So why does Trump favor these pro-growth domestic policies? Sadly, it is not because of systematic arguments about the efficiency of competitive markets. Rather, as a worldly businessman with an open disdain for academic musings, his response is purely visceral. Domestic regulators used to come after his real estate and casino ventures, so they remain villains even after he is ensconced in the White House. But foreign competitors could always disrupt his cozy domestic arrangements, so they too have to be stopped. Find out what bothered Trump in his private life, and one grasps the seeds of his disjointed public policy. And there is no relief when he chooses poor advisors such as Wilbur Ross as Secretary of Commerce and Peter Navarro as Director of Trade and Industrial Policy.
And thus to the bad news. Trump’s musings foolishly focus on international trade deficits, and then dress up his prejudices in bellicose terms that reveal his willful and persistent economic ignorance. His number one obsession is with the United States’ net deficit in foreign trade. His crusade amounts to bringing back mercantilism with a vengeance. His agenda for trade with China centers on the misguided goal of making the Chinese buy greater volumes of American goods. But by this maneuver he throws his weight behind a sideshow. The real agenda should always be to reduce barriers to trade by lowering tariffs in both directions, trade deficits be damned.
Since Uncle Sam has a lot of regulations in place to make the operations of domestic oil and gas companies more costly, why is the biggest beneficiary of loans from the federal government export credit agency (the U.S. Export-Import Bank) the gigantic Mexico state-owned oil and gas company Pemex? Between 2007 and 2013 (the most complete data set we have), Pemex received over $7 billion in loans backed by American taxpayers to buy U.S. goods. Thanks to Uncle Sam, this discounted borrowing power gives Pemex a leg up on its competition with domestic oil and gas companies.
Bob Higgs has a few questions for Americans who complain about immigrants “stealing” American jobs.
Brittany Hunter applauds the Janus decision.
Warren Meyer reveals how labor regulations harm unskilled workers.
Even more startling is the near equality among the bottom three quintiles. The bottom quintile, which earned only 2.2% of all earned income, had virtually the same share of spendable income as the second quintile, lower-middle-income Americans. This equality is despite the fact that lower-middle-income workers earned more than three times the share of income and worked 21/2 times as much, measured by comparing each group’s number of full-time workers relative to its working-age population. Middle-income workers earned almost six times the share of income and worked almost four times as much compared with the bottom quintile, but they enjoyed only about 20% more spendable income.
And even these numbers understate the huge difference in work effort. Compared with the bottom quintile, the lower-middle-income quintile had almost four times as many working-age families whose members worked two or more jobs, and the middle-income quintile had more than seven times as many families with members working two or more jobs.
