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My Turn: Catchy tweets won’t grow the economy

For the Monitor
Published: 2/11/2017 12:09:59 AM

Donald Trump won the election by being a “master persuader,” according to America’s greatest expert on authority figures with weird hair. Dilbert creator Scott Adams says that Trump won via “linguistic kill shots,” memetic sound bites designed solely to go viral, with no connection to reality.

Trump is no different from other politicians in this regard. Elections are won by infecting the most minds with memes. It’s like a zombie-virus movie, except that the plot makes less sense.

After the election is over, however, it’s time to stop spraying us with zombie viruses and start to deal with reality. Trump’s tweets can win elections, but they can’t grow the economy. Tariffs and immigration bans won’t make us great; they will turn us into North Korea.

From Trump’s inaugural address: “We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.”

According to Trump, every successful country on Earth is “destroying their jobs” and subject to the “ravages” of other nations’ products. That trade makes you poor is an “alternate fact.”

Singapore, Liechtenstein, Dubai, Switzerland, Hong Kong, Luxembourg, Macao – all the wealthiest, highest-employment nations and enclaves are centers of international trade.

One country has already implemented Trump’s “protection” plan. North Korea’s international trade is nearly nonexistent, just a bit over $3 billion in exports from over 25 million people. And you can see the results from space. North Korea is that black pit surrounded by the lights from global capitalism.

In reality (a region that apparently will not experience an official Trump visit during his presidency), trade is what lifted the world out of universal poverty.

Ricardo’s Law of Comparative Advantage explains why. The U.S. worker, for instance, could make any given product. But instead of making burlap worth 50 cents per hour, an American worker makes software, silicon chips, pharmaceuticals, etc. We spend our limited time making the highest-value product.

The larger the trade zone, the more specialized and efficient the process. Today some parts for “U.S.” cars are made overseas (and some parts for “Mexican” cars are made here), while the software for iPhones marked “made in China” actually comes from Cupertino. Cutting off trade between nations would destroy all the benefits from comparative advantage, and set the world economy back decades.

If trade were not beneficial, then North Korea or Pol Pot’s Cambodia would be the perfect model. Every nation would just become a Hermit Kingdom. And why stop there? New Hampshire could stop trading with Seattle, and make our own jet airliners. Cities could stop trading with rural areas, and grow their own food. Everyone could just stay in their own houses and carve their own smartphones out of flint.

Except we wouldn’t have any good carving flint (a lot of East Coast arrowheads come from Flint Ridge, Ohio). From its Stone Age beginnings, civilization depended on trade.

Also from the inaugural address: “For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost. Washington flourished – but the people did not share in its wealth. Politicians prospered – but the jobs left, and the factories closed.”

Washington is the problem. Jobs left and factories closed because it is hard to do business in a country with the highest corporate income taxes, most complex government regulations and the largest military expenses in the world.

Jack Ma, founder of Alibaba, suggests that instead of blaming Chinese workers, maybe we should blame the $14.2 trillion that the U.S. spent on foreign wars over the last 30 years. And the U.S. finance industry bailouts. And the U.S. public education system, which spends more per pupil for less educational performance than any other in the world. But then Mr. Ma is just a self-made tech billionaire, not one smart enough to inherit his fortune.

Borders, like Trump’s tweets, exist only in our minds. Goods and services are made by real people in the real world. The bigger and freer that world, the richer we will become.

Presidents are always claiming that they will make our deals for us: New Deals, Fair Deals, Square Deals, etc. If Trump really wants to help the U.S. economy, he will let individuals make our own deals, with people all over the world. Free trade will keep America great.

(Bill Walker pressure-flakes DICOM data for M2S in West Lebanon.)


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