This morning, I received the following Facebook private message from a friend:
You are a much more intelligent guy than me. Can you explain the tariff argument along with the trade deficit? I am kind of the opinion that i have a 100 percent trade deficit with every business i purchase from. I buy from them because me wants and tgey won't buy from me because they don't. I feel like we will just be footing the bill. I will biy good fairly priced american goods as i find them...but other than that i need good fairly priced items from wherever. This is an honest ask for your thoughts as I don't know about the macro picture over my micro view.I responded thusly:
You are exactly right! Don't short-sell your economic understanding! The micro view has to be at the core of all economic consideration. Trade deficits and surpluses between countries are largely irrelevant. transactions occur between organizations and people.
I boil my economic views down to this: A good or service is worth what buyer and seller agree that it is worth. Period. No outside party has any business being part of that agreement - certainly not government.Shortly afterward, I came across today's Townhall column by Walter Williams, which I was excited to share with my friend. It's about the folly of tariffs and the whole thing is a worthwhile read, but I'll share here the money paragraph:
There's a lot of nonsense talk about international trade, which some define as one country's trading with another. When an American purchases a Mercedes, it does not represent the U.S. Congress' trading with the German Bundestag. It represents an American citizen's engaging in peaceable, voluntary exchange, through intermediaries, with a German auto producer. When voluntary exchange occurs, it means that both parties are better off in their own estimation -- not Trump's estimation or General Motors' estimation. I'd like to hear the moral case for third-party interference with such an exchange.I think it is important to view Trump's protectionism in a somewhat larger context. As you know, he's currently in Europe for three distinct meetings: a NATO summit, and get-togethers with Theresa May and Vladimir Putin.
He kicked things off - or maybe kicked them in the shins - at the NATO breakfast this morning in his signature wild way:
T. LaDuke at Red State, from whom I'm excerpting, concludes on a more hopeful note than I would have:
Sorry, T., LITD is long past the point of granting the possibility that the Very Stable Genius knows what he is doing.
Now, it's true that the gas and oil deal is counterproductive when one considers how Putin has used its role as a supplier of those resources to bring Europe to heel in the past, but was this breakfast the way to make that point, and was his rhetoric the way to express it?
Which gets us to the even larger point Jonah Goldberg makes in his Townhall piece today. His theme is the seeming emergence of a Trump Doctrine. Said doctrine is unlike any of its predecessors in US foreign policy history. It's a pure reflection of its namesake's self-regard.
The Trump Doctrine is taking form in a series of tweets, glandular outbursts at press conferences and a series of seemingly inchoate policy rollouts.
Last month, The Atlantic's Jeffrey Goldberg (no relation), asked a number of Trump aides what the tagline of the Trump Doctrine might be. The winning entry: "We're America, bitch." I don't think that's quite it.
Another contender, offered by a senior national security official: "Permanent destabilization creates American advantage." That's closer.
President Trump and his biggest supporters see the president as the Great Disruptor. The "globalist" world order -- on trade, military alliances, sanction regimes, etc. -- has not served America's interests, and Trump is like Samson pulling down the pillars that hold up the Temple of Dagon, the shrine of the Philistines. Though, in their telling, he will escape the debris.
Trump, whose id often controls his understanding of policy, seems to think our allies are like members of his entourage picking his pocket. NATO, he says, is "worse than NAFTA," and the European Union was created "to take advantage of the United States." (It wasn't.)
Meanwhile, even as Trump treats allied leaders such as Canada's Justin Trudeau and Germany's Angela Merkel like punching bags, he has gone to great lengths to praise and defend authoritarians in Russia, Turkey, China, the Philippines and elsewhere. At least such leaders are "strong," he often says. Trump genuflects at the sovereign inviolability of national borders, but even that goes out the window when it comes to Crimea's borders. Because Putin is "strong."
The Trump Doctrine, in short, is simply the international relations analogue to the domestic version of Trumpism. The Big Man personifies the national will, and constraints on the national will are for suckers. Self-interest, personally defined, is inherently in conflict with collective interest. It's Make America Great Again on a global scale. One problem: The world was not that great when everybody followed this doctrine.
Since his pre-politics career was defined by an insistence on not being dissed, the new outfit he heads, namely the United States, will not be dissed, as it would be a reflection on him.
You can't have a consistent set of principles, or an understanding of economic verities, if your id is the driving force in your worldview.
LaDuke made reference to the body language of Pompeo and Kelly. I'd like to know the content of private conversations between Larry Kudlow and Stephen Moore these days.