Tuesday, 4 October 2016

Trump's economic plan is completely detached from reality [updated]


It’s not just his campaign and his campaign adviser that appear completely detached from reality – or his megalomanical notion that “he alone can fix” things that helps to suggest reality and he are total strangers: his economic “plan” just becomes more imaginary as more details are released, to the point says Cato’s Bill Watson that ridicule is now all it truly deserves:

Earlier this week, the Trump campaign released a white paper written by senior policy adviser Peter Navarro to elaborate and quantify the candidate’s economic plan. The goal of the paper is to explain how Donald Trump’s promises to renegotiate trade agreements and raise tariffs will promote economic growth and raise revenue for the government.
    The plan betrays embarrassing ignorance of how trade negotiations work and a farcically simplistic and erroneous understanding of economics. In essence, the plan justifies Trump’s policies by re-imagining how the world works.
    Trump’s entire view of trade and its impact on the U.S. economy is wrong. He believes that trade is good for the United States only if the United States exports more than they import – that mutually advantageous trade relations are instead a “contest” between countries, which the US is losing because trading partners sell more stuff to the US than the US sells to them.
    He claims to be the tough-guy who will the save the American economy from these shrewd foreign cheaters and the inept government officials who let them beat us.
    Since that’s not how things work in the real world, he has to rely on falsehoods and bad economics to justify disastrous policies. This new white paper is just a continuation of that tactic.
    But you don’t have to take my word for it. If you think I’m being too harsh or would like to learn more about the “Trump Trade Doctrine” and what’s wrong with it, I recommend you read lengthier condemnations from experts who have called the plan’s analysis “
truly disappointing,” “not only wrong, but foolish,” “magical thinking,” “a complete mess,” and the sort of thing “that would get you flunked out of [a remedial] economics class.”

Just the sort of thing then (as one commentator concludes) that “you might come up with if you were a wealthy landlord and reality television personality who ran for president on a whim without learning anything about issues or public policy.”

UPDATE: It gets worse, because Trump doesn’t even understand the free-trade deals he’s criticising. Mary O’Grady in the Wall Street Journal, for instance, explains that while Trump criticises the North American Free Trade Agreement (NAFTA) as being ‘'”the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country” – and criticises it on the basis that it encourages importing from Mexico instead of exporting from the US --

he doesn’t seem to realise that Mexico gave up more tariff protection than the U.S. did when the agreement was signed in 1993.

Get that? A fairly basic thing to know, right?

So if Nafta were re-opened, and if a standoff then leads to the end of Nafta, then both countries would revert to their previous commitments under World Trade Organization rules which would actually increase Mexican tariff protection relative to the US, which is precisely the opposite of what Trump claims to want.

You couldn’t make this stuff up.


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