Sunday, February 19, 2017

Trump in Melbourne Spills His Economic Plans and How Non-Free Market They Are

On Saturday, President Donald Trump traveled to Melbourne, Florida, to give a campaign speech to a crowd of cheering supporters.

He dropped a few hints about his developing economic plans. They are far from anything a free market economist would recommend.

Most concerning, he said:
 You want a health care system and by the way, we are going to be submitting in a couple of weeks a great healthcare plan that's going to take the place of the disaster known as Obamacare.
It will be repealed and replaced. 
"Replaced" suggests that Trump is going to keep government involved in the healthcare insurance sector. This, of course, is not free market. There is no reason for government to be in the healthcare insurance sector any more than it needs to be in the auto or housing insurance sector.

He again displayed his economic ignorance of basic economics, specifically comparative advantage, when he said:
 [W]e believe in two simple rules. Buy American and hire American. We believe it.
He also indicated he wants to spend a massive amount of government money on infrastructure:
 We need members of both parties to join hands and work with us to pass a $1 trillion infrastructure plan to build new roads and bridges and airports and tunnels and highways and railways all across our great nation.
There are two problems with this. First, as David Stockman has pointed out it is a myth that infrastructure in America is crumbling. Second, as Walter Block and Brad Edmonds have demonstrated, there is no need for government to be involved in infrastructure building.

He also indicated that a tax of 35% would be placed on any goods coming into the country that were once made by American workers but where the jobs were transported overseas:
You want...Millions of new jobs and more product stamped with those beautiful, beautiful words, “Made in the USA.” You want to make it easy for companies to do business in America. And harder for companies to leave. We don't want companies saying, "everybody is fired. We're moving to another country. We're going to make the product. Sell it across the border and isn't that wonderful." Not going happen anymore.

We're going to have strong borders and when they want to sell that product back across our border, they're going to pay a 35% tax and you know what, they're never going to leave. They will never, ever leave.
Just another example of Trump's ignorance of the basic economic principle of comparative advantage.

Bottom line: We have in the current United States president a person who reflects the basic economic ignorance of the masses. His policies will suffocate the U.S. economy and lower the standard of living for all of us.



  1. --- [W]e believe in two simple rules. Buy American and hire American. We believe it. ---

    It is hard to understand who is this "We" is but it cannot be the entrepreneurs who read Market signals and import goods and services for a robot, or the American cobsumers who maybe say that during casual conversation but never seem to live by such "lofty ideals". So in all probability he is talking about three sets of people: the unions, the cronies and the gullible Trumpistas with their magical thinking.

  2. "We have in the current United States president a person who reflects the basic economic ignorance of the masses."

    I wouldn't confine this to the masses. Trump's economic ignorance, while currently focused on international trade, is shared by every president, governor, and federal and state legislator who passes and enforces, and every Keynesian economist who provides intellectual support for, all kinds of restrictions on domestic trade and prosperity-reducing measures such as crony subsidies, minimum wage, health & safety regulations, sales taxes, capital gains taxes, etc.

    There's no economic difference between trade between neighborhoods and trade across national borders. Restrictions on all of them are worthy of condemnation.

  3. I'm always amazed how protectionists (aka economic safe spacers) know my financial situation and budget better than me.

    1. I learned some time ago that statists know every facet of our lives better than we do. They know exactly how we should live and with enough violence and just the right people they'll make a utopia of the world.

  4. It's a shame that "the fatal conceit" is only figurative...