Thursday, October 22, 2015

Donald Trump’s Contempt for the Free Market

Charles Lane at WaPo is correct when he writes:
One of Trump’s top proposals, emblematic of a wider protectionist approach, is to stop Ford Motor Co.’s construction of a plant in Mexico, by threatening the Michigan company with tariffs on goods it might build south of the border...

It’s a remarkable take on capitalism for a Republican, this vision of the president thuggishly telling private business managers what they can and cannot do with their property. And he calls Bernie Sanders a communist!...

Never mind all that: Trump’s idea would be terrible even if feasible. For reasons familiar to all Economics 101 students, blunt-force protectionism destroys jobs, probably many more than it “saves.”

In the simplest terms, Trump’s approach amounts to an increase in the regulatory and tax burden on U.S.-based businesses. Other things being equal, the heavier that burden, the less likely businesses would be to invest in the United States, and the fewer jobs would be created.

Investors might get especially skittish if policy can change at the whim of a White House wheeler-dealer who relishes dissing CEOs by phone — and who told Fox News’s Chris Wallace on Sunday that, in negotiations, “I want to be unpredictable, because, you know, we need unpredictability. Everything is so predictable with our country.” So much for a stable business climate.



  1. I hope someone gets the chance to ask Trump how he'd feel if someone in government told him he'd have to pay higher taxes if he built a building in Mexico or China.

  2. Is Charles Lane at WaPo correct when he says it's remarkable for a Republican to be a protectionist? The Republicans started out as an anti-free-trade party, just as were their Whig predecessors. Southern Democrats were the only consistently anti-tariff party around, back in the day. Pat Buchanan made mercantilism respectable again in modern Republican circles. They are just going back to their roots.

  3. Trump is nothing if not a pragmatist. In any case, the GOP will not let him get the nomination. And if he does somehow get the nomination, the GOP will team with the Democrats to ensure a Hillary win. So there is really nothing to worry about.

    1. Robert, you omit to mention that there are Military-Industrial-Intelligence-Complex options even if Trump gets closer to (or even has attained) the prize:

      1) hard coup (JFK)
      2) soft coup (Nixon)
      3) prophylactic coup (RFK)
      4) admonitory pre-coup (maybe Reagan...)

    2. Not following. Are you speculating what might be initiated against Trump if the "Complex" feel he is getting too close? Or what Trump might initiate in cahoots with the "Complex"? If we are going to go down that particular avenue of speculation, the former seems much more likely.

  4. Plenty to worry about if Hillary gets elected. It means the political class remains comfortably entrenched for another cycle. The whole reason to support Trump is to destabilize the political class and has nothing to do with Trump's policies.

  5. What is so surprising about Trump's supposed free market stance, and particurlarly that of Republicans? Republicans are only slightly more in favor of the free market than the left, regardless of their mostly empty rhetoric. The mainstream Repubes are nationalistic and Hamiltonian Whigs rather than free market rationalists.

  6. Trump will do nothing of the sort and to believe in this is extreme naiveté. Trump has builit his financial empire by learning and using the political system. And to replace the current politcial class with his brand of autocratic/oligarchic and elitist class will not change things for the better.