Many of my libertarian and conservative allies have attacked Donald Trump viciously. Some comment on his hair style, others comment on the self-promotion aspect of his speaking style. One young libertarian friend, whom I think quite highly of, I might add, said on Facebook, while listening to Trump’s recent speech at FreedomFest in Las Vegas, “My IQ is decreasing with every word.”
I won’t comment about hair, but I will comment briefly about his speaking style. I have seen a lot of people speak, and I pay attention to their style, figuring I can always learn something that will help me with my speeches. And, frankly, I think he’s a better speaker than many libertarian speakers, not, I hasten to add, in content, but in style. His frequent interruptions of a half-spelled-out thought to jump to another half-spelled-out thought are often rhetorically effective–and charming.
My view is that we should not talk at all about hair styles, talk a little about speaking styles, and, mainly, treat the man respectfully enough to deal with his arguments. I watched his whole 50-minute Las Vegas speech and Q&A. This will not be comprehensive, but I do want to hit some important points.
9:38: Trump: “The biggest boats I’ve ever seen, I just left Los Angeles, thousands of cars, millions of cars coming in [from Japan.] We get nothing. We get cars. They get . . . We want to send rice, we want to send corn. . . . The imbalance of these things. They send a car. We send corn.” [He says “corn” derisively.]
DRH: Yes, and? What’s wrong with trading corn for cars? He says later that they won’t even take our product. So which is it? We do send corn or we don’t send corn? This is about comparative advantage.
10:25: Trump: Talks about a manufacturer friend who, when he exports to China, pays a surtax (tariff) of 42% and then says “We [the U.S. government] don’t charge surtax.”
DRH: Actually, the U.S. government does charge tariffs. They tend to be lower than Chinese tariffs, but they are sometimes stiff. The tariff on light truck imports, for example, is 25%. And just as their tariffs hurt U.S. producers and Chinese consumers, U.S. tariffs hurt foreign producers and U.S. consumers.
Also, here’s what Simon Lester and K. William Watson wrote 2 years ago:
This decision [by the U.S. Commerce Department] found both subsidization and dumping in relation to Chinese imports [of wind towers] and imposed an antidumping tariff of between 44.99% and 70.63%, as well as countervailing duties of 21.86%-34.81%. The Commerce Department also established a separate antidumping duty of 51.40%-58.49% on Vietnamese wind tower manufacturers.
28:28: Trump: The only advantage I have [vis-a-vis the mainstream media]: millions of followers on Twitter and Facebook. It’s like owning the New York Times without the losses.
DRH: That is a great line. My tip to speakers and thinkers: learn from people who use great lines.
29:36: Trump: “You call up about your American Express card. Someone’s on the phone with a little bit of an accent. Where are you from? Oh, this is New Delhi. That’s wonderful. That’s wonderful. [said sarcastically] Why can’t it be from . . . Arizona? From New York? From Las Vegas, Nevada? Why can’t it be in this country? You would think it’s impossible. How can it be from that far away and they save money? How could it be, right? They’re from India.
DRH: The answer is that it could be done here, but it would be much more expensive. And so if the people on the phone were in the United States, they wouldn’t be doing the work they’re doing. The prices paid to people in India are well below the prices that would be paid to U.S. workers, which is why U.S. workers wouldn’t find it attractive to work in those jobs and, instead, work in jobs where they produce more value. So the overall value of output is higher because the U.S. firms are finding people elsewhere who can do it for less and U.S. workers are finding jobs for more. Of course, what can mess this up is the minimum wage, but even if the minimum wage law were abolished, the chance that U.S. firms would be able to find workers competitive with Indian workers for those jobs is very low.
41:46: Trump: “I believe strongly in a very powerful military. Because if you have a really powerful military, you’ll never have to use it. Nobody’s going to mess with us.”
DRH: He misunderstands incentives. It’s not the issue of whether anyone messes with “us.” It’s that having a powerful military gives Congress, the President, and the Secretary of State a huge temptation: to use it. He needs to pay attention to what Bill Clinton’s former Secretary of State Madeleine Albright said to Chairman of the Joint Chiefs of Staff Colin Powell. Albright said, “What’s the point of you saving this superb military for [sic], Colin, if we can’t use it?” (See Madeleine Albright, Madam Secretary: A Memoir, Miramax Books, 2003, p. 182.) And so she and Clinton did use it–to go to war in the Balkans.
47:55: Trump (talking about Hillary Clinton): “She’s not going to able to bring back trade.”
DRH: So much of his talk was against trade. It’s hard to know what he means. My guess is that with his next line “She’s not going to be able to bring back jobs,” that he means he wants more exports. But he did seem to be objecting to imports. Fewer imports, all other things equal, means less trade, not more.
READER COMMENTS
ColoComment
Jul 16 2015 at 6:56pm
I knew I had seen this recently. Maybe we should send it to The Donald for homework.
https://www.aei.org/publication/economics-at-its-best-the-story-of-the-iowa-car-crop/
David Boaz
Jul 16 2015 at 7:04pm
Or as Mises put it — as quoted in The Libertarian Mind 🙂 —
“The inhabitants of [Switzerland] prefer to manufacture watches instead of growing wheat. Watchmaking is for them the cheapest way to acquire wheat. On the other hand the growing of wheat is the cheapest way for the Canadian farmer to acquire watches.”
Andrew_FL
Jul 16 2015 at 8:09pm
Donald Trump appears to be the Republican candidate for the Low Information Voter.
Anon
Jul 16 2015 at 9:29pm
This was wonderful. If the point-by-point takedown of populist candidate speeches became a regular thing, I would be ecstatic. There’s so much bad economics on both the populist left and populist right that it’s terrifying (though not too surprising) that these candidates have any support whatsoever.
ColoComment
Jul 16 2015 at 10:31pm
Andrew_FL, I just think people of a conservative bent are enjoying the freshness of Trump’s in-your-face style of speaking on topics where other candidates tread oh-so-lightly amongst the political poll minefields. Where to give offense, even unknowingly, is to hold hands with political death. Will he survive to be nominated? No. But he does serve a larger purpose.
I think of Trump as if he were a court jester, who you might recall was the only member at court permitted to speak truth to the king without penalty. Somewhere in between the “harlequin” hairdo and the billions of assets, Trump finds the freedom to say things that force the Dems (& many Repubs) back on the defensive. He is not cowed by threats to his business, nor does he run from confrontation. And I confess, I for one find that fearlessness rather admirable (as well as entertaining.)
Massimo
Jul 17 2015 at 1:50am
Donald Trump is awesome. I love him, he’s wildly entertaining and energizing. But all the cited points are ridiculous. DRH has the calm, boring, but accurate interpretation. Trading corn for trucks is fine.
One point where Trump and Ann Coulter and most eloquently Ilana Mercer actually outsmart Henderson and Caplan is immigration. A country should recruit citizens like a sports team, employer, or university recruits: selectively.
One point of absurd hypocrisy is when the pro immigration types cite stats on how low immigrant crime is. Simultaneously, the top POTUS issue is how blacks and hispanics are far over represented in crime. You can’t have it both ways. Either black and hispanic populations are safe and low crime or they are risky and high crime.
James Hanley
Jul 17 2015 at 8:30am
Massimo, your comment suggests that America’s black population consists mostly of immigrants. I’m sure you understand that’s not so and didn’t mean to imply that.
As to Latinos, there’s no “having it both ways” if immigrant Latinos are less likely to commit crime than native born Latinos. A quick search turned up some evidence that this is the case. http://www.pewresearch.org/fact-tank/2013/10/15/crime-rises-among-second-generation-immigrants-as-they-assimilate/
David Henderson, just one quibble. You must be charmed by different things than I am.
Seth
Jul 17 2015 at 10:11am
It’s evident that Trump is a DIY economist. It would be a wise investment for him to hire a good economist. David Henderson for the job?
ThomasH
Jul 17 2015 at 10:30am
Instead of just pointing where he is wrong, it would be better to suggest what the alternative should be. If the alternative is do nothing, fine, but say so.
Of course this appraoach would be more productively applied to Sen. Clinton.
Massimo
Jul 17 2015 at 11:47am
@James Hanley, If a demographic group has a very high crime rate, then importing people of that demographic group should statistically increase crime.
This is wildly obvious and intuitive. You and the pro immigration types are playing tricks and games with stats.
One of the common stats tricks this crowd plays is that after at most a single generation cycle, when imported demographics are officially reclassified from immigrant to citizen, then the crime of that demographic is no longer relevant to the immigration discussion.
Caplan, Henderson, and much of this crowd understand this. They know they are playing these kind of cute games and distortions. They just sacrifice any form of intellectual integrity to advance their argument and their interests.
As I said, all of Trump’s listed points are ridiculous, particularly on trade and foreign competition, and DMH is right. However, overall, Trump is more honest than Caplan and DMH.
Massimo
Jul 17 2015 at 12:43pm
@James Hanley,
You are citing native born latinos as high crime. And native born latinos are the automatic result of immigrant latinos, therefore you are claiming that latino immigration is a crime problem?
David R. Henderson
Jul 17 2015 at 2:32pm
@Anon,
This was wonderful. If the point-by-point takedown of populist candidate speeches became a regular thing, I would be ecstatic. There’s so much bad economics on both the populist left and populist right that it’s terrifying (though not too surprising) that these candidates have any support whatsoever.
Thank you. When I get the time, I will probably do more of this with the other candidates too.
@Massimo,
But all the cited points are ridiculous. DRH has the calm, boring, but accurate interpretation. Trading corn for trucks is fine.
Thank you. My tone was boring on purpose. The heat about Trump–either pro or con–needs to be reduced.
Brad
Jul 17 2015 at 2:39pm
“…because the U.S. firms are finding people elsewhere who can do it for less and U.S. workers are finding jobs for more.”
The US labor force participate rate is nearing a 40 year low and millions remain both under-employed and unable to find work. So, U.S. workers are not really finding jobs for more.
Anon
Jul 17 2015 at 4:39pm
@Brad
If you look at the labor force employment rate for age 25-54 (thus stripping out the effects of demographic and higher education shifts) the chart looks a lot less scary
LD Bottorff
Jul 18 2015 at 2:03pm
What worries me about Donal Trump is that he might be effective enough to actually implement some of his crazy ideas. I don’t think Trump blaming the Mexicans and Chinese for our problems is any different from Sanders blaming the 1%.
Adrasteia
Jul 19 2015 at 6:26pm
Treat him respectfully? The man who just dismissed John McCain’s torture as a prisoner of war by saying he got “caught?” Sir, respect is earned.
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