Tuesday, January 26, 2016

The Best Way To Win Trade Deals With China

A major complaint in Trump's speeches is the massive $505 billion dollar trade deficit with China, and large deficits with other countries.  "We lose jobs," he says, "and they get cash."  Trump blames these deficits on incompetent negotiators.  Trump would use such shrewd businessmen as Carl Icahn to get better deals.

Why do U.S. firms manufacture overseas?  One reason is lower cost of production.  What can be done to encourage manufacturers to shift or keep their production in the U.S.?

First, reform the tax code.  Lower tax rates on all forms of business and individuals, eliminate taxation of dividends and capital gains and end worldwide taxation of income.

Second, eliminate unnecessary regulations that hamper investment and increase production costs in the U.S.

Third, continue to emphasize domestic energy production to maintain low prices that are an important input into U.S. manufacturing.

Fourth, reform medical insurance/health care to promote greater reliance on market forces.

These and other measures would dramatically improve the global competitiveness of American enterprises.

As to China, insist that it honors WTO and other bilateral and multilateral trade agreements.  If China violates these agreements to the detriment of American firms and individuals, then appropriate measures should be taken against China to level the playing field.  But removing the impediments to more efficient production in the U.S. would be the best way to start.  Getting a better deal with China without undertaking domestic economic reforms could turn out to be a pyrrhic victory.

More On National Review's "Against Trump"

Your friendly proprietor has watched about a dozen YouTube videocasts of Donald Trump rallies in Iowa, New Hampshire, Florida, South Carolina, North Carolina, Texas, Alabama, Oklahoma, and other states.

So far, I have not seen even one person of the quarter million-plus attendees of these events give Trump a Sieg Heil (Hail Victory) Nazi-type salute, or a Mussolini-type salute.  Not one.  Not a single time.  I have not seen a single march of black or brown-clad pro-Trump storm troopers marching to these rallies, beating up residents, breaking shop windows or burning books.

Perhaps some of the 22 National Review contributors should step outside their narrow environs from time to time and take a look around. They might see that Trump supporters are intelligent and have common sense.  But if Trump becomes the next president, the members of the old political industry will need to find a new line of work.  This should be easy since there are 29 federally-funded job training programs they can attend.

Sunday, January 24, 2016

National Review Gone Wild Against Trump

“A spectre is haunting America—the spectre of Trump.”

The January 21, 2016, edition of National Review declared war against Donald Trump.  Editor Rich Lowry assembled a cast of 22 thinkers, who share a “vision of the self-anointed conservatives,” to inform America’s conservatives that Trump is not one of them.

Among the 22, one wrote that Donald Trump is “another glib egomaniac” that could succeed the current “glib egomaniac in the White House.”

It was only a matter of time until Godwin’s Law emerged in the blistering attacks against Trump.  The same intellectual warned that Trump supporters were akin to the “German crowds that were delirious at the sight of him [Hitler]…and “the ecstatic crowds that greeted Barack Obama when he burst upon the political scene in 2008.”

Trump’s followers are engaged in “emotional venting” similar to those who elected such “crowd pleasers” as “Peron, Hitler and Obama.”  “A shoot-from-the-hip, bombastic showoff is the last thing we need or can afford.”

So much for Democracy in America! As of this writing (January 24, 2016), Trump leads only in the polls.  But if Trump becomes the Republican nominee, the “venting crowds,” as this scholar call them, do not realize the potentially disastrous consequences of their support for Trump.

The “Gang of 22” might want to take a moment from their busy schedules to tour Trump Enterprises--hotels, resorts, international reality, entertainment and television, publications and merchandize—a multi-billion dollar business empire.  He has hired tens of thousands of individuals, providing them with opportunities to climb the ladder of success

As previously posted, Trump threatens the “political industry”—the pundits, handlers, ad makers, consultants and pollsters who make a comfortable living from private donors and taxpayers that fund elections.  As Frank Sinatra would sing, “He did it my [his] way.”

Trumps’ M.O. threatens to put the pundits out to pasture.  Trump is a political disruptor in the manner of Uber, Airbnb, and other sharing technologies that undermine established business practices

How many of the Gang of 22 supported George W. Bush, whose legacy is a Middle East disaster, a Great Recession, a string of Clinton surpluses transformed into deficits and, perhaps worse, the election of Barak Obama?  How many of the 22 endorsed John McCain and Mitt Romney?  How many supported the leading members of the Republican establishment before Trump arrived on the scene?  Just asking….

Is Chris Christie’s arm-in-arm walk with Barack Obama along Sandy Point a symbol of the wise, dedicated, and courageous president America needs at this time; Or Rubio, who joined ultra-liberal Senator Chuck Schumer to push amnesty for millions of immigrants who entered the country illegally; Or Kasich, who can’t wait to transfer Ohio’s generous Medicaid program to Washington; Or Huckabee, Santorum, Paul, Fiorina and Cruz?  All of these have their good and bad points, but are they likely to defeat the Democrat nominee and create a conservative, safe America that their Republican predecessors have failed to bring about?

Your friendly proprietor is willing to take a chance on Trump.  Trump is more likely to appoint successful individuals to his White House staff and cabinet positions than political retreads.  No one can predict the ebb and flow of political events.  But Trump has proven himself in the rough and tumble world of competitive business.  That is a better resume than most Republicans can produce.

Friday, January 15, 2016

A Musical Interlude

From the day he announced his candidacy for the Republican nomination for president, Donald Trump has been on the receiving end of a blistering attack from the political industry:  Democrats and Republicans alike, the mainstream media, lobbyists, interest groups, you name it!

Why are they so against him?  Because he is exposing the corruption of the political establishment.

Unlike so many Republicans, he does not court the political industry (we will see if he stays true to that conviction if he is elected).  He is, as he says, a counter-puncher.

These past months take me back to 1968 and a top-of-the-charts single that says in three minutes perhaps more than 10,000 words.  Enjoy!

Friday, January 1, 2016

Presidential Candidates Looking For A Few Good Economic Policy Ideas And Advisers

The annual meeting of the American Economics Association takes place in San Francisco during January 3-5, 2016.  Its timing is fortuitous as it precedes the next Republican presidential primary debate on January 14, 2016.

Add in dozens of receptions, hours spent at meals, or more likely in the bars, the total number of hours discussing and debating economic issues and ideas will be in the neighborhood of 1,500 or more (60 24-hour days, or 120 12-hour days, or 180 8-hour days).  Obviously no presidential candidate can spend anywhere near that amount of time discussing economic policy options.

Candidates would each have to send 50 staffers to listen to and distill the content of each panel to determine if there were any good ideas that could be productively incorporated into their campaigns and if any of the participants might serve as official advisers.

At this stage in the campaigns, seven Republicans remain top tier candidates--Trump, Cruz, Rubio, Carson, Christie, Bush, and Kasich--based on the Fox Business News Network criteria for participating in the prime time portion of the January 14, 2016, debate in North Charleston, South Carolina.  Only two Democrats--Clinton and Sanders--have any prospect of winning a Democrat caucus or primary.

So, could some enterprising blogger, journalist, or AEA participant help out by identifying and summarizing any of the new research findings that would constitute a valuable addition to the national debate on economic policy.