayers either now or later. I understand
the confusion among the general public, generated in part because
of the use of the word “deficit” in both cases and in part because
of populist econo-moron politicians playing the age-old xenophobe
card to advance their sorry political careers. (You hear me,
Lindsey Graham and Chuck Schumer?)
In a way, the trade deficit represents savings to the
American consumer — always the “forgotten man” when it comes to
politicos pandering for votes. Every time you buy something made in
China, it represents a choice (made by you or by the store you’re
shopping at or both) to provide you a product with a desirable
ratio of benefit to cost, at a particular level of quality and
intangibles like brand cachet.
If you need a food storage container, do you want to buy
it for $1 at Walmart or be forced by The Donald’s xenophobia to pay
$2, or even worse, to have to go to Williams-Sonoma (one of my
favorite stores) and buy a fancy French one (also contributing to
our trade “deficit”) for $20?
There’s a subtle but important point here, one which
life-long mini-dictators like Donald Trump forget: tariffs don’t
just punish consumers in terms of cost but also do so in terms of
freedom. In the economic world envisioned by Donald Trump, the only
winner would be — you guessed it — Donald Trump. And probably not
even him, but he’s not smart enough to realize it.
In any case, one can only wonder what other parts of our
lives The Donald thinks he can run for us better than we can. Trump
might call himself a conservative, but he’s little more than an
old-fashioned populist statist autocrat. That may work for him in
his own business empire, but is antithetical to the economic and
political well-being of the nation he claims to want to
run.
The public must focus on Trump himself and not allow his
mischievous questions about Obama, like a magician causing his
audience to focusing on his waving left hand while he pulls your
card of the deck with his right, to divert attention away from his
mindless, dangerous economic policy.
