On Inauguration Day Donald Trump was sworn in as the 45th president of the United States of America. His inaugural address was stern, painting a bleak vision of America, yet promising to resurrect America from its “carnage”.
The paramount theme of his address, which will be the defining issue of his administration, was to revitalize America by protecting it from foreign competition. He will metaphorically wall off America. “From this day forward, it’s going to be only America first, America first.” “We will follow two simple rules; buy American and hire American.”
This echoes his campaign theme of foreign competition “stealing” American jobs and American companies. He said in his address, “Protection[ism] will lead to great prosperity and wealth.”
Trump also appeared to set the tone for a type of Jacksonian democracy. “January 20th, 2017 will be remembered as the day the people became the rulers of this nation again.” As one with Jeffersonian-libertarian ideals, I find the concept of the devolution of power from a dominant federal government to the people appealing. But that is not what President Trump meant.
What he meant is that he, Donald J. Trump, President of the U.S.A., will bring deliverance to America. That is, a leader with vast powers, often unlimited by Congress or the judiciary, will redeem us from “carnage” by edict. Recall what he said in his nomination acceptance speech: “Nobody knows the system better than me, which is why I alone can fix it.”
President Trump set the bar high for his Administration. He pledged to bring back jobs from abroad, revitalize our manufacturing industry, resurrect the middle-class, eliminate inner-city crime and poverty, rebuild America’s infrastructure, eradicate radical Islamic terrorism, and unite Americans under one purpose. “We stand at the birth of a new millennium …”
It is The Big Promise.
One wonders why politicians make audacious claims that cannot possibly be attained. Yet President Trump does exactly that because he believes he can do it. That will be the tragedy of his Administration.
Edict, fiat, mandate, and orders cannot attain lofty goals. Only good policies based on good ideas (ideology) can do that. Donald Trump is devoid of ideology and history abounds with good-intentioned, failed politicians like Trump whose “pragmatic”, “sensible” policies based on bad economics have yielded unintended, unseen, negative consequences.
Trump follows a long line of populist leaders who use tired terms like “America first” or the “Forgotten Man” to incite their followers. They promise big and deliver little.
Trump makes a fundamental error in his plan to revitalize America. It is a fundamental error that people with little understanding of economics or history often make. Because of this fundamental error his grandiose plan to wall off America and deliver us from “carnage” will fail.
The history of the world is the best teacher of what has worked and what doesn’t. And history, including the history of America, tells us that free trade with other nations has brought freedom and prosperity at home, prosperity to trading partner nations who have engaged in it, and peace among trading nations.
President Trump is committing this fundamental error by embarking upon a protectionist path that may bring higher costs for consumer goods, lower employment as higher costs leave consumers with less disposable income, lower employment as our exporters are denied entry to foreign markets, a shortage of once plentiful goods supplied to us from imports and which America has no capacity to manufacture, decreased international opportunities for American manufacturers as other nations replace us in world trade, and rising world tensions as the order which benefited all trading nations is displaced by tariff walls.
Trump’s nationalism and populism are based on economic myths. if you look at the actual data over the past 35 years since NAFTA (which Trump claims is the worst trade deal, ever), the reality is quite different:
- We are still major exporters;
- We’ve gained more jobs than we’ve lost;
- We have a thriving manufacturing sector—since NAFTA industrial production has increased 58%;
- Capital investment into efficient automation has been the prime reason manufacturing jobs have declined—we now create 100% more in value with 37% fewer workers;
- Nonmanufacturing jobs pay as well if not more than factory jobs. Or, to put it another way, we lost 7 million “good” jobs but gained 32 million jobs that pay equal or better wages.
- The middle-class “decline” is because they have gotten richer as they have ascended into higher income levels.
These data can be easily verified by Google searches on public data bases such as the Federal Reserve and the Census Bureau. I would hope President Trump avails himself of these data.
Protectionism will not revitalize American manufacturing; it will harm it. Rather than helping middle income Americans, they will be poorer. Rather than creating jobs, more unemployment will result. Inner city crime and poverty will not be helped by protectionism. Rebuilding America’s infrastructure will result in wasteful boondoggles that will benefit a few but will make us poorer by diverting scarce economic resources to projects favored by the government. Obama’s $450 billion spending on infrastructure resulted in no lasting benefit to Americans.
Trump’s Big Promise will fail. One can hope that much of what he says is empty rhetoric. That is most likely false hope. Already President Trump has shown he is no different than candidate Trump, with his vain, thin-skinned presidential Tweets. But, to be fair to President Trump and his new Administration, wait 100 days and see what he does and ignore what he says. Let him prove us wrong.