This just in: It has been said that economics is a “soft science” because the outcomes of certain actions are not always predictable. In fact, there is an entire field of economics known as Behavioral Economics, that tries to find out why this is so. This diversity of outcomes from a repeated experiment is why we find several economic opinions that all differ with regards to nearly any given topic.
But there are some things we can count on, either by observation or irrefutable logic. On these types of issues, the economic world is in nearly unison with their recommendations.
One such issue is Trump’s fantasy world of economics. Nationally and abroad, the absurdity of Trump’s actions are astounding anyone that is paying attention.
Let’s look at a broad view of what I mean.
I will lay this out in steps, trying to put order to something that is nearly random.
- Trump wants to deport millions of illegal aliens. These are people that have raised families here. They pay taxes. They commit crimes at a much lower rate than others. And, this is important, they are filling many of the jobs that most of us would not take due to the low pay. Trump’s policy of deporting these people is, in large part, justified by “They are taking away jobs that belong to U.S. citizens.” Somehow, Trump is saying that for every field hand we deport, a high paying job is Silicon Valley opens up.
- Trump, and the Republican Congress passed a tax bill that takes from the nation as a whole, and gives to the vastly rich. There are two ideas behind this: (1) Rich people will hire us to mow their lawn if they have more money. This is known as Trickle-Down economics and is the most widely disproven economic theory there is. And (2) Corporations will use their tax breaks to raise wages. This makes the assumption that corporations are benevolent. Instead, companies exist to make a profit. If they already have employees that come to work for $x per hour, why would they pay more? In fact, they didn’t. Instead, they are in the process of buying back company stock which has the effect of enriching shareholders, not workers.
- Trump cut subsidies for Green Energy, one of the fastest growing industries in the world today. Many of the jobs in this industry are good paying. Instead, Trump is investing in coal and other fossil fuels; an industry that is rapidly shrinking.
- Trump dropped out of the Trans Pacific Partnership and is now threatening to drop out of the World Trade Organization. There is no clear reason for doing this but the outcomes are certain. These are the exact steps one would take if they wanted to reduce the amount of goods we sell overseas. Confusingly, Trump complains about the Trade Deficit all the time. He thinks its a bad thing (it’s not) and then he does the exact opposite of what it would take to increase exports.
- Trump is putting tariffs on everyone that pisses him off. As president, he can levy a tariff as high as 25% if it is deemed necessary for national security. So, suddenly, Canadian cheese imports are a threat. The result of this is two-fold. First, is causes our trading partners to levy counter-tariffs against us. These counter-tariffs raise the price of our goods overseas. Harley Davidson is a good example of this. Tariffs placed on their product means they will sell fewer of these overseas…unless….they move the factories and jobs overseas…which is exactly what Harley Davidson is doing. Secondly, we now pay more for good that are imported. If we put a tax on imported steel, then everything that uses imported steel will cost us more. Already we are seeing spikes in goods like automobiles.
In summary, Trump touts jobs and then does everything he can to eliminate them. He claims he is putting more money into the hands of the middle class and yet, they small amount we all get from the tax cut is quickly eaten up by the higher prices we are paying for anything imported.
And here is the kicker. Europe, China and the rest of the world want to make this stop. they actually want to know what it will take to make Trump stop this Globally Destructive behavior.
The thing is, even Trump doesn’t know what he wants. The conversation goes like this…
Trump: Here are some tariffs on the rest of the world.
The World: What can we do to make you change your mind?
Trump: I have no idea.
Time to save the world.
Up, up and away…