Politicians choose words carefully. Even Trump, when his speechwriters write then down for him.
So what does he mean in yesterday’s economics speech by what he chose to call his “American System”?
The words echo, no doubt intentionally, Henry Clay’s “American System” promoted at a time when laissez-faire was king, Clay’s programme promoting instead a three-legged statist mongrel:
This envisioned a protective tariff, a national bank jointly owned by private stockholders and the federal government, and federal subsidies for transportation projects ('internal improvements').
More government and more protectionism. This gives you a starting point to understand what Trump means when he declares he would “replace the present policy of globalism … and replace it with a new policy of Americanism.”
This is “America First” meant in precisely the same sense as Winston‘s “NZ First,” with no understanding of that single essential ingredient that did make America great: liberty, and an understanding of what made it and what it meant.
Sure, he talks (this week) about removing destructive regulations and lowering taxes – complete with supply-side voodoo avoiding the need to mention what commensurate spending cuts he would make – something no serious candidate could do when debt is at the moon and back -- and all in the same breath as he talks about “renegotiating” trade deals, which means in Trump-speak precisely what the less mealy-mouthed Henry Clay was pleased to simply call protectionism.
And you can tell by the time spent in the speech about tariffs and walls, about NAFTA and Mexico, about China and the WTO, and about trade deficits and “jobs going offshore” that this is where is heart truly lies: He would make America mercantilist again.
Just as he’s always said he would. That much, you can believe.
- “Oxford Economics found that if fully implemented, Trump's economic, tax and immigration policies would cost 4 million U.S. jobs, weigh down global growth and U.S. consumer spending, and could spark a trade war with other nations. "Combining these policies together, the impact could be significantly negative for the U.S. economy," says Jamie Thompson, head of macro scenarios at Oxford Economics.…
“Thompson argues that Trump could hurt the very workers he says he'll help in America's manufacturing sector. In Oxford's ‘adverse case scenario’ Trump slaps a 35% tariff on goods coming from Mexico, like cars and air conditioners. But the problem is that almost half of the parts in those cars and ACs originate from U.S. suppliers. In other words, U.S. manufacturers who ship to Mexico stand to lose customers if the U.S. imposes a tariff on the products they contribute to.”
'President Trump' would cost U.S. economy $1 trillion - CNN
- “Trump never mentions the $10 trillion hit to the economy from his deportation plan.” ~ Adam Khan
- “Once again demonstrating that he has no understanding of the concept of comparative advantage, Donald Trump slammed Ford Motor Company for announcing that it would move all its small-car production to Mexico.”
Trump Slams Ford – ECONOMIC POLICY JOURNAL
- Lawrence Reed: “The very best response Ford could make to Trump would be this: "It's none of your damn business where we want to build or move a plant. There's nothing in the Constitution that says the President gets to decide where a company puts its manufacturing facilities. We are not your slaves. This is America, not North Korea, and you're just a Mussolini wannabe. Buzz off."
Ford fact checks Trump: We will be here forever – CNN
- “There is no such thing as the Infrastructure Fairy that takes government spending and magically turns it into economic growth.”
Infrastructure Spending Does not "Grow the Economy" – Patrick Trombly, MISES WIRE
- “The economy is currently expected to grow by roughly 2 percent a year, and economists say Trump's proposed restrictions on immigration would be among the many things hampering his ability to double that rate of expansion. If growth remains around a more realistic 2 percent, Goldwein said, Trump's plan would add roughly $5 trillion to the nation's debt.”
Economists: Trump's economic plans depend on unlikely growth – CHICAGO TRIBUNE