Trump ignores the opportunity costs of his foreign trade policy

In today’s column, Thomas Sowell proposes that one reason Trump is leading the Republican polls is his:

…ability and the willingness to articulate his positions clearly, forcefully and in plain English. Too many Republicans talk like the actor of whom a critic once said, “he played the king like he was afraid that someone else was going to play the ace.”

Sowell has a good point, but I think there are other characteristics that make Trump appealing to folks.

One, he isn’t a politician, yet.  Two, he is market tested.  His TV show attracts viewers. Three, he is a successful businessman, which appeals to folks who want jobs.

But, folks need to get over their crush on Trump.  His foreign trade policies stink and his views on government are no better than any other politician.

First, foreign policy.  With his protectionist approach, he wants to restrain imports to create jobs.

He doesn’t understand that is like me deciding not to buy food from grocery stores (imports to my home) so I can create the job of growing my own food.  While it’s true that restraining grocery imports to my home will create work for me, most people will deduce that I am not better off with my protectionist policy.

Instead of working an hour each day to buy those grocery imports (and an overabundance of calories), I will now need to work 10 to 12 hours plus weekends to produce just enough calories to sustain myself.

Which means I also need to give up whatever it was I was doing before to earn the wealth I used to buy the imports.  What I gave up to produce my own food is my opportunity cost.  It’s a steep cost that nearly everyone would advise me not to incur, wouldn’t you agree?

Yet it’s that very same opportunity cost that Trump, and all the folks who like what he says, ignores.  While he points out the work that is created, he misses the opportunity cost of creating that work by restraining imports.

My example is not much different when you expand it from the boundaries of my property to the boundaries of our country.

The big difference is that whomever is made busy with protectionist policies are easy to find and make great emotional anecdotes in Trump’s stump speeches, while the enormous opportunity costs (like going from one hour a day to earn an abundance of calories to 10-12 hours + weekends to produce a sustenance level of calories) are spread across millions and cannot easily be imagined or pointed out in a stump speech.

The other problem I have with Trump is that, like most politicians, he seems weak on the Constitution and the role of government.   I think he suffers from the same affliction as Obama.  He believes the President’s role is to run the country rather than defend liberty.  Unfortunately, many of the voters in the country have that affliction as well and vote accordingly.

Boudreaux Addresses Trump

On November 4, I sent the following e-mail to Don Boudreaux of Cafe Hayek and George Mason University requesting he address Donald Trump’s bad economics.

Hi Don,

I just returned to my hotel room, flipped on FoxNews and saw Donald Trump on Greta Van Susteren’s show talking foreign trade.  I think he covered just about every foreign trade myth in a short span.  “We don’t make anything here anymore, just health care.”  “They shut down a plant in Iowa and moved the jobs Mexico.  We need those jobs.”  “Put a tax on Chinese imports.” He also seemed a little fuzzy about government’s role in creating jobs, which is strange coming from a guy who manages to create lot of jobs without the government.

Here’s a link to the video:

It’d be nice to see a Boudreaux letter setting Trump straight.

The link no longer points to the Trump video.

While I didn’t get a response from Boudreaux, it was nice to see him address at least one of Trump’s foreign trade myths as he did in this letter in response to a Newsmax story.

After retrieving this e-mail from my sent messages folder, I was pleasantly surprised to see that it was coherent, considering I was in Vegas and blitzed at the time that I wrote it.

Here’s some feedback for Greta.  When you have folks like Trump or Buffett on who talk economics, don’t assume they know what they’re talking about just because they are successful business people.  Get a second opinion.

Advice for any news reporter who encounters a guest discussing foreign trade including Greta:

Do your viewers a service and call Don Boudreaux of George Mason University to get his view on their comments.  Boudreaux can point trade out myths and articulate why, though many sound good on the surface, they can be damaging.

Advice to Donald Trump:

Have lunch with Don Boudreaux.  He will help you understand why your trade myths are myths and help you find ways to articulate the truth in politically palatable manners.  And please do so before more people mistake your business success as a valid merit of your knowledge on foreign trade and you end up hurting more of the very people you may think you are trying to help.