Tag: trade

Categories
folly free trade & free markets meme moral hazard national politics & policies

Trump’s Dangerous Idea

Donald Trump, trade, protectionism, Donald Trump, war, borders, Bastiat

A lot of people were impressed by the reasonableness of Donald Trump’s foreign policy speech yesterday … despite the usual hyperbolic promises of “best” and “great” and “beautifully.”

Its general tenor? Refreshing. Rejecting post-​Cold War foreign policy for a return to “national interest” and “America first”? Long overdue. Like Trump, I think we should eschew nation building.

But still there is that one big problem: Trump is a mercantilist. He believes in protectionism. He thinks that trade has to be “fair” in order to benefit both participants. He thinks NAFTA and similar trade agreements (which generally promoted trade while still reserving a lot of room for government futzing about) are what hurt American industry. Trump is always blaming the “bad deals” made with Mexico and China, rather than placing the blame where it squarely belongs, on

  • America’s world-​high corporate income tax, and
  • chaos of regulatory excess, and
  • impenetrable tax code.

But protectionism makes sense to a lot of people. They are incredulous when they hear the (well-​established) idea that free trade — even unilateral free trade — is a benefit to the people who live under it.

Surely, they snort, when you target aid or protection to some industries, you are doing good, right?

Wrong. Oh, yeah, of course protectionism protects the chosen few, the advantaged. That’s what it obviously does. But it doesn’t protect the general interest – consumers pay more and producers allocate resources to less valued uses.

You have to look beyond the obvious (“the seen”) to get the full picture (“the unseen”).

Trump’s at his most dangerous right here — forget his loose talk — by continuing to pretend that protectionism helps America.

We cannot afford another Smoot-​Hawley.

This is Common Sense. I’m Paul Jacob.

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Donald Trump, trade, protectionism, Donald Trump, war, borders, Bastiat

 

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Categories
initiative, referendum, and recall

Trading One Right for Another

Trades are not unheard of in politics, but somehow they rarely exhibit the up-​front honesty and clarity of the trades that make up the bulk of our economic life. When I go to the super-​market, or the record store, or Wal-​Mart, I pretty much know what I’m getting and what I’m giving up.

Not so clear, though, in politics.

Take Arizona’s “Hunting and Fishing Amendment,” Proposition 109 on this November’s ballot. Much has been made of the first element of the ballot’s title, establishing a “constitutional right” to hunt and fish. Outdoorsmen love it.

But a second element gives to the state legislature “Exclusive authority” to regulate hunting and fishing, which may grant regulatory power to various wildlife commissions.

It basically disallows Arizona’s citizens from future influence through the initiative and referendum. That’s what citizens trade away for the first part. Citizens get a “right” to hunt and fish “lawfully,” a right they already have, but give up their current rights to influence what that “lawfully” means, via the ballot.

Prop 109 also declares that hunting and fishing would be the preferred means of controlling wildlife, and it says that “no law shall be enacted” that “unreasonably restricts” hunting and fishing, etc. 

Of course, constitutions can say “no law” all they want. History shows legislatures don’t abide by that prohibition. Neither do courts.

Just read the First Amendment to the U.S. Constitution, and consider … and cringe.

This is Common Sense. I’m Paul Jacob.