Donald Trump Is Either Amazingly Dishonest or Incredibly Ignorant

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Whether true or not, it's accepted wisdom that presidential candidates play to the passions of their Party bases in the primaries only to moderate their views with the general election in mind. If so, Donald Trump plainly didn't get the memo. While it's horrifying to think that the Republican base has perhaps gone the way of protectionism and currency devaluation, the fact that Americans as a whole are such rabid consumers of the world's plenty signals that as a nation, we're lovers of free trade. Trump has built a campaign around erecting walls - literally and figuratively - in front of a country made immensely rich thanks to a lack of both.

In his speech on Tuesday billed as being about making "America Wealthy Again," Trump called for policies that would render the U.S. quite poor. As he put it, "Globalization has made the financial elite who donate to politicians very, very wealthy - but it has left millions of our workers with nothing but poverty and heartache." Many books could be written to point out all that was wrong with Trump's statement, but with mild brevity in mind, it's worth addressing certain aspects of Trump's staggering economic confusion.

Up front, an obvious truth requires stating. We produce so that we can consume. That's why we get up and go to work each day. We want to trade the product of our labor for what we don't have.

Applying all of this to Trump's mindless assertion about globalization, major U.S. companies like Apple, Dell Computer, Nike, and Wal-Mart generally don't manufacture their wares in the United States. Instead, they employ the world's labor force with an eye on keeping their prices as low as possible. Broad American wealth springs from this truth. Thanks to the globalization of production, Americans can exchange their labor for computers, shoes and everyday items at a fraction of their former cost.

That the founders, executives, and even regular workers at each of these companies are quite well-to-do is an explicit market signal that these globalized businesses are doing very well by their customers; Americans most notably since the U.S. is the world's biggest market. For companies to prosper they quite simply must please the consumer. With the companies mentioned we're not talking about obscure producers of goods for the elite, rather we're talking about mass producers of goods for yes - the masses.

This reality also exposes Trump's droolings about millions of workers suffering poverty and heartache as wildly false. We know this because individuals can only consume insofar as they produce first. That Americans are voracious consumers of the world's plenty, that Americans import more than any country in the world, is an incontrovertible signal that Americans are benefiting mightily from a globalized world. Indeed, Wal-Mart alone doesn't exactly serve Beverly Hills, Greenwich and the Upper East Side, but it does serve many of the U.S.'s relatively less prosperous cities full of the very individuals Trump says are impoverished.

What this should remind the passably sentient is that Americans love globalization. We know this simply because it is globalized American companies that are some of the most valuable companies in the world. With regard to one of Trump's main policy pronouncements, the New Yorker is plainly wrong.

Trump promises to rewrite what he deems "failed trade policies" including NAFTA and TPP, but his every assertion reveals stunning confusion as opposed to knowledge. For one, presidents can't write laws as much as they sign them. Without the consent of Congress, Trump will sign the rewrite of nothing. He can thankfully only propose.

More striking about all this is that when talking about NAFTA and TPP, Trump exposes for all to see that he knows nothing about what he speaks. Were he in possession of a clue, he'd know that the U.S. is already an open market. The average U.S. tariff on foreign goods is 1.4%. Importantly, the low tariffs are the source of U.S. wealth. We once again produce in order to get what we don't have, and the low tariffs mean Americans benefit from the most talented producers on earth vying to serve their needs; the world's producers fighting feverishly for U.S. market share so that they can give Americans a bargain. Poor countries import very little of the world's product, while rich ones import goods in abundance.

But even the above doesn't fully explain the true beauty of free trade. What makes it unrelentingly magnificent is that when we're open to imports, the fact that we are maximizes the possibility that we can do the work that most matches our talents. When people do what they're comparatively good at, they're much more productive. Open markets are once again the driver of staggering American wealth, not a barrier.

Back to what Trump deems "failed trade policies" and legislation that supposedly amounts to "a rape of our country," rarely has his policy illiteracy been more evident. We're he even slightly knowledgeable about U.S. driven trade deals, he would know that precisely because the U.S. is already an open market, trade pacts are generally about foreign countries like Vietnam (tariffs on U.S. cars and parts are in the 50-75% range) opening their markets up to U.S. production. Very specifically, "failed trade policies" are the very policies meant to open up foreign economies to goods and services hatched in the United States.

On the subject of China, Trump said "I am going to instruct my treasury secretary to label China a currency manipulator. Any country that devalues their currency in order to take advantage of the United States will be met with sharply." Once again, books could be written about all that's wrong with those two short sentences. Back to reality, China chose to peg its currency to the dollar in 1994 precisely because it wanted the yuan to be strong and stable. It's been to avoid devaluation that China has pursued a currency arrangement that countless countries around the world similarly pursue. The world, for all intents and purposes, is on a dollar standard; China's dollar standard very explicit. The problem all this time has been the U.S. Treasury. When the dollar is weak, so are the myriad non-U.S. currencies pegged to the dollar weak. When the dollar is strong, so are those same currencies strong.

Trump's delusional view of the world has him believing that currency devaluation is the source of prosperity, but as the U.S. economy is merely a collection of individuals, it's never been explained by the presumptive GOP nominee how Americans who earn dollars will be made better off economically if those dollars are being devalued. Also missed by Trump is that companies, jobs and prosperity always and everywhere spring from investment, but the latter logically shrinks when the currency is devalued. Investors, to state the obvious, are buying future dollar income streams when they commit capital to the ideas and companies of the present and future.

All of this is extra important simply because Trump's China bashing is an explicit signal that Treasury policy in a Trump administration will be focused on a weak greenback. Presidents generally get the dollar they want, at which point all American workers will suffer eviscerated paychecks that will command less in the marketplace in concert with sharply reduced work opportunities thanks to the massive capital flight that is always the result of currency debauchment. To top it all off, Trump's promise of tariffs amounts to him piling on the very middle of the road voters he claims to want to help.  Their dollars will buy less, investment in companies that might employ them will shrink, and then their work will be taxed at rates up to 45% given Trump's desire to slap tariffs on foreign goods Americans rely on.   

Looking back to when Trump began his campaign, apologists at the time said his policy droolings were all rhetoric. What might they say now? In a national campaign Trump continues to talk up the economic policies of failure. If he's still putting on a show, this indicates that he's one of the most dishonest men to ever run for national office. Assuming his know-nothingness about globalization is actually what he believes, it's then easy to say that Trump is easily one of the least informed candidates to ever vie for national office. The latter is certainly true about Trump vis-a-vis past Republicans.

Tuesday's speech revealed someone who is dishonest, tragically confused, or both. Do Republicans who seemingly have a stake in the Party's long-term health really despise Hillary Clinton so much that they might get behind a "Republican" who is so plainly an embarrassment to the Party? Time will tell.

The only good news that springs from either a Trump or Clinton presidency is that so unpopular will either one be, gridlock will be the happy rule no matter who is the 45th president. Thank goodness. Clinton reveals her policy confusion in grating voice fashion, whereas Trump loudly promotes his awe-inspiring ignorance as a faux badge of populist honor.

Never has the Constitution's separation of powers been more important than it is now. Gridlock is the only thing that can save what remains a great country from hard times driven by unrelenting block-headedness. This country surely deserves better.

John Tamny is editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks, and a senior economic adviser to Toreador Research and Trading ( He's the author of Who Needs the Fed? (Encounter Books, 2016), along with Popular Economics (Regnery, 2015).  His next book, set for release in May of 2018, is titled The End of Work (Regnery).  It chronicles the exciting explosion of remunerative jobs that don't feel at all like work.  

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