A Walk of Poland's Streets Could Erase Donald Trump's Economic Illiteracy

A Walk of Poland's Streets Could Erase Donald Trump's Economic Illiteracy
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Warsaw, Poland – A healthy and fit, but surely older Polish man stood outside a Caffe Nero in Warsaw.  He was handing out flyers meant to promote a new restaurant in the area.

This was notable for two reasons: for one, the weather outside was below zero.  For two, seniors in the U.S. aren’t normally seen working in this kind of weather.  The two Poles I was with explained that the nature of work is different in Poland.  While more and more American seniors retire in their golden years, or they work for fun, difficult work in a country only thirty years removed from the cruelty that was communism is still a necessity.

Donald Trump’s inexcusable decision to slap tariffs on steel and aluminum (after having already foisted duties on washing machines and solar panels) came to mind while watching this man toil in temperatures that would have the reduced the average American (young or old) to misery.  According to Trump, “trade wars are good.” In confidently asserting what is the opposite of true, Trump reminded his flock that he’s never lived in a country where trade wasn’t free.  Figure that no one who has would ever make such an ignorant statement.

That open trade amounts to a daily raise for its beneficiaries is a statement of the supremely obvious.  Well, of course it is.  When you have the world’s talented working feverishly to serve your needs, your cost of living plummets.  Such is the genius of competition.  And when your cost of living plummets, your standard of living soars. 

Only a leader who has never lived in a country closed off to the world’s plenty could so thoughtlessly deprive his citizens of competition for their dollars.  President Trump has done just that.  When Nancy Pelosi attacks tax cuts that leave more of what’s earned with those who earned it (referring to the cuts as “crumbs”), Republicans manufacture all sorts of outrage.  Yet when Trump works to take back those tax cuts through tariffs, they cheer. 

And while the list of Trump partisans who should know better is endless, witnessing Charles Payne of the Fox Business Channel defend that which vandalizes basic economics is particularly galling.  If a President Clinton had done the same, Payne would either expose her ignorance, or secure pundits on the right to aid him in stating the obvious.  Instead, Payne defends the inexcusable with totally backwards reasoning: that which always and everywhere causes harm is necessary to allegedly reverse America’s “slide.”  Shame on Payne for insulting the U.S. with his pretense that the U.S. is in trouble, and needs to be protected by its president.  While Trump’s witless protectionism has long been evident, Payne knows better.  It merely turns out that a Democrat has to be in the White House for Payne to combine reporting with what he knows.

And while it’s possible and surely hopeful that Trump’s idiotic decision will be held up by global realities, let’s be clear how incorrect both the president and his media cheerleaders are.  To be blunt, tariffs are the quickest path to economic reversal. 

They are simply because free trade is the surest path to progress.  It is given the basic truth that an economy is nothing but a collection of individuals.  Not only are individuals advantaged when the world competes for their paychecks, their ability to do the work that most amplifies their unique talents grows the more that the division of labor is – yes – divided. 

While even the wisest of the wise, and the most mechanical of the mechanical, would waste all of their existence (while failing impressively) manufacturing something as basic as a toaster oven, global cooperation among producers (all free trade is) results in toaster ovens the cost of which amounts to a fraction of daily wages.  Here lies the genius of open trade: when we’re dividing up the work, we’re specializing.  And when we’re specializing, we’re much more productive.  When we’re much more productive, our earnings soar.

Applied to the U.S., the fact that its citizens earn at a level that makes them the envy of the world is a direct result of the U.S.’s historical openness to the world’s plenty.  Yes, we’re already Hong Kong.  That’s why we’re so rich.  While any tariff is too much, average U.S. tariffs of 1.4% on foreign goods have rendered Americans most likely to benefit from the income-enhancing specialization that is the inevitable result of free trade.  This is the source of our wealth that amounts to much more than crumbs. American seniors don’t toil in subzero temperatures simply because their specialized work born of free trade has long since freed them from the backbreaking.  It’s only in countries historically closed off to the world’s production that people are forced into work that has nothing to do with their skills.  And that forces them outside for a paycheck when they should be inside.  Trump would gain endlessly from walking the streets or Warsaw, while Payne might at least retrieve his conscience.

To all this, both would and will talk about “jobs.” Oh yes, jobs. Poles have long had them, and even had them during the communist years.  A lot of good it did them. Indeed, the dirty little secret is that people living in countries stuck in the past through force are always working.  What choice do they have? Policies meant to keep the present in place, or bring back the past, invariably result in jobs of the worst kind.  Trump and Payne would know this if they’d grown up in countries bereft of open markets such that they would presently be doing work unrelated to their skills and interests. Instead, they live in the U.S. where open trade frees more and more people to do what they do best. Payne gets to be a commentator, while Trump’s work before his political detour luckily involved his lifelong passion: property. 

The problem is that where government controls things, work that reflects individual passions is a luxury enjoyed by the very few.  Which brings us to the next dirty little secret: it’s in countries and cities in which governments “protect” jobs that opportunity is most slight, and backsliding is most evident.  That’s the case because factory and job loss has never in the history of mankind wrecked a city or country.  The latter should be obvious to Trump and Payne.  New Yorkers both, they may know that one hundred years ago, New York City was the U.S.’s #1 manufacturing city.  That it isn’t 100 years later explains its immense prosperity, and also why Payne and Trump chose it to seek their fortune over Aliquippa. 

Aliquippa stagnates today, as does Detroit, precisely because both clung to the factory of the jobs of the past that are talent repellents.  Yes, neither Trump nor Payne chose either city.  Well, of course they didn’t.  Manufacturing cities have for decades repelled the very human capital that drives prosperity in any city, state or country.  Getting right to the point, manufacturing locales drive away talented people like Trump and Payne. So when the president and Fox commentator defend the indefensible, they reveal just how elitist, and Pelosi-like, they actually are.  Neither would be caught dead working in a factory, and that’s the point.  Clueless to how the existence of the work of the past speaks to decline, they ignorantly promote it.  At least Trump does.  In Payne’s case, he panders while fully aware that the most vacant cities and states of all are those living in, or trying to bring back, the past. 

Back to Poland, arguably the biggest reason Trump would benefit from a walk through its streets is that it would make him aware that work is always and everywhere an expression of one’s desire to import.  That it is exposes as empty the excuse regularly trotted out by modern vandalizers of economics: we’re free traders as long as the rest of world is open to American goods.  What a load of nonsense. Poland instructs in this regard.

Indeed, as a tour of it loudly reveals, McDonald’s, McCafe’s, and Kentucky Fried Chicken restaurants are everywhere.  American companies like MetLife and Deloitte are headline tenants in the city’s skyscrapers. Radio stations play American music all day, and every day. Poles endlessly tap on Apple iPhones.  Well, of course they do.  Americans are thirsty importers precisely because their goods and services are lustily desired by the rest of the world.  In that case, we don’t need to concern ourselves with what other countries do in terms of trade.  We don’t because as history reveals rather clearly, their prosperity invariably occurs in concert with voracious consumption of everything American. Our goods and services taste and feel like freedom. 

Except that the U.S. has a president right now who wants to sap the freedom that has made us the envy of the world, and that has rendered American-made and conceived the aspiration of those who for too long lived in countries in which clueless leaders blocked the inflow of plenty.  In short, Trump is following the failed playbook that has reduced all-too-many to working at what they shouldn’t, and in weather that is cruel.  Such is the result of the backward-looking protectionism practiced by loser countries, and that a President who pays lip service to winning wants to foist on the winningnest country in the world. 

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 (www.trtadvisors.com). His new book is titled They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers. Other books by Tamny include The End of Work, about the exciting growth of jobs more and more of us love, Who Needs the Fed? and Popular Economics. He can be reached at jtamny@realclearmarkets.com.  

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