Monday, 29 February 2016

Fact-Checking Trump on Trade

“Donald Trump is unfit to lead a great political party, let alone America.
It's time to fire him. Our cover for Asia and the Americas this week”

The Economist

The Cato blog & Washington Post have been fact-checking Trump on trade:

Watching the Presidential primary debates, there are numerous instances where I – and no doubt many others here at Cato and elsewhere – think, “I should really correct that inaccuracy in a blog post tomorrow.”  But sometimes you wake up and find someone else has already done the job for you.  Here are Washington Post fact checkers Glenn Kessler and Michelle Ye Hee Lee skillfully taking down one of Donald Trump’s ridiculous statements on trade:

_Quote_IdiotI don’t mind trade wars when we’re losing $58 billion a year [to Mexico], you want to
know the truth. We’re losing so much. We’re losing so much with Mexico and China —
with China, we’re losing $500 billion a year.

Trump has the numbers right on the trade deficit with Mexico and overstates them with China — but he gets the economics very wrong in both cases. A trade deficit means that people in one country are buying more goods from another country than people in the second country are buying from the first country.

So in Mexico’s case, Americans in 2015 purchased $294 billion in goods from Mexico, while Mexico purchased $236 billion in goods from the United States. That results in a trade deficit of $58 billion. In the case of China, Americans in 2015 bought $482 billion in goods from China, while Chinese purchased $116 billion from the U.S., for a trade deficit of $366 billion.

But that money is not “lost.” Americans wanted to buy those products. If Trump sparked a trade war and tariffs were increased on those Chinese goods, then it would raise the cost of those goods to Americans. Perhaps that would reduce the purchases of those goods, and thus reduce the trade deficit — but that would not mean the United States would “gain” money that had been lost.

Trump frequently suggests, as he did in the debate, that Mexico could pay for the wall out of the $58 billion trade deficit. But that is nonsensical. The trade deficit does not go to the government; it just indicates that Americans are buying more goods from Mexico than the other way around.

Indicating that Trump either knows less about who wins from trade than he should; or he does knows and simply doesn’t care.


  • “Everyone wonders why Trump doesn't have to be accurate, logical, or especially knowledgeable about policy to hold his supporters -- why he can say and do things that would disqualify any other candidate -- why evangelicals give him a pass on his dubious Christianity and personal morals -- why Tea Partiers give him a pass on his crony corporatism -- why constitutional conservatives give him a pass on his affronts to individual rights and limited government -- why even members of the left's favorite ‘victim’ classes, including some blacks and Hispanics, not only give him a pass, but like what he represents.
        “Trump is succeeding with them all, not by what he thinks, or what he makes them think. He is succeeding by how he makes them FEEL about themselves and their country (which they experience as interconnected).”
    An Epiphany About the Appeal of Mr. Trump – Robert Bidinotto, FREE THE ANIMAL
  • “The current problem goes beyond excruciatingly bad manners. What we increasingly lack, and have lacked for some time, is a sense of the moral underpinning of republican (small r) government. Manners and morals maintain a free state as much as laws do, as Tocqueville observed long ago, and when a certain culture of virtue dies, so too does something of what makes democracy work. Old-fashioned words like integrity, selflessness, frugality, gravitas, and modesty rarely rate a mention in modern descriptions of the good life—is it surprising that they don’t come up in politics, either?”
    The Age of Trump – Eliot Cohen, THE AMERICAN INTEREST
  • “Donald Trump appears to have high levels of support among the nation’s intolerant population, according to a New York Times deep dive into polling data…”
    Nearly 20% of Trump Fans Think Freeing the Slaves Was a Bad Idea - TIME

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