I love my sister, Kellie, but, gosh, she is pretty confused about politics and economics. She’s a Trump fan, so probably gets most of her “facts” from Fox News, Rush Limbaugh, and the President’s tweets.
I’m sure the Prez is happy that she is so confused.
Kellie recently lectured me about the wonderful things President Trump has done to reinvigorate the American economy. She’s particularly proud of the fact that he’s “standing up to those Chinese” who have, supposedly, ruined our economy by “stealing jobs”, etc.
Although she is a staunch Conservative, Christian, Republican M.A.G.A. soldier, she doesn’t seem to understand the concept of free-enterprise, something that “conservatives” have always held dear. (Or, worse, Heaven forbid, she doesn’t really believe in it? Or, maybe, Conservatives don’t anymore?)
Free enterprise is an economic system in which private industry operates in competition and largely free of governmental control.
Trumpism intends to, and has striven to, eliminate governmental control, thereby allowing businesses to operate unfettered. Regulatory agencies of the Federal government have been gutted under the Trump Administration, environmental protections have been reduced, and new Trump-appointed Conservative jurists have re-interpreted laws to allow business more leeway. Business is booming…or so it seemed before the recent economic crash.
There were, of course, reasons for all the regulations and red-tape throttling down the gluttonous appetites of American businessmen: those laws weren’t put in place, at once, by any Administration, or any political Party, by accident. Wisdom put those constraints in place.
For some reason, let’s call it greed, some businessmen find it necessary and justified to cut corners on employee safety, environmental protection, and fairness in order to shave costs. In addition, they find ways to stifle competition, bribe officials, and screw vendors out of payment. Sometimes, they take advantage of situations to gouge consumers, like the guy who recently bought up 17,000 units of Purell and began selling them online at preposterous prices.
All these things in the name of increasing the bottom line…which is the ultimate measure of free-enterprise: profit.
As Gordon Gecko said in the motion picture, Wall Street, “Greed is good”. In other words, profit is good, but more profit is better, and the guy with the most expensive toys is the winner. Greed knows no shame.
Donald Trump is a believer in this, and a well-known practitioner of business dirty tricks, and that is why he does the things he does to reduce the regulatory drag on the economy. He’s a businessman, by the way, in his spare time.
My sister, good Christian that she is, apparently doesn’t mind folks bending the rules…or eliminating them altogether… in the name of profit: all she cares about is a Dow Jones Average that keeps climbing so that her retirement account stays plump. I hope she’s happy counting all of her money.
Be that as it may, the other part of the free-enterprise concept has to do with competition.
Much like the Theory of Evolution idea of “the survival of the fittest”, competition winnows out the weak businesses from the strong. Businesses with a revolutionary new product (“a better mousetrap”) will eliminate those with outdated technology, and businesses with lower costs will out-compete businesses with similar products whose costs are higher.
It’s not rocket science.
Donald Trump understands this, and that’s why his signature Trump ties (which he sells) and his daughter Ivanka’s apparel products are made outside the United States…because labor costs are lower there. And, that’s why most of the consumer goods purchased in America are made overseas.
From a business perspective, Donald Trump is, absolutely, down with lowering cost. But, publicly, he is against such competition with every fiber of his political being: he says that he’d rather have those products made here, because it would mean more jobs for Americans.
I think we’d all agree to that.
And, so, as President, he’s been engaged in a futile “war” against the Chinese, in particular (but, in fairness, he’s also targeted Mexico, Canada, Europe…basically any country that supplies things that our citizens buy) to somehow reverse the way that free-enterprise works.
In other words, change competition itself.
He’s spent a lot of energy, publicly, attempting to re-write trade agreements with other nations. He thinks America is getting screwed…because other nations don’t buy as much stuff as we do. Of course, we are the richest nation in the world, and buy more things than other countries do, and we are primarily a service-based economy now, so we don’t sell that many hard goods. So, by any yardstick, we are going to have a hard goods trade deficit (i.e. buy more things from Country A than Country A buys from us) with virtually any country in the world.
We don’t make a lot of those consumer products here anymore because, primarily, our labor costs are much higher than in other countries. Basically, we’re not competitive.
Trump’s answer to this dilemma has been to enact tariffs on foreign goods. A tariff is a tax on imports; it makes the imported item more expensive to consumers. Trump says, “We’re putting it to those bastards! Look at all the tariff money we’re hauling in!”
The problem is that the tariff tax is being paid by American consumers. By the way, they didn’t approve such taxes, which normally is a political “no-no” if you’re a true Conservative.
(Do Trumpers remember “No taxation without representation”? That was the big hue and cry of “Tea Party” Republicans just a few years ago. Question: Where did those guys go?)
And, free-enterprise folks are, inherently, opposed to taxes because they want the government to stay out of their way.
I guess the hope is that American entrepreneurs will quickly build manufacturing plants here in the United States to produce those foreign-made goods that are being taxed. Wouldn’t that be great!
Unfortunately, many of the largest corporations that Trump seeks to impact are global (not based in the U.S.): their focus is on profit, not American patriotism. And, as long as they can sell their products for a nice profit, they don’t particularly care who the consumer is.
And, so, there is little evidence of major industries re-locating to the United States.
To make matters worse, the Chinese (and Mexicans, Canadians, Europeans, and other countries) have other markets where they can sell their products. So, the impact of Trump’s heavy-handed tariff impositions has fallen on American constituents in the form of inflation: our consumer goods cost more.
My sister Kellie doesn’t seem to appreciate this fact; she wants to continue to believe the fairy tale that our President has the Chinese Premier bent over a log and is putting it to him.
“Keep America Great”!