The seen and the unseen of Trump’s economic policies

Trump’s domestic economic policies are really quite good. They promote economic growth, minimize regulatory burdens, reduce uncertainty and show due regard for the roles of the Congress and the States under the Constitution. I think these policies will have a very positive effect on the economy.

It is completely unclear to me why he and his team seem to believe that these solid principles are rendered void when an international border is introduced. They most certainly are not. The exact same principles that apply to domestic trade apply to foreign trade. Their blindness to this – a willful blindness in my opinion – is quite troubling.

Now, having said that, I suspect that his domestic economic policies will have a positive effect on the economy. Let’s call it +10

I fear, however, that his international economic policies will have a negative effect. Since the scope of international economics is smaller than domestic, the effect will be smaller. Let’s call the effect on the economy caused by his ill advised international policies is -5.

The net effect of his policies will be +5. The result of that +5 will be that people will see a positive and assume all of his policies are beneficial and they will point to what is seen, the +5, as proof. They will, however, be completely oblivious to what is unseen: Were his international policies as effective as his domestic policies, the net effect on the economy could have been +15.

In this way, the Trump’s failure in international economic policy will be framed as success and the wrong lessons will be learned.

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39 Responses to The seen and the unseen of Trump’s economic policies

  1. C. L. says:

    Following that line of reasoning, if he did absolutely nothing in the international venue, he’d still have a +10 positive effect from the domestic good stuff. I truly hope someone who he respects can find a way to explain this to him.

  2. Woodface says:

    You are far more optimistic than I am.

    I think it will be more like +10 domestic and -15 foreign for a total of -5… at which point roger will blame his domestic policy and claim he didn’t lean on taxation and tariffs heavily enough… and that it would have worked if not for cuckservatives trying to claim math works and gumming up the works in the process.

    • R.D. Walker says:

      You may well be correct, especially when you consider that a drop in domestic consumption will result from trade barriers.

  3. Joe says:

    It is refreshing to hear some positive assessment on domestic policy. During the election cycle it was doom and gloom on that front as well.

    I guess we will see but I don’t predict such doom and gloom on the international trade front. My prediction is tariffs will not come to fruition. It is the same hardline stance taken with the NATO debate and NAFTA debate. In both cases the initial hardline approach forced all to the table for legitimate discussions.

    • Uke says:

      I appreciate that you’re refreshed now, and I don’t mean to start an argument now, but it was never total doom and gloom, Joe.

      How many times do you recall us saying that Trump was talking like and might very well be like a minor/moderate positive in several categories, but a serious negative in one or two categories?

      Because that’s what we were saying the whole time. Virtually nobody around here was saying that Trump was Hitler or the devil or any such thing.

      And it’s not too different now, as far as I’m concerned. He’s moderated a little in a few areas like immigration, but as we’re often reminded, he’s indeed “keeping his promises now.”

      Now, if his prior rhetoric on high tariffs and protectionism really does fall through, great. I’ll be the first to cheer. But he is still talking about tariffs and big spending projects, etc. But I guess we’ll see.

      • notamobster says:

        The biggest thing most of us disagreed with, was the same as now: trade policy.

        Otherwise,we mostly said he was a huge variable/unknown.

      • Joe says:

        Uke – You make me laugh. It was banner changes and the end of the world around here for some. It’s history now but to get your feathers ruffled over my comment is over blown and missing the point.

        • R.D. Walker says:

          I said all along that I would acknowledge it when he did good things and I am. Most of his domestic economic policy is shaping up to be pretty good.

          He is praising Obamacare-lite but he pretty much promised us Obamacare-lite during the campaign so I guess he is doing what he said he would do.

          One thing is unchanging. I still think that, as a man, he is a flaming douchebag.

        • Uke says:

          I make no comment on how easily amused you are, I guess.

          You got me to comment because you were being dishonest.

          This was never the place that had nothing good to say about Trump (even from his harshest critics like myself, RD and nota).

          This was never the place that said he would be awful in every category.

          This was never the place that wouldn’t recognize him for positive accomplishments during his term.

          Again, I’m glad you’re “refreshed” now, but what is going on now should not be surprising or shocking if you were paying attention to us during the campaign (changing banners notwithstanding; those change often during election season, you should know).

  4. Squib Load says:

    I find some of the arguments that China and Mexico are trading with us on unacceptable terms compelling. China puts restrictions on the flow of capital and foreign investment, and they have a history of subsidizing exports. In fairness, so do we: See agriculture.

    Mexico encourages (facilitates?) illegal immigration. Illegal migrants were not one of the commodities negotiated to cross the border under NAFTA.

    To a certain degree of retaliatory tariffs are justified. How else do you rebuke a bad actor? Is it protectionism or chastisement?

    Do retaliatory tariffs make economic sense? Probably not. However, is maximum economic growth the sole objective?

    Sometimes the unseen is a shittier community, notwithstanding you have more purchasing power. Sometimes the unseen is moving thousands of miles away from you family because trade has economically devastated your home state.

    Economic growth may not be Trump’s main objective.

    • R.D. Walker says:

      “I find some of the arguments that China and Mexico are trading with us on unacceptable terms compelling.”

      Who cares? They are only screwing their own people. From where does this idea come that people have to buy our stuff or that we have a right to Mexicans as customers? It is ridiculous.

      Do you know what I find compelling? A 100 percent unilateral elimination of all tariffs and import fees for any import that isn’t a narrowly defined national security risk.

      Anything else is just more government regulation, more statist control, more restrictions on free people and more socialist welfare statism.

      • notamobster says:

        F-ck yeah! 100% across-the-board elimination of tariffs, trade restrictions, or any other obstacles to unfettered commerce between parties.

        Get the govt out of the business of picking winners & losers. I should be able to trade with anyone I damned well please.

      • Squib Load says:

        Every purchase being the equivalent of shopping at the duty free store in the airport is an Austrian economist’s pipe dream. It’s irrelevant to the debate.

        China’s mercantilism both hurts and helps American companies. Some win, some lose. This is deeply fucked up. The winners and losers are being determined by both our governments. The winners pretend the outcomes are somehow determined by hard work or the forces of capitalism but, that’s mostly bullshit.

        Your, “give me the freedom to do whatever I want” works until it shits on my rights and well-being. An Iowa farmer’s right to dump his government subsidized pork in Mexico requires the undercut Mexican farmer not be allowed to illegally immigrate to my city and undercut a construction worker.

        • Ben says:

          Look I am getting sick of this shit.

          Illegal immigration has nothing to do with free trade it is has and always will be illegal.

          We would all prefer the subsidies ending.

          How China chooses to punish it’s people to the benefit of some specific industries is none of our damn business as a nation.

          Does it suck for companies trying to compete for market share in china? Sure but that isn’t uncle Sams problem and it isn’t your problem.

          Its not “deeply fucked up” its international business. You need to deal with the regulatory environment where you choose to do business take what advantages you can and if you can’t over come the hurdles you fail or just don’t grow in that market.

          If you want things to be fair I hear there are some places on college campuses that you can feel comfortable knowing that equality of outcome is what matters.

          Free trade does not mean fair trade. Inherently “Fair Trade” is unfair to somebody just like when they talk about “fair share” taxes it isn’t really fair.

          You just want the entire world to bend knee and accept that they should be happy to get fucked in the ass on every deal with every company that happens to be in the US and beg for more.

          Having extra overhead in the form of government mandates is not Fair or free. Its stupid. Just because collectivist countries do it doesn’t mean we should.

          Damn it I am irritable this week. I haven’t slept and my office is 10 degrees too hot.

          Squib you’re not a bad guy I like you being here but for fucks sake we have had this same conversation before.

          If a cobblogger wants to edit this so my asshole isn’t showing so much go for it.

          • R.D. Walker says:

            Mic drop!

            I have nothing to add. 🙂

          • Squib Load says:

            Illegal immigration has much to do with NAFTA, it’s one of the root causes. We destroyed their small agriculture and other industries. To believe otherwise is to be willfully ignorant.

            Negotiated trade, which is what we have, isn’t necessarily free or fair but, it’s a formal agreement. If a bad actor (i.e. China) chose to punish their people without violating a negotiated deal, yes, none of our business. If they chose to violate a negotiated trade deal, and we catch them, which we have, it certainly is our damn business. It’s reasonable for us to expect other nations to honor trade agreements.

            Accepting violations to the terms of a trade agreement is not part of navigating a “regulatory environment.” Quite the opposite, the regulatory environment is there to protect business and consumers from bad actors.

            WTF does free trade or fair trade have to do with this?

            • Joe says:

              You are exactly right and you did not resort to looking like an asshole to make your point.

              • R.D. Walker says:

                He’s only right if you believe the heavy, lumbering thumb of the Leviathan should be applied to balance of trade when an American entity trades with another around the world.

                Of course if you believe that you aren’t a classic liberal, a fiscal conservative, a libertarian or believer in individual autonomy, individual sovereignty or personal autonomy. You are some kind of a right wing, nationalist, collectivist, statist.

                • Joe says:

                  Name call all you want but there is only one side here advocating for more regulation by name of multistate trade agreements and then in the same breath bitch about applying enforcement mechanisms to ensure compliance with all parties.

                  A globalist by definition does not believe in individual autonomy. The only way the system works is to regulate all things. Hence the thousand page bills of environmentalism, judicial, and even immigration concerns in each of their trade bills. You can’t then claim economic liberalism as it is not consistent. For your version of trade to work it take international collectives or organizations to manage. You would trade our elected government managing trade for unelected international bodies just so long you could continue to define success by cheap LCD tv imports.

  5. R.D. Walker says:

    “Name call all you want but there is only one side here advocating for more regulation by name of multistate trade agreements…

    Yeah. You. TPP ended 40,000 tariffs. By pulling out of it, as you supported, 40,000 tariffs stay in place. You can pretend that “fair trade” isn’t raw statism, but it is.

    I reject your contention that TPP increased regulation. The seen is it’s 1,000 pages. The unseen is the 100,000 pages of regulations it disposed of.

    Trump ended TPP because he is a protectionist and TPP was a step towards freer trade. Going from 100,000 pages of regulation to 1,000 is absolutely, positively consistent with advocating for free trade.

    • Joe says:

      Reduction of 40000 tariffs is not factually supported and either is reducing 10000 pages. The tariff reduction number you are speaking counted tariffs reductions that were seen with other bills and secondly the number wasn’t even 40000 when you double counted them.

      You continue t advocate for more regulation through international bodies. I don’t know how that is lost on you.

      • R.D. Walker says:

        “Reduction of 40000 tariffs is not factually supported and either is reducing 10000 pages.”

        Says you. Cato disagrees. I believe Cato.

        What tariffs that TPP would have eliminated are being eliminated by other bills now? I don’t think any at all.

        I advocate for the unilateral end to all tariffs, trade restrictions, border taxes or any other restraint on trade but for a narrowly defined set of national security matters.

        That is absolutely, positively NOT advocating for more regulation.

        Your man Trump is explicitly calling for trade barriers to be erected. That is what I oppose and you seem to support.,

        • Joe says:

          Show me where CATO uses that exact number of 40,000.

          I have read the working paper and it isn’t in there.

          • R.D. Walker says:

            It says that seven of the 12 countries would eliminate 100 percent of tariffs.

            It would eliminate virtually all tariffs within 16 years in all 12 countries.

            It precludes the expected increase in tariffs coming in Japan and Vietnam.

            It reduces regulations on stuff like US GMO food exports.

            I read somewhere that if you tally the benefits as compiled by Cato, it comes to about 40,000.

            Now, I don’t want to nit-pick over a number. What is beyond dispute is that TPP would have radically reduced the number of tariffs, trade restrictions and burdensome impediments to trade. Whether the number of tariffs reduced would have been 20,000 or 40,000, a shit load of tariffs would have been eliminated.

            • Joe says:

              Numbers do matter but thanks for confirming the 40,000 number was doubled from all previously stated.

              My point, for any gains in tariffs reductions you would have had the potential for foreign corporations to bypass our sovereign courts and argue before international governing bodies. State sovereignty would be in jeopardy as these bills govern much more than trade. That is a fact.

          • Ben says:

            We are not advocating huge trade deals we are saying free Americans need NO TRADE DEALS.

            If china wants to mess up things for the relatively few Americans who do business in china it is up to those citizens to deal with. Its a risk of doing business. It is none of uncle sam’s business.

  6. R.D. Walker says:

    “A globalist by definition does not believe in individual autonomy. The only way the system works is to regulate all things.”

    I don’t know what the hell definition of “globalism” you are using but this is Webster’s definition…

    Definition of globalism: a national policy of treating the whole world as a proper sphere for political influence —

    By that definition, I am not even a globalist. Nothing I am advocating here or in any other post where I discuss free trade am I advocating the expansion of American political influence. Quite the opposite actually.

    Free trade is the opposite of statism and control by the administrative state.

    Free trade reduces and eliminates government control of commerce.

    Free trade is pure, individual liberty.

    Free trade represents the best means of growing the economy.

    Free trade provides the best outcome for the most people.

    • Joe says:

      Free trade is all those things but is not what you advocate for in practice. Furthermore the free trade you speak of doesn’t have to be negotiated in secret. TPP is dead for now but in the minds of the international regulation crowd it reinforced the need for more secrecy in the future. Watch, the next international leviathan trade bill will not be discussed until ratified.

      • R.D. Walker says:

        Free trade is exactly what I advocate for in practice. I support free trade and I support any incremental steps in the direction of free trade.

        The parts of TPP that were negotiated in secret where the parts that put Asian countries at risk of various forms of retaliation from China and yes, often times international diplomacy must practiced in secret. It would seem that would go without saying.

        Damn, I can’t even negotiate a business deal without nondisclosure agreements all around.

        Put away the tin foil hat dude. TPP wasn’t going to put you in a concentration camp. Sheesh.

  7. R.D. Walker says:

    “For your version of trade to work it take international collectives or organizations to manage. “

    That is exactly what we have now and that is exactly what Trump will cause to explode in scope and scale. Once he starts fucking with tariffs, governments around the world will follow suit and even where relatively free trade exists today, millions and millions of pages of regulations, laws and taxes will bloom.

    I oppose that.

    I don’t see why this is lost on you.

  8. R.D. Walker says:

    “You would trade our elected government managing trade for unelected international bodies just so long you could continue to define success by cheap LCD tv imports.”

    I would trade the administrative bureaucracy of the Leviathan managing the trade of free people for a unilateral, 100 percent end to all trade regulations, tariffs, import taxes and similar restrictions except in the case of very narrowly defined national security matters. That’s what I would trade.

  9. Uke says:

    Here are the 3 choices we have control over:

    1) Status quo: Moderate to heavy tariffs/regulations in all countries.
    2) We lower our own tariffs, while other countries retain theirs.
    3) We negotiate with countries in order to get tariffs/regs lowered in all participating countries.

    #1 is the most economically distasteful option, and you can implement #2 (significantly better than #1) unilaterally, but then trade protectionists will whine about the “unfairness” over the situation.

    However, when you attempt to set up the most economically beneficial situation, #3, trade protectionists whine that it (gasp!) took paperwork and a committee to set up.

    So we are left at #1, the worst option, but ultimately trade protectionists are quite happy, because that’s where they wanted to be in the first place.