America • Americanism • Center for American Greatness • Donald Trump • Foreign Policy • Greatness Agenda • Post • Trade

Replacing Nikki Haley: Why Not ‘Jarvanka’?

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With the resignation of Nikki Haley as the Trump Administration’s ambassador to the United Nations, naturally talk has turned to who might replace her at Turtle Bay. According to news reports, the White House is discussing Goldman Sachs executive and former deputy national security advisor Dina Powell as a replacement. But a commentator on MSNBC earlier Tuesday joked that President Trump might well name his daughter and close adviser, Ivanka, to the post.

Don’t scoff. It isn’t so far-fetched. What’s more, given the fact that Ivanka Trump is only part of the dynamic duo that is (in Steve Bannon’s formulation), “Jarvanka”—referring to her husband, Jared Kushner—selecting Ivanka would be a decent pick.

Think about it: Ivanka previously ran a mostly successful international business venture. As a presidential adviser, she has effectively helped her father in implementing key policies—such as paid family leave—that otherwise would not have become critical Republican Party issues.

Yes, she is—as the president himself has admitted—a “Manhattan Democrat.” But that might help her at the United Nations. Plus, she and her husband are proud New Yorkers who’ve disliked the social scene in Washington, D.C.

At most every turn, Ivanka has performed well on the international stage. Whether it was representing her father at an international counterterrorism conference in Germany last year or, more famously, spending a week buttering up various Asian leaders for the president before the landmark Singapore summit with North Korean dictator Kim Jong-un, Ivanka has proven herself an able diplomat time and again.

Similarly, as Haley acknowledged in her resignation announcement, the president’s son-in-law, Kushner, has performed brilliantly in his role as a presidential adviser. She even referred to Kushner as the president’s “hidden genius.” Kushner was a critical member of the 2016 presidential campaign. He leveraged that success into a powerful position in the president’s inner circle (much to the chagrin of many long-time Trump advisers—most of whom are no longer in the administration).

Like his wife, Ivanka, Jared is a moderate Manhattan Democrat. But that hasn’t stopped him from being a good team player in the Trump Administration. In fact, on inauguration day, Kushner was handed a key segment of the international trade portfolio, as well as the Middle East peace process (along with resolving the Iran problem).

Many at the time couldn’t believe that Kushner would be capable of accomplishing anything. After all, if nearly three decades worth of seasoned professionals, from Colin Powell and Condi Rice to Hillary Clinton and John Kerry, couldn’t do the job, what hope did this amateur have of stabilizing the Middle East without giving in to America’s enemies, abandoning America’s friends, and committing more U.S. troops to the region?

Kushner squared that circle last year when he brokered an historic arms agreement with the Sunni Arab states, creating a defensive alliance against Iran.

Kushner has also maintained a close, personal working relationship with the young leader of Saudi Arabia, Crown Prince Mohammad Bin Salman. In part, this relationship has allowed for a moderating influence to be exerted over hyper-conservative Saudi Arabia. For the first time in its history, Saudi Arabia is amenable to Israel; its leadership is now in favor of liberalization; and the Saudi government has stopped double-dealing with Salafist extremist groups.

All of these changes are vital to containing Iran.

Kushner also deftly handled the contentious U.S.-Mexican trade renegotiation. It was Kushner, more than anyone else, who helped to broker a trade deal with our southern neighbors at a time when few believed it could be accomplished. Thanks to his astute management of the situation, Kushner’s Mexico trade agreement ended up forcing the Canadians to the bargaining table, which fulfilled a key campaign promise of ending the North American Free Trade Agreement and forging a better deal for American interests, the USMCA.

President Trump needs more Jarvanka. Although they received much flack at the beginning of Trump’s tenure, the duo have proven they can execute difficult tasks. Plus, it’s not as if nepotism hasn’t been in the government before. President John F. Kennedy famously named his brother Robert as his attorney general. That partnership proved to be a potent political force.

Jared and Ivanka have freewheeling access to the president, which has generated some controversy. But it’s worth remembering former Vice President Dick Cheney enjoyed unprecedented “walk-in” privileges with former President George W. Bush—access no other vice president had before (or since). Like Jarvanka, Cheney had unlimited access to any issue area he fancied, from energy to foreign policy to bureaucratic management.

If it works, don’t complain.

With Haley leaving the U.N., the United States is losing an ardent defender in a den of anti-American globalism. President Trump needs someone he can trust (and someone who can get the job done). Nominating Ivanka would also allow for Jared to have vital influence in this key domain. Together, Ivanka and Jared would continue to serve the president far better than anyone else. It would be just the sort of disruptive move that Trump’s presidency has become known for—accusations of nepotism and politics be damned.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit: Filippo Monteforte/AFP/Getty Images

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America • Donald Trump • Greatness Agenda • Post • Trade

Actually, Trump Is a Free Trade Hero

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President Trump has stated on numerous occasions that he wants to increase trade. Under his wise rule, he assures us, American trade will thrive. It will be Yuge! Why would anyone doubt that desire? He’s a businessman and businessmen want to do more business not less. In pursuit of this, Trump has also said that that he favors a low or no tariff world, but that it must be based on reciprocity – an easily understandable form of fairness but one which has earned Trump scorn from right, left, and center.

The subject came up at a dinner I attended recently. It was mostly populated by right of center journalists and intellectuals, but there were a few people from the business world there too. When the topic turned to Trump’s trade policy, several of the card-carrying representatives of the local chapter of Conservatism, Inc. expressed a warm disdain for what they understood to be Trump’s free-trade heresy. But were they right? The business tycoons, to a man, disagreed. Rather they saw in Trump’s rhetoric and actions a clearly defined policy of expanding trade on terms favorable to the American people. And this, the businessmen agreed, was a worthy goal. The theorists didn’t seem to get it.

But Trump does. He understands what the intellectuals and journalists whose livelihoods do not depend upon it don’t: trade is good to the extent that it promotes and expands national prosperity . . .

Read the rest at Spectator USA.

Photo credit: Mark Hoffman/Milwaukee Journal Sentinel/TNS via Getty Images

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America • Americanism • Center for American Greatness • Congress • Elections • Greatness Agenda • Political Parties • Post • Republicans • statesmanship • Trade

Ohio Squeaker Shows GOP Has A Lot To Learn About Winning

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Republicans and Trump supporters needed some good political news, and they got it Tuesday night in the special election for Ohio’s 12th Congressional District.

Republican Troy Balderson’s narrow, one-point win doesn’t mean a “red wave” is swelling. Instead, the results contain both good and troubling news for President Trump and his party. Rather than setting the GOP at ease, these results should serve as a wake-up call to improve their focus on swing voters before the November elections.

These swing voters fall into roughly two camps: those who voted for Mitt Romney in 2012 and Hillary Clinton in 2016—“Romney/Clinton voters”—and those who voted for Barack Obama and Donald Trump—“Obama/Trump voters.” Despite millions of dollars and pro-Balderson ads featuring moderate Republican Governor John Kasich, Balderson on Tuesday ran behind Trump’s already historically low percentages in suburban Delaware and Franklin Counties. Some of this surely is due to Democratic enthusiasm, but the bulk of it is not. Romney/Clinton voters are still dead set against President Trump and what they think he stands for, and they are voting for Democrats to send the party a message.

It might be troubling for many Republican leaders to hear this, but it appears these voters are lost to the GOP in most races this year. The booming economy might be attracting yet another group of voters, those who voted for Romney and either Gary Johnson or Evan McMullin, to stay with the party. But there is no evidence that this, the tax cuts, or any other policy measure yet devised can overcome the antipathy many of the Romney/Clinton voters feel for the president.

Ultimately, enough of these voters have to be won back if a new Republican Party is to become the clear majority party. But that won’t happen this year, and the party needs to plan accordingly.

What should trouble the party more than this drag on their numbers is the apparent weakness Republican candidates have among the Obama/Trump voters. Apart from the urban and suburban parts of Franklin and Delaware county where the Romney/Clinton voters live in high concentrations, Balderson won by huge margins in the district’s other five counties. The problem, however, is that he still ran behind Trump’s share of the vote in all but his home county of Muskingum.  Even worse, turnout in each of these counties—which swung to Trump by up to 29 percent in 2016—was much lower compared to 2016 than it was in Delaware and Franklin. Again, some of that is because of Democratic enthusiasm, but some of it is also due to lack of enthusiasm from Obama/Trump backers.

Trump’s rally on Saturday night surely energized some of these voters, but Trump can’t visit every seat the weekend before the election in the fall. Instead, campaigns in places with large numbers of Obama/Trump voters—which is to say, all of the key Senate seats in play and the majority of the House seats up for grabs—need to build strong messages into their campaigns early to motivate turnout.

That involves understanding what Trump’s appeal to these voters is—and most Republican campaigns still show they just don’t get it.

Restricting immigration is part of that appeal, but only a part. Trump won these voters’ loyalty because he showed them he cared about their lives, their aspirations, and their role in building America. That means talking about a lot of things many Republicans prefer to avoid.

Trade is one of those things. The Obama/Trump voter wants someone fighting for them, and for many that means fighting against unfair trade deals that have put them under enormous economic pressure. A Republican candidate does not have to come out and endorse all of the president’s specific tariffs, but the idea of fighting for American jobs against unfair foreign competition is a winner.

Democrats in swing states understand this. Ohio’s senior U.S. Senator Sherrod Brown has been running ads against unfair Chinese competition for years, and Indiana Senator Joe Donnelly is hitting his Republican challenger for allegedly shipping jobs overseas in his business. With Trump in the White House, however, fighting for American jobs should be an issue Republicans own. But for that to happen, Republicans have to claim the field and too many don’t.

Love of community and country should also be part of this appeal. Too many of these voters live in places that have seen better days, and those who don’t might know life would be much harder for them if they were young again. They love America, but they feel America doesn’t necessarily love them back. “When we make America great again, we’ll make {insert name of area} great again” communicates both the president’s slogan and his theme in aid of the GOP cause.

Republicans shouldn’t be afraid to mix it up a bit on culture, but that doesn’t mean talking incessantly about so-called social issues. Many Obama/Trump voters feel Democrats don’t respect them. “We’re not deplorables, we’re Americans” should be a tagline in at least one GOP ad in every state or seat with lots of these voters. Let the media howl with disdain or argue it’s a dog whistle. That just makes it easier to get these voters riled up, because they know they’re not bad or racist folks.

Put these things together, add them to standard appeals to partisan Republicans, and you can repeat Trump’s stunning margins outside of the major metro areas. That means gaining Senate seats, protecting House incumbents in seats like Iowa’s First District and Maine’s Second, and maybe picking up some of the five open House seats currently held by Democrats but won by President Trump. Do that and we’ll be talking about a blue lagoon, not a blue wave, after the midterms.

The political challenges Republicans face are the same as those faced in almost every developed country. Smart conservative parties and leaders everywhere are trying to surf these waves and include disaffected blue-collar workers in their coalitions even if it means they lose some of their traditional support. Republicans barely dodged a bullet in yesterday’s special election. Time then to load their own weapons, shoot wisely, and fight to win.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit: Mandel Ngan/AFP/Getty Images

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Center for American Greatness • Congress • Democrats • Donald Trump • Post • Republicans • Trade

The Blue-Collar Elephant in the Room

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There’s an elephant in the Republican Party’s  midterm room. Discussion about how to close the yawning generic ballot gap has focused on building the wall, selling the tax cuts, and emphasizing how President Trump has delivered on judicial nominees and deregulation. All of these issues are of particular import to Republicans and the base. But so far almost all discussion has focused on how to attract the voters who put Trump in the White House to begin with, the disaffected Democrats and independents who switched from President Obama to Trump.

This remains puzzling. Trump got fewer votes than Romney in the major suburban areas of Ohio, Pennsylvania, Iowa, and Wisconsin, yet he carried all four states where Romney couldn’t even come close. Trump’s winning margins exceeded Romney’s by a minimum of 6 percent in five other states (North Dakota, Montana, Missouri, Indiana, and West Virginia) with incumbent Democratic senators up this year. It should be clear that the GOP’s majority and control of the presidency rest on the votes of white, blue-collar Democrats and independents. Yet no one talks about these voters as a distinct group to win over. They are presumed to be part of “the base.”

If that were true, President Romney would be nearly halfway through his second term. If that were true, the GOP would have won every presidential election between 1980 and 2008, losing only when the Great Recession threw millions of these voters out of work. If that were true, American politics for the past 30 years would be completely different.

The fact that this is not true, and yet the Republican Party leadership continues to act like it is, explains why the GOP continues to struggle to retain power whenever it achieves it.

I could throw poll data at you until you’re blue in the face to show that these voters value different things than do establishment, evangelical, or movement conservative Republicans. I summarized a lot of these data in the final chapter of my book, The Working Class Republican: Ronald Reagan and the Return of Blue-Collar Conservatism. In short, these voters aren’t moved by culture wars in either direction; they value jobs and security equally with growth and over entrepreneurship; and they favor a robust but not adventurous foreign policy. They can live with the base of either party as long as their needs and wants are satisfied.

Republicans Ignore Trump’s Message at Their Peril
Trump demonstrated that connection with these voters in spades. He clearly is not a culture warrior, except to the extent that he provokes progressives to engage in culture wars of their own against these voters. He ran as a candidate of jobs over growth, and explicitly took entitlement reform off the table. Moreover his break with the Bush-McCain approach to foreign policy was music to these voters’ ears.

These approaches, not the GOP’s priorities, are what gave Trump victory and the GOP its unexpected chance to govern. Failing to understand that means these voters have less reason to turn out and less reason to vote Republican. This lack of comprehension puts both House and Senate control in jeopardy.

One can see this most clearly in the GOP’s approach to trade. Trump made renegotiating foreign trade deals a major part of his campaign. While the media focused on his immigrations stances, Trump’s speeches made trade an equal focus. The evidence shows this helped him. Clear majorities of Republicans in the 2016 primary exit polls and in many other surveys since believe that free trade either has cost more jobs in America than it has brought or that expanded trade deals have been bad for America.

This is particularly true among these non-Republican blue-collar voters who have shown a yearning for trade restrictions since they turned to H. Ross Perot, who campaigned against the then-proposed NAFTA deal with Mexico, in 1992. Evidence from the special election in Pennsylvania’s 18th Congressional District, where a Republican lost a seat in steel country that Trump had carried by 20 points, suggests that the GOP candidate could have won if he had just campaigned in support of the president’s trade policies. Yet there is no GOP voice today echoing Trump’s views.

Don’t Overlook Key Voters
Republican cluelessness is on display right now in the special election in Ohio’s 12th Congressional District. Trump is campaigning there on Saturday for Republican nominee Troy Balderson. Polls show that this district, which Trump won by 12 points, is now up for grabs. When you look at the seat, it’s not hard to see why.

Ohio-12 can be divided into two different areas. Sixty percent of the district is in the affluent suburbs of Columbus, the state capital. This area, like many similar areas, moved heavily away from Republicans in 2016, largely in reaction to Trump. Democrat Danny O’Connor comes from the largest part of this area and is benefiting from Democratic and moderate, anti-Trump Republican hatred for the president. These voters are going to the polls to vote against Trump come hell or high water.

The remaining part of the district, however, contain loads of non-Republican Trump supporters. Romney won four of the five counties in this area, but Trump won all five. Moreover, he improved upon Romney’s margins in each by between 15 and 29 percent. If Republicans energized these voters, they would more than offset the Democratic and moderate Republican anger from the suburbs and Balderson would be cruising to victory.

Instead, the National Republican Campaign Committee and the Congressional Leadership Fund have overlooked this key group. The ads they have run for Balderson don’t emphasize the issues or themes that Trump used to attract them in 2016. Instead, they have concentrated on vanilla topics like education spending or combating opioid abuse. As a result, polls show that Balderson’s support is nowhere near Trump’s level in the areas of the district that could deliver his majority.

Trump’s appearance is the Republicans’ last chance to target these voters. He should focus on them in his stump talk, expressly speaking directly to them and explaining why Balderson is the type of Republican they can support. The president could tweet about the race, not in the vague generalities of his pro-Balderson tweet on Thursday, but by specifically calling on Democrats and independents who backed Trump to back him again by backing Balderson. The president might note that “Dishonest Danny” says he won’t back Nancy Pelosi for Speaker of the House, but that when pressed on TV he said he would back whomever the Democratic majority voted for. Tweets like that might even make the evening news, as we know the media can never resist Trump starting a fight.

This might not happen by the election on Tuesday. But win or lose, Balderson’s close race should serve as a wakeup call to the Republican high command in Washington. If they can’t learn how to mobilize the blue-collar Democrats and independents who backed Trump, they will forfeit their best chance to gain seats in the Senate and offset inevitable House losses in the suburbs. And to do that, they have to understand what makes them tick. After all, if you’re not into them, don’t be surprised to discover that they’re just not that into you, either.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: Mark Lyons/Getty Images

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Democrats • Elections • Greatness Agenda • Immigration • Libertarians • Political Parties • Post • Republicans • The Culture • The Left • The Media • The Resistance (Snicker) • Trade

Libertarian God-Kings Throw in With Democratic Socialists

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The well-heeled, much-feared Koch network announced from its biannual meeting in Colorado Springs this week that it would withhold support from Republican candidates in three of the eight closest races for U.S. Senate. The news, reported in Politico and elsewhere, probably shouldn’t come as a surprise. Libertarians, who value their utopian principles more than they value saving the political culture that indulges their fantasies, are very likely going to be the voting bloc that turns control of Congress over to Democrats in November. Why should the über Libertarian God-Kings, billionaire brothers Charles and David Koch, fail to act in accordance with these same fantasies?

And it is fantasy. You can’t shrink government if “free trade” has gutted the nation of jobs at the same time as “open borders” has flooded the nation with destitute immigrants.

That’s the logic that libertarians, funded by the Koch organizations, refuse to admit.

Enemy of Your Enemy is Not Your Friend
Instead, America’s libertarians trumpet a classical liberal dogma, repeating the same phrases almost mindlessly, their vacuity only matched by their certainty. Like glassy-eyed cult members, they seem to think the ideas they regurgitate constitute the only true path. Contrary opinions and cold facts, no matter how supported by evidence and reason, bounce off them like balloons on Mars.

In the case of the Kochs, maybe the agenda of free trade and open borders doesn’t have to connect with principles. It just helps if it looks that way. Because it might also have to do with keeping the Kochs’ foreign-based industries profitable, and it might also have to do with increasing the supply of labor in the United States in order to keep down wages.

And who knows, maybe the Kochs’ war on candidates who are too Trump-like may have to do as well with resurrecting the Koch image, so savaged by the Left. But what they’re forgetting is this: If your enemy (Democratic Socialists) have an enemy (Trump) that is suddenly your enemy too, that doesn’t make them your friend. It just makes them your enemy who is also the enemy of your other enemy. When your enemy, with your help, is done with your other enemy, don’t expect peace. Expect more war.

Was that too deep and convoluted? Sorry. Let’s express this concept in more immediate, concrete terms: the libertarian war on Trump is going to hand America back to the Democrats.

What Would Libertarians Prefer?
While the Kochs pull the plug on Republican Senate candidates 
Kevin Cramer in North Dakota, Dean Heller in Nevada, and Mike Braun in Indiana—presumably for some heresy or another against sacred libertarian “principles”—it is worth asking: How do the Kochs propose we should conduct our trade and immigration policies?

What is the ideal immigration policy according to the Kochs? Open borders? Nearly open borders, which is what we have now? Some other reform—and if so, what? Merit-based legal immigration as the president proposes, or something else? Let’s hear it.

What is the ideal trade policy according to the Kochs? Shall we just allow other nations to cheat, consistently imposing tariffs far greater than our own, and call it “free trade,” all while convincing ourselves there is no downside to allowing foreign investors to buy up American assets in order to balance the current account? How shall the Kochs propose we formulate our trade policies? Stay the course? Or what?

Perhaps the Kochs will please excuse those of us still clinging to the troglodytic notion that it’s bad, not good, for America to continue to import welfare recipients at the same time as it exports jobs. Is it even possible to reason with these God-Kings of Libertarian Land?

Maybe some of us aren’t placated by the fact that the current account is balanced by selling America’s domestic assets to foreigners. Particularly when these foreign investments tend to be concentrated either in real estate—which serves no economic purpose other than further to inflate the bubbly real estate portfolios of investment banks and public employee pension funds while turning ordinary Americans into either renters or mortgage slaves—or in strategic technology companies, at least those companies whose intellectual property they didn’t already steal.

“Starting a trade war.” No. Incorrect. We’ve been in one for years. Their tariffs are bigger than our tariffs. So to get their attention we raise our tariffs. Got a better idea? Let’s have it.

And maybe some of us simply don’t believe the utopian idea that we can import millions of people from medieval, hostile cultures, and magically turn them all into engineering Ph.D.’s who dabble in libertarian philosophy in their spare time. Maybe we recognize it as hubris reminiscent of the neoconservative fantasy that propelled America into Iraq in 2003. That fantasy held that all we had to do was topple a dictator, and everyone living there would suddenly become Jeffersonian Democrats, attending PTA meetings, having bake sales, and voting for safe, sane, moderate, vanilla candidates in an “American-style” democracy.

Oops. How did that turn out? But never mind. Let’s import millions of more refugees, while doctors from South Korea and engineers from Ukraine wait years for their legal visas. How’s that catchy phrase go? “Bomb ’em and bring ’em.” Brilliant.

Policies That Would Ensure Decline
Then there’s the federal budget deficit, and there’s welfare, both anathema to libertarians. They claim the trade deficit enables the budget deficit by giving foreign exporters with trade surpluses incentives to buy T-bills. And they claim that welfare is the problem, not immigrants who “do the jobs Americans won’t do.” But what if these libertarians are looking at a horse, and thinking it’s a cart? What if reducing the trade deficit would force establishment politicians to reduce the budget deficit since there would be fewer buyers of T-bills? What if eliminating illegal immigration would force establishment politicians to reduce welfare benefits since there would suddenly be more available jobs?

Globalism has its place, but America can’t help the world’s less fortunate if it’s culturally disintegrated and economically destitute. Compassionate nationalism depends on a coherent, prosperous nation.

The irony of the Kochs’ failed logic, and by extension, the entire libertarian movement’s failed logic, would be amusing if it weren’t so dangerous. Open borders and weak trade policies guarantee American decline. They guarantee social chaos and economic stagnation, to which the only possible response will be a government that is bigger than ever. Those wicked socialists, the supposed nemesis of the libertarian ideologues, must be laughing especially hard these days.

Photo credit: Joe Klamar/AFP/Getty Images

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America • Economy • Foreign Policy • Libertarians • Post • Trade

Free Trade’s Faustian Bargain: Selling America’s Soul for Trinkets

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Spectators claim that Satan himself appeared on stage during the opening performance of Christopher Marlowe’s play Doctor Faustus (1588). The grizzly specter, it was said, drove men mad with fear. Some in attendance wanted to demolish the theater, while others wanted to hang Marlowe for his occult summoning. In spite of the controversy (perhaps because of it), the play was a hit. Today Faustus remains one of the greatest works of literature. Why?

Exquisite language?—lines like “the face that launch’d a thousand ships” have haunted readers for centuries. Perhaps. But time rarely preserves art for art’s sake: what survives is useful; it serves a purpose. Doctor Faustus is no exception.

The plot is simple: Faustus sells his soul to Lucifer in exchange for demon Mephistopheles’ service for 24 years. Faustus dreams of wealth: I will “wall all Germany with brass . . . fill the public schools with silk” and “live a life of all voluptuousness.” In the end, Faustus wastes his power and Satan takes his soul.

Faustus’ fate reveals two important lessons. First, avoid asymmetrical trades—never exchange souls for silk (permanent wealth for fleeting luxury). Second, always consider time-horizons: don’t trade heaven for worldly pleasure ($2 tomorrow for $1 today).

Ironically, economists recommend precisely the opposite—which is why America’s economy is so dysfunctional.

Consider the trade deficit: America has run a deficit every year for the last 40 years. Last year alone the deficit cost $796 billion. How do we pay for deficits? We sell America’s soul. Every year, America trades billions worth of land, corporate ownership, and debt for imported “voluptuousness.”

America is Faustus—and we’re running out of soul to sell.

Homo Fuge: Yet Shall Not Faustus Fly
Mephistophelian-minded economists at the Cato Institute claim that trade deficits don’t matter because they don’t really exist. Instead, international trade is best conceptualized as a balance of payments: America’s trade deficit is equalized by a surplus in capital inflows. This is true. But what does a “surplus in capital inflows” mean practically? It means we buy foreign goods, and foreigners buy our assets and debts—we get “voluptuousness,” they get soul.

Unless you’re an academic, this is not very shocking. But for argument’s sake, here’s how trade deficits work: America buys more goods from foreigners than we sell to them. This creates a trade deficit—worth $796 billion in 2017.

Now for the other side of the equation: to pay for the goods, America sells more services than it buys (think banking and tourism). This helps, but still leaves us $566 billion in the red. Thus, America must also sell assets and debt.

Assets include real estate, artifacts, corporate shares—anything of value that was produced in the past. Selling assets is not always or necessarily bad. For example, selling your mothballed Harley to buy a home gym might be wise. However, pawning your great-grandma’s wedding ring to buy groceries isn’t advisable. It’s context-dependent.

As a whole, America’s asset sales resemble pawning great-grandma’s wedding ring, not scrapping an old Harley. Consider that foreigners bought $153 billion worth of American real estate in the 2016-2017 fiscal year—everything from New York penthouses to Nebraskan ranches. This has the negative downstream effect of increasing housing prices and rents—in addition to the social problems associated with absentee landlords.

For example, housing is 73 percent more expensive today (in real terms) than it was in 1973, and many young people can no longer afford homes in their own homeland. Likewise, even highly educated professionals are being priced out of cities like San Francisco. By embracing free trade, Americans swapped “cheap goods” for high rents and big mortgages. Was it worth it? For most Americans, probably not.

The United States also sells billions in equities, that is ownership of U.S. corporations—and the associated profits. As of 2017, foreigners owned roughly 38 percent of American equities, when including foreign direct investments and foreign portfolio investments. This is up from just 12 percent in 2007, and the number is growing fast.

America pays for the rest of the deficit by selling debt. This is reflected in the endless growth of U.S. public and private debt levels. For example, foreign investors own over 44 percent of America’s national public debt, valued at more than $6.3 trillion. Foreign investors also own nearly 30 percent of all U.S. corporate bonds and a large percentage of America’s private debt.

Just as Faustus’ 24 years eventually elapsed, American will soon run out of souls to sell. Remember, our assets are finite, and there are tacit limits on our debt-carrying capacity—the 2008 crisis revealed but a taste of our economy’s structural fragility. Never deal with the Devil.

Lente, Lente Currite, Noctis Equi!
Doctor Faustus contains within it two lessons worth heeding.

First, avoid negative asymmetries. In selling his soul to Satan, Faustus committed the cardinal economic sin of trading his (only) asset for consumables—basically, he sold great-grandma’s ring for groceries. Like Faustus, America only has so much soul (assets) to exchange for imports. When we run out, we will regret having sold our homes, companies, and heritage for Chinese-fabricated Troll Dolls and Made-in-Mexico pet rocks. Guaranteed.

Adding to this asymmetry is the element of control. Foreigners are furiously buying-up our cities and control of our corporations—soon America’s economic future will be in foreign hands. Aligning our economic might with foreign entities that may not have our best interests at heart jeopardizes America’s future. Furthermore, corporate ownership provides a ready-made conduit for industrial espionage. For example, the Chinese have already leached trillions-worth of American technology and intellectual property through corporate takeovers and partnerships.

Of course, America’s Founders were aware of this problem. In fact, the second piece of legislation George Washington signed as president was the Tariff Act of 1789. Its purpose? To secure economic autarky. Washington, like Hamilton and (eventually) Jefferson, knew that political independence could not exist without economic independence. Too often economists forget that economics is not fundamentally about wealth. It’s about power. This is the real reason America needs tariffs.

Adding a layer of nuance: America runs a nearly $400 billion annual trade deficit with China. This money eventually returns to America through the account surplus—but not directly. Because America’s currency is a global reserve currency, China can spend its U.S. dollars in Southeast Asia, South America, and Africa rather than in America. This allows Beijing to buy political influence from local potentates, and to secure natural resource deposits.

In this way, America’s trade deficit is partly to blame for China’s colonial adventures in Africa. Likewise, we fund China’s “One Belt, One Road” initiative in Southern and Central Asia, which seeks to realign the region into China’s ambit.

The trade deficit should be America’s number one security concern. After all, nothing has done more to upset America’s global hegemony than China’s mercantile rise and neocolonial antics—and this includes the war in Syria and Iran’s nuclear ambitions.

Faustus’ second lesson is to always consider time-horizons. When Faustus sold his soul, he traded a temporally distant eternity of suffering for immediate pleasure. Most people are guilty of this sin, albeit on a smaller scale. How often do you snack on candy, or buy something impulsively? If you’re like me the answer is: too often. This is because the human brain instinctually loves instant gratification—especially when the downsides (bellies and credit card bills) are delayed.

Just like Faustus, America chose instant gratification. Over the last four decades, we’ve exchanged trillions in debt for foreign trinkets. These debts eventually must be repaid—with interest. This will be a Herculean task. Consider that in fiscal year 2017 America paid a net $276 billion to service the national public debt, according to Pew Research. That number will only increase, as the United States continues to borrow to feed its trade addiction, and as the structure of America’s debts shift ever-further into the debtor category.

Another asymmetry worth noting lies in the composition of America’s trade deficit. In 2017 America ran a deficit of $110 billion in advanced technology products. This indicates America’s diminishing technological edge and waning industrial base, which is a problem since advanced industries are the engines of long-run economic growth. We need to build the future—not buy it.

Stand Still, You Ever-Moving Spheres of Heaven
In the end, Faustus lamented his fate. He prayed that time would stand still, that he would dissolve into nothingness rather than face eternity—but it was too late. The demons pulled him into the black abyss, but not before he cursed his choice:

Curs’d be the parents that engender’d me!
No, Faustus, curse thyself. . .
[for thou hast] depriv’d thee of the joys of heaven.

Like Faustus, America made a regrettable choice. But the hour is not yet struck—do we abandon our devotion to the false god of “free trade,” and instead return to the time-tested wisdom of tariffs? Or do we spurn our Founders’ advice and continue down the path of import-fueled “voluptuousness?”

Either way, we know what fate awaits.

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America • Donald Trump • Economy • Foreign Policy • Post • taxes • Trade

The NY Times is Wrong About Trade—So is Everybody Else

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President Trump earlier this month told CBS News that the European Union is America’s “foe” because of “what they do to us in trade.” The European Council President Donald Tusk frantically responded:

Many free traders see this as far more than simple rhetoric. Economic historian Adam Tooze took to the pages of the New York Times last week to argue Trump is “deliberately foster[ing] economic nationalism.” In this way, Tooze suggests, Trump is little better than China’s President Xi Jinping or Russia’s Vladimir Putin. How dare they upset the liberal economic order?

Tooze, like all good economic liberals, thinks Trump’s view of national competition is antiquated—and dangerous. How could anyone fail to see the benefits of free trade? “We global” is not just a DJ Khaled album: it’s an affirmation of principle, a statement of fact.

Of course, Tooze’s world is nothing but a dream. It’s time he—and every other free trader—awoke from their intellectual stupor.

The Future is the Past
Tooze argues that Trump’s view of international competition is archaic:

To think . . . of nations locked in mortal economic rivalry shows a grave misunderstanding of how competition actually works . . . If neoliberalism is about anything, it has been about creating the largest possible economic space for competition. But the protagonists aren’t supposed to be states . . . but businesses, investors and workers.

Basically, Tooze thinks nations should cooperate, and leave the competition to individuals. This makes sense, but only theoretically. In reality, most nations are unwilling to simply melt away for the benefit of global citizens—even if this enriches their own people. After all, money is power; and politicians, be they democrats or dictators, are loath to surrender either.

Also, cheaters prosper.

Consider how America imports Chinese goods with minimal scrutiny, while China bars most American companies from operating in China. They do this not because they’re stupid—as free traders imply—but because it works. That is, China gains more from predation than free trade. And it’s not just about the trade deficit. China also steals roughly $400 billion in American intellectual property annually.

Why would China want to trade with America when they can pillage us instead? They wouldn’t. It would be unreasonable.

President James Monroe adumbrated my point in his 1822 State of the Union address: “Whatever may be the abstract doctrine in favor of unrestricted commerce,” the conditions necessary for its success—reciprocity and international peace—“has never occurred and cannot be expected.” Monroe is quite right: “real international free trade” is a unicorn, as rare as “real communism.” Not only has it never existed, but it has always failed when attempted between multiple states.

Heads I Win, Tails You Lose
Tooze’s argument also suffers from a major dialectical flaw: he discusses free trade only on its own terms. That is, his analysis considers how the addition of free trade helps or harms us, but does not consider how the subtraction of protectionism helps or harms us.

Economists often conflate these two distinct questions because of what I call the heads-tails fallacy. This fallacy occurs when people view two systems as opposites, and thus assume that the costs and benefits are zero sum—a benefit on one side of the coin is necessarily a harm on the other. Although this makes intuitive sense, it’s often untrue when dealing with complex systems. Benefits and harms may inversely correlate, but not necessarily. You need to study each “side of the coin” separately.

Tooze—like most liberal economists—fails to look at free trade and protectionism separately. For example: Tooze correctly notes that more integrated economies are harmed by greater risks of economic contagion. Thus, an implied benefit of protectionism must be decreased vulnerability to contagion. This is true.

But Tooze also argues that a benefit of free trade is greater competition between businesses and individuals. Thus, the implied harm of protectionism is decreased competition. But this implication is false, even though it makes intuitive sense. This is why the heads-tales fallacy is so dangerous.

Protectionism actually increases global economic competition.

Economic competition, like biological competition, is multidimensional. Consider the levels of Darwinian pressures imposed on humans: group selection operates at the tribal level, as more successful tribes outcompete less successful tribes; and both kin and individual selection operate within the tribe, that is, more successful families and individuals outcompete the rest. More surprisingly, Darwinian pressures work within our bodies at the cellular level whenever the body engages in autophagy—weak cellular components and cells are destroyed first during a fast.

If biological competition is ferocious and multidimensional, then economic competition is no different. Individuals compete with one another for wealth, as do (successful) families. Businesses also compete. But productive competition doesn’t end with private entities: cities, nations, and civilizations also compete. In fact, this layer of competition may be the primary engine of growth.

For example, the economic and technological explosion in Renaissance Italy was motivated, to no small degree, by largely non-violent competition between cities—glory for glory’s sake. Likewise, the Industrial Revolution was born of Britain’s struggle for survival against France. In this case, necessity was indeed the mother of invention. And of course, the civilizational clash between the West and Soviets propelled man into the space age. This is not to credit government with mankind’s greatest inventions, but we must recognize that competition between peoples—not just people—matters.

To suppose, as does Tooze, that removing national competition from the global economy would somehow increase competition is laughably naive. Can you imagine a biologist arguing that group and kin selection pressures decrease total genetic competition? Of course not. The very thought is asinine—as is the liberal position on free trade.

America’s free traders claim to champion competition while simultaneously crusading to end competition. Meanwhile, they cannot see that China is currently outcompeting them by completely ignoring all their talk of competition. Ironic.

Photo credit: iStock/Getty Images

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America • Democrats • Donald Trump • EU • Europe • First Amendment • Foreign Policy • Greatness Agenda • Post • The Media • Trade

A Tentative Trade War Win

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Ever since President Trump launched a so-called trade war back in January, the expert political class has been in a tizzy.

Economists warned that U.S.-imposed tariffs aimed at Canada, China, and the European Union would devastate the economy and destroy millions of jobs. Politicians on the Left and the Right condemned the president; some congressional Republicans are threatening to limit the president’s future authority on trade policy. Pundits claimed (hoped?) the measures would most hurt Trump supporters in red states.

But Trump’s latest sucker punch to the expert political class follows a familiar pattern that Our Betters still haven’t figured out. They are the unwitting sparring partners in the president’s entertaining rope-a-dope. Trump makes a hasty, impetuous comment or policy announcement and various experts howl that it will fail and commiserate about the president’s stupidity. Pundits warn it will yield harsh political consequences. The public catches on to a problem it didn’t know existed. The president’s foes capitulate; public views it as a win. Expert political class loses again. (See “Trump will never get 3 percent economic growth” predictions as the most recent example.)

Europe Comes to the Table
Admittedly, it is too soon to say whether the United States will prevail in Trump’s hardline trade gambit, but he can already claim one victory: After
 referring to the European Union as a trading “foe”—and unleashing the usual chorus of naysayers—Trump issued a joint  statement with European Commission President Jean-Claude Juncker pledging to resolve long-standing trade disputes.

“This is why we agreed today to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods,” the statement reads. “We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans. This will open markets for farmers and workers, increase investment, and lead to greater prosperity in both the United States and the European Union. It will also make trade fairer and more reciprocal.”

Score another one for—as expertise expert Tom Nichols calls them—“Trump and the Know-Nothings who support him.”

What most Americans didn’t realize until now is that there already is a trade war going on; our friends and allies are some of the combatants; and “free trade” doesn’t really exist, no matter how many times the neoconservatives say it does.

American Farmers Know the Score
Just ask any American farmer about China, a country now imposing 
tariffs on a number of American imports—including soybeans, cherries, and nuts—in response to Trump’s tariffs on Chinese goods. “Everybody understands that China has been screwing us for years,” Rob Sharkey, an Illinois grain farmer and host on Sirius XM’s Rural Radio, told me this week. “The system will never be completely fair, but it has to better than it is. They’ve manipulated the markets and most of us are happy we have a president who will stand up and do that.” The United States now has a $375 billion deficit with China, the widest gap on record.

Sharkey said the sentiment among farmers on Trump’s trade offensive is split. “Half the guys are like, ‘Great, we got Trump, he’s going to tackle this.’ The other half, mostly older guys who lived through the Carter embargo years, are saying, ‘Oh no, here we go again.’ Everyone wants it fixed, but wants it fixed soon because we are already at break-even prices.”

Other farmers share a similar view. “The acknowledgment by the Trump administration that we’re withering out here in rural America is great,” my friend Amanda Zaluckyj, a corn and soybean farmer in Michigan, wrote this week. “But it was Trump’s tariffs and moves to reopen beneficial trade deals that exacerbated the problems we’re already experiencing.”

“We want a president to focus on opening up new markets, finding new customers, and giving us more opportunities,” Zaluckyj added. “We need to hold countries like China accountable for playing games, but we need to be smart about it.”

And the short-term financial relief aimed at farmers to mitigate any losses due to the retaliatory tariffs appears unwelcome.

“Farmers learn from an early age that the only way to make a living is through an honest day of hard work growing crops and selling them at a profit. Farmers do not want handouts and they do not want U.S. taxpayers to foot the bill just to keep us afloat,” Zaluckyj wrote.

If the U.S.-China trade conflict escalates over the next few months, it could impact Senate races in key states. Four of the top 10 soybean-producing states—Indiana, North Dakota, Ohio, and Missouri—have vulnerable incumbent Democratic senators. If Republicans have a shot at capturing those seats, the tariff battle cannot worsen.

Advancing American Interests in Europe
Trump’s bluntness with European leaders also might expose to the public the EU’s increasing hostility to American agriculture, particularly its alarming resistance to modern farming techniques. Environmentalists are running the show in the EU; their ideological soul mates such as French President Emmanuel Macron are easily capitulating to their unreasonable and harmful demands at the expense of U.S. agribusiness. The cultivation of genetically engineered crops, mainly developed by U.S. companies, is
 banned throughout Europe. Most countries require that any food produced with genetically-engineered ingredients, or GMOs, must be labeled. It is a subtle but direct rebuke of American-made products since most processed food made here contains GMOs.

Thanks to Macron’s help last year, the European Parliament nearly approved a ban on the sale and use of glyphosate, the world’s most widely-used weed killer known as Roundup, which is manufactured by St. Louis-based Monsanto. The Fortune 500 company is Public Enemy No. 1 in Europe. The European Parliament voted in 2017 to bar Monsanto from lobbying any of its members, and green activists staged a fake tribunal against the company at The Hague in 2016, accusing the company of “crimes against humanity.”

The EU’s antipathy toward modern agriculture unquestionably is aimed at the United States. New limits on chemical residues on agricultural imports could cost U.S. farmers more than $7 billion in lost business.  

Last week, a European court ruled that crops derived via CRISPR, a truly miraculous gene-editing technology patented in the United States, would be treated as a classic GMO crop. This comes at a time when the Trump Administration is expediting the approval of more genetically modified crops and plants.

Perhaps this is an area that Trump could also address as negotiations with the EU progress. Sen. Charles Grassley (R-Iowa) acknowledged that the EU’s acceptance of more U.S. soybeans is a positive sign since “they usually don’t like GMO products.” (Almost all of the soybeans grown here are from genetically engineered seed.)

So, no matter how inelegantly or impulsive Trump’s trade action might be, it is raising awareness about long-simmering and unresolved issues in international trade. And it’s already getting results. What will the experts say now?

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit: Win McNamee/Getty Images

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Americanism • Conservatives • Donald Trump • Economy • EU • Europe • Foreign Policy • Immigration • Post • Progressivism • self-government • The Left • Trade

Mayday for Brexit

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President Trump managed to ruffle a few feathers during his visit to Great Britain this week before Air Force One even stroked the runway. Then, when he arrived, he nuked the entire country.

The disruptor-in-chief, sugar-blooded from shaking a few defense pennies from spendthrift NATO allies, brawled into Prime Minister Theresa May’s headspace, saying her current Brexit deal wasn’t what 17.4 million Brits voted for.

He was just warming the crowd. President Trump then gave an interview to our most influential newspaper, The Sun As you can imagine, the garrulous Guy Fawkes went wild.

Trump told The Sun that Prime Minister May had “wrecked” our Brexit negotiations. That our jewel-in-the-Brexit-crown trade deal with the United States was “probably dead.” Then he backed Boris Johnsonthe former foreign minister and May’s braying rivalfor prime minister. All this when political tensions fray to the last fiber.

BRINO
We British like to think we lead the world in etiquette. A dedicated industry churns out ever thickening tomes of advice on mannerly conduct. The 
Debrett’s A-Z of Modern Manners even advises the red of cheek to pen a handwritten note after an initial apology for a faux pas.

But politics is not a garden party. Donald Trump wasn’t elected to fawn and fiddle, but to move fast and break things.

He’s right, too. May’s proposed deal to take Britain out of the European Union certainly is not what the largest number of voters in this country’s history had in mind. Over half of them have junked her deal. And the Conservatives now trail the hapless Labour party.

Revealed last week, May’s plan doesn’t really take us out of the European Union. It’s BRINO—Brexit in Name Only.

After all, we voted to “take back control” of our money, our borders, and our laws. May’s proposal (which the EU will still likely shred) does none of that. The move to end “free movement of people” (open borders) has been replaced with “reciprocal mobility arrangements.”

We won’t control our trade deals. We won’t control our borders. We won’t control our laws.

Martin Howe QC, one of Britain’s top legal minds, said the deal amounted to a “worst-of-all-worlds ‘Black Hole’ Brexit,” chaining us to EU laws and regulations, but without a vote.

In other words, we have swapped syphilis for herpes.

Political Theater in London
It shouldn’t surprise. The political class never wanted a referendum. Ever since June 23, 2016, they’ve schemed cross-party, diluting the will of those they deride as “racist” or backward or both.

Much like their protestor fanboys, the ruling class doesn’t like this democracy thing. The revolt of the elites has swung violently against those, like us, who decided the last 30 years has been disastrous. We gave them the wrong answer and now they are provoked by what they consider our ignorance and ingratitude.

After all, they run the show. And they don’t think much of the audience chiming in mid-performance, let alone the rubes bouncing a few tomatoes off the stage. Elite theater is just thattheater.

The protestors eagerly lacquering their social media feeds into festivals of synthetic virtue are merely backup dancers. Sadly, not everyone can find the time to throng the streets of London selfying into Clarendon-filtered marvel. We have work.

Some time-lavished hipsters have even bilked £16,000 (around $21,000) for a 20-foot-high diaper-garbed inflatable “Trump Baby” to fly over Parliament Square.

They still need you to know that Trump is unacceptable. Well, they need you to know that they think Trump is unacceptable. In reality, they need you to know that they are faucets of goodness. Attention is limited in an age where the demand for it proves limitless. Some people just have to stand out.

But what point are they making? Emotional incontinence is not an argument. It just marks one as someone in devilish need of a Xanax.

Trump’s Policies Remain Popular in Europe
Perhaps they’d like to know that most Brits may not like Trump the man, but they do like his policies. A
study last year found majorities in Austria, France, Germany, Greece, Italy, and Poland would block all immigration from Muslim-majority countries. In the UK, just under half nodded, while only less than a quarter disagreed.

Moreover, 70 percent of Brits wanted all immigration tightened, and a hefty fifth wanted it cut entirely. And in the Europe they so gaudily crave? Voters in every EU member country stated immigration and terrorism were their top two concerns. The same issues, in other words, which planted Trump in the White House.

They might have noticed that Trump-like populist governments have plundered the continent of progressive parties. Austria, the Czech Republic, Hungary, Poland, and Italy are all occupied with the kind of folks they deem unacceptable. Why? Because the EU itself is shakier than EU high priest Jean-Claude Juncker after a libatory lunch.

And the inflatable Trump Baby? Well, it was filled with hot air and went limp after just two hours of work. Its staying power being a reflection of that of the protesters who carried it.

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America • Americanism • China • Donald Trump • EU • Europe • Foreign Policy • Germany • Greatness Agenda • Immigration • Middle East • NATO • Post • Trade

Reciprocity Is the Method to Trump’s Madness

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Critics of Donald Trump claim there is no rhyme or reason to his foreign policy. But if there is a consistency, it might be called reciprocity.

Trump tries to force other countries to treat the United States as it treats them. In “don’t tread on me” style, he also warns enemies that any aggressive act will be replied to in kind.

The underlying principle of Trump commercial reciprocity is that the United States is no longer powerful or wealthy enough to alone underwrite the security of the West. It can no longer assume sole enforcement of the rules and protocols of the postwar global order.

This year there have been none of the usual Iranian provocations—frequent during the Obama Administration—of harassing American ships in the Persian Gulf. Apparently, the Iranians now realize that anything they do to an American ship will be replied to with overwhelming force.

Ditto North Korea. After lots of threats from Kim Jong Un about using his new ballistic missiles against the United States, Trump warned that he would use America’s far greater arsenal to eliminate North Korea’s arsenal for good.

Trump is said to be undermining NATO by questioning its usefulness some 69 years after its founding. Yet unlike 1948, Germany is no longer down. The United States is always in. And Russia is hardly out, but instead cutting energy deals with the Europeans.

More importantly, most NATO countries have failed to keep their promises to spend 2 percent of their GDP on defense.

Yet the vast majority of the 29 alliance members are far closer than the United States to the dangers of Middle East terrorism and supposed Russian bullying.

Why does Germany by design run up a $65 billion annual trade surplus with the United States? Why does such a wealthy country spend only 1.2 percent of its GDP on defense? And if Germany has entered into energy agreements with a supposedly dangerous Vladimir Putin, why does it still need to have its security subsidized by the American military?

Trump approaches NAFTA in the same reductionist way. The 24-year-old treaty was supposed to stabilize, if not equalize, all trade, immigration, and commerce between the three supposed North American allies.

It never quite happened that way. Unequal tariffs remained. Both Canada and Mexico have substantial trade surpluses with the United States. In Mexico’s case, it enjoys a $71 billion surplus, the largest of U.S. trading partners with the exception of China.

Canada never honored its NATO security commitment. It spends only 1 percent of its GDP on defense, rightly assuming that the U.S. will continue to underwrite its security.

During the lifetime of NAFTA, Mexico has encouraged millions of its citizens to enter the U.S. illegally. Mexico’s selfish immigration policy is designed to avoid internal reform, to earn some $30 billion in annual expatriate remittances, and to influence U.S. politics.

Yet after more than two decades of NAFTA, Mexico is more unstable than ever. Cartels run entire states. Murders are at a record high. Entire towns in southern Mexico have been denuded of their young males, who crossed the U.S. border illegally.

The United States runs a huge trade deficit with China. The red ink is predicated on Chinese dumping, patent and copyright infringement, and outright cheating. Beijing illegally occupies neutral islands in the South China Sea, militarizes them and bullies its neighbors.

All of the above has become the “normal” globalized world.

But in 2016, red-state America rebelled at the asymmetry. The other half of the country demonized the red-staters as protectionists, nativists, isolationists, populists, and nationalists.

However, if China, Europe, and other U.S. trading partners had simply followed global trading rules, there would have been no Trump pushback—and probably no Trump presidency at all.

Had NATO members and NAFTA partners just kept their commitments, and had Mexico not encouraged millions of its citizens to crash the U.S. border, there would now be little tension between allies.

Instead, what had become abnormal was branded the new normal of the postwar world.

Again, a rich and powerful United States was supposed to subsidize world trade, take in more immigrants than all the nations of the world combined, protect the West, and ensure safe global communications, travel, and commerce.

After 70 years, the effort had hollowed out the interior of America, creating two separate nations of coastal winners and heartland losers.

Trump’s entire foreign policy can be summed up as a demand for symmetry from all partners and allies, and tit-for-tat replies to would-be enemies.

Did Trump have to be so loud and often crude in his effort to bully America back to reciprocity?

Who knows?

But it seems impossible to imagine that globalist John McCain, internationalist Barack Obama or gentlemanly Mitt Romney would ever have called Europe, NATO, Mexico, and Canada to account, or warned Iran or North Korea that tit would be met by tat.

(C) 2018 TRIBUNE CONTENT AGENCY, LLC.

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2016 Election • America • American Conservatism • Americanism • Center for American Greatness • civic culture/friendship • Conservatives • Donald Trump • Elections • Foreign Policy • GOPe • Greatness Agenda • Immigration • Political Parties • Post • The Courts • The Culture • The Left • Trade • Trump White House

NeverTrump Bait and Switch: They Hate the Ideas, Not the Man

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Michael Gerson, President George W. Bush’s head speechwriter, paid me the ultimate writer’s compliment last week: he attacked me in print. I count Michael as a friend, as I hope he does me, but in this matter I must follow Aristotle who said of his teacher, Plato, that Plato was dear to him but truth was dearer. There are three truths that Michael and others remain in denial about: Bush-style Republicanism is a minority view within the GOP; it is not the best way to create a durable center-right majority; and Trumpism is not based on “protectionism, nativism and bitter resentment of elites.”

Let’s address the last point first. This is a common view, especially on the Left. But I have been writing about these issues for nine years, and the data I have compiled and discuss in my recent book The Working Class Republican: Ronald Reagan and the Return of Blue-Collar Conservatism shows blue-collar white discontent far predates Trump. Emily Ekins of the Cato Institute also clearly demonstrated that Gerson’s assertion is not true.

Her paper, “The Five Types of Trump Voters,” shows that very few of Trump’s voters were motivated by racist concerns or nativism. Many were concerned about immigration, and the president’s proposed ban on Muslim immigration—which Michael has consistently decried as either unconstitutional, racist, or both—was the only single issue that united all four major groups of Trump backers. If Trumpism is beyond the pale, it because his voters’ concerns are beyond the pale—and those people comprise the vast supermajority of all Republican-leaning voters.

Michael surely knows this, which is why he mentions dubious or fringe figures like Joe Arpaio, Don Blankenship, and Corey Stewart as representatives of the deeper appeal of Trump’s dark nature. Of these, one recently finished a poor third in a heavily contested primary, another is running third of three in his primary race, and the other is a Senate nominee in a race devoid of serious Republican involvement. This does not strike me as evidence that the dark interpretation of Trumpism is representative of Republican views.

Tariffs and what he labels “protectionism” is indeed popular among many segments of Republican voters, but one should note that the seeds for this were laid during the Bush Administration. As I have recounted elsewhere, the Bush business cycle was the first we have data for in which median income for non-college-educated Americans declined. Federal data also show that employment rates remained below their Clinton-era record high during the Bush years even after five years of expansion. And the dramatic rise in the number of people on Social Security Disability Insurance began during the Bush years: annual applications exceeded two million for the first time during the 2001-3 recession and remained at historically-high levels for every year during the Bush Administration. Compassionate conservatism did not help working-class, native-born Americans—and its advocates know it.

An authentically compassionate conservatism should place a high priority on getting these Americans, many of whom lost their jobs or middle-class incomes because of the Bush-era immigration and trade policies, back on track. You can’t beat something with nothing, the saying goes. Yet time and time again one fails to hear that “something” from those NeverTrump Republicans who, like Gerson, vociferously oppose Trump’s tariffs. The voters did, however, hear that from Trump. That’s probably why Trump did better than Romney, McCain, and even Bush himself among voters who said the primary quality they look for in a president is that he “cares about people like me”.

These points show why Bush-era conservatism is not the way for the new Republican Party to gain its majority. Voters who are open to voting for Republicans are scared. They are scared about their economic futures. They are scared about the future a religiously orthodox family will face in an America where any expression of Biblical views on marriage might constitute a hate crime. They are scared their children will die in defense of countries who seem to think American leadership excuses them from the obligation to defend themselves. They are scared that they might die in a terrorist act at home with their leaders more concerned about the feelings of foreigners than the lives of Americans.

No Republican leader can build a majority without addressing these fears. Bush-era conservatism pretends these fears don’t exist or characterizes those who have them as beyond the political pale. As any good Texan would say, that dog won’t hunt.

A responsible compassionate conservatism would address these fears with more than pablum and pale pastels from the past. It might call for a federally-funded vocational education program and opioid addiction treatment system that focuses on employment-based rehabilitation. It might make robust defense of religious sentiments and free speech a centerpiece of its cultural agenda. It might follow Ronald Reagan’s example with Japan and place sanctions on China so long as it engages in predatory trade practices and builds its modern military with our money, our ideas, and access to our markets. It might look at how Muslim immigration has destabilized European politics and recognize that a nation fearful at home cannot be resolute abroad. What it cannot do is remain in denial that these concerns are legitimate.

It might also want to recognize that a robust defense of the working-class is also the only way to appeal to America’s growing Hispanic population, as Michael desperately wants the GOP to do. Hispanics are overwhelmingly in working-class jobs and earn below-median incomes. They also believe that more direct government spending is a better way to grow the economy than cutting taxes and spending. Today’s manufacturing worker displaced by automation or competition might be white, but tomorrow’s will likely be Hispanic, black, or Asian. Failing to focus on how government can build ladders for advancement for those who will not graduate from college is not just a failure for today; it is a failure to build the party that can appeal to the growing non-white population that will increasingly influence America.

NeverTrumpers like Michael often make Trump their focus when their real aim is the policy changes he is bringing to the Republican Party. I’ll grant that many of Trump’s statements about immigrants are odious. I too remain unconvinced that he has the skill or the character to be a good president, although I must admit to having some of those fears allayed so far. The question Republicans dismayed by Trump must ask themselves, however, is whether some of the changes he is bringing to GOP orthodoxy are either good or have their roots in legitimate concerns. I think many of them do; many, if not most, NeverTrumpers disagree. That, not Trump, is the real issue in contention, and it is on that point that those who back Trump ought to fight if their support for him is tied at all to any of those considerations.

Michael and other prominent NeverTrump Republicans face a time for choosing. The data clearly show that a return to the Republican Party and conservatism of 2000 is not possible, either within the GOP itself or in the nation at large. If the sentiments that Trump tapped into are unacceptable to them for whatever reason, then they must join forces with their former political opponents, either within the Democratic Party or by creating a new party that takes disaffected Democrats and independents into the fold. Either choice involve compromising on issues NeverTrumpers have said they hold dear, such as abortion, supply-side tax cuts, the Supreme Court, or perhaps even uncompromising support for Israel. I will not begrudge them if they depart on principle, as they are honorable men and women who must act in accord with their beliefs. But they should make that choice with eyes wide open as to what the consequences will be, for them, for their principles, and for the country they so dearly love.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit:  Justin Sullivan/Getty Images

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America • Donald Trump • Elections • Foreign Policy • Greatness Agenda • Immigration • Post • Progressivism • The Left • The Media • Trade • Trump White House

Donald Trump Wins Mexico’s Election

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The weekend winner of Mexico’s presidential election  was the leftist-populist former mayor of Mexico City, Andrés Manuel López Obrador (known popularly as AMLO). Some commentators have even suggested that AMLO’s victory is a loss for Donald Trump. But if anything, the results of this election just might have been the greatest gift from south of the border since the Trump Tower Grill’s famous taco bowl.

AMLO’s leftist rhetoric on immigration is meant to combat the more hawkish stance taken by the president. The Mexican president-elect has called for even more mass migration to the United States, and has even said that migration is a “human right.” Combine Obrador’s language with Democrats’ calls to abolish the Immigration and Customs Enforcement Service, and the Right’s rising opposition to immigration is easier to understand. Former Mexican president Vicente Fox’s incoherent anti-Trump rants will look positively sane by comparison.

The timing of AMLO’s rise also plays into Trump’s hands, coming as it does so soon after the last of the GOP’s major immigration bills failed in the House of Representatives, all but guaranteeing that the issue will not be addressed in Congress this year. At the same time, the Supreme Court’s ruling on Trump’s travel moratorium included unambiguous implications for broader immigration policy. As the Associated Press noted, the ruling not only upheld the travel restrictions on citizens of eight countries but reaffirmed that the president has “substantial power to regulate immigration.”

As the president has already hinted at the possibility of dealing with immigration as a national security issue, a potential influx of illegal aliens spurred on by AMLO’s rhetoric could be just the catalyst Trump would need to enact even more serious restrictions, thus displaying the true power of “the pen and the phone” when used on objects over which the president actually has constitutional authority.

Trump could further justify such actions as increased deportations and heavier border security by pointing out the glaring hypocrisy on display, with Mexico already enacting strict immigration crackdowns along its own southern border. If Mexico can have a wall and deport illegals, why can’t we?

The American Conservative points out a surprising number of similarities between Trump and AMLO—for better or for worse. AMLO’s victory upsets “business as usual” among the Mexican political class, as his win marks the first time in nearly a century that the presidency is held by someone outside of the two main parties. Like Trump, AMLO is a populist who is driven primarily by nationalism, vowing to put his country first ahead of foreign interests, reduce dependence on foreign goods, and boost domestic agriculture and energy production; as such, he and Trump share at least one common enemy in their opposition to NAFTA, which won’t survive much longer if it finds its only ally to be the guy who wears duck socks to global summits.

Beyond the immediate dynamic between the United States and Mexico, AMLO’s victory represents just the latest incarnation of a global trend against the political establishment. As a parallel to the “Patriot Spring” of right-wing parties rising to power all across Europe in opposition to the globalism of the European Union, this latest landslide by a left-wing outsider is also in revolt against a similar ideology—neoliberalism—that seeks to undermine national sovereignty by forcing multiple countries into unsteady alliances. AMLO at best could be described as a distant cousin of Brexit and Trump, but is still somewhat a part of this broader global phenomenon.

The election in Mexico was ultimately about Mexicans replacing an entrenched status quo and voting to reclaim their national identity against foreign interests. There are many who claim this new government will fail as well, with AMLO’s socialist policies only guaranteed to draw Mexico down the same path as Cuba and Venezuela. And that could very well be true.

But Obrador’s election may already have accomplished exactly what President Trump asked the nations of the world to do in his September 2017 address to the United Nations. Making sure that his “America First” stance did not reek of the usual hypocrisy of past presidents, Trump urged world leaders to “always put [their] countries first . . . protect their sovereignty,” and “take ownership of their future.”

America passed this test in 2016; Mexico is simply answering in its own way.

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Cultural Marxism • Democrats • Economy • Elections • Foreign Policy • Immigration • Political Parties • Post • Trade • Trump White House

Will AMLO Become ‘Bernie Sandinista’?

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Andres Manuel Lopez Obrador, Mexico’s new socialist president, promised voters to fight corruption, redistribute wealth and encourage illegal immigration to the United States.

North of the border no one is more excited than another socialist Sen. Bernie Sanders, who reportedly phoned Obrador, known as AMLO, as soon as he heard the good news. With fireworks and celebration in the background the two comrades had plenty to talk about.

 . . . Viva AMLO! . . . Viva AMLO!  . . . Viva AMLO!

Bernie Sanders: Hola, Señor Presidente! . . . Señor Presidente? . . . AMLO, can you hear me?

Ka-Boom! Pow! Ka-Blam!

Andres Manuel Lopez Obrador:  Is that you, Bernie?

BS:  Who’d you think it was, Donald Trump?

AMLO:  He’s the south end of a burro going north.

BS: Forget about him. You did it! What a great victory for socialism!

AMLO: Wait until I get to work on the economy. Free college tuition, free housing, free transportation, free food.

BS: Free food? I should have thought of that.

AMLO: Free fertilizer, too.

BS: What about collective farms?

AMLO:  Thinking about it.

BS:  I’ll have to start calling you ‘Bernie Sandinista.’

AMLO:  You led the way, mi amigo. Showed how it was possible to take on the oppressive capitalist power structure—

BS: If I hadn’t been screwed over by Hillary and her people, I’d be president, too. Can you imagine what we’d be doing right now?

Pow! Ka-Blam! Ka-Boom!!

AMLO: Having a summit conference?

BS: In Cabo, right?

AMLO:  ¡Absolutamente! Only the finest.

BS: Speaking of which, heard anything from Trump yet?

AMLO: Nada. Not even a fax.

BS: I wouldn’t hold my breath. The guy’s too busy killing us up here with all the winning. . . . Maybe he’ll have Melania give you a call.

AMLO: I hope. Melania esta muy caliente!

BS: My wife Jane can’t stand her. The woman wears new clothes every day!

AMLO: How is Jane?

BS:  She’s OK. . . . Can I ask you something—

AMLO: And how’s Chuck Schumer, Nancy Pelosi, and the rest of the no-border people?

BS: They’re all good. If we can keep Trump from building his fakakta wall, it will be just as good as no border.

. . . Viva AMLO! . . . Viva AMLO! . . . Viva AMLO!

AMLO: Get ready for 2 million, maybe 3 million Mexicanos. At least, I think they’re Mexicanos. Anyway, what difference does it make?

BS:  I loved your speech the other day when you said sneaking into the United States was a human right.

AMLO: I knew you’d like that.

BS: Like it? It’s driving Republicans crazy. Now all we have to do is register them to vote.

AMLO: We can do that here.

BS: You can?

Ka-Blam! Pow! Ka-Boom!

AMLO: You forget. This is Mexico. We have voter ID, but you don’t. Just tell me how many Democrats you need, and we’ll send them over.   

BS: And if we can get them into a couple-dozen swing states before November, Mitch McConnell will never know what hit him.

AMLO:  Anything for the cause.

BS:  Wait until Schumer hears about this. He’ll put me on the Intelligence Committee.

…Viva AMLO!… Viva AMLO! …Viva AMLO!

AMLO: Bernie, I’ve got to get back to the fiesta.

BS:  I know. I can hear it. There’s just something I wanted to ask—

AMLO:  Don’t worry. You’re invited to the inauguration. The entertainment will be fantastico. Ricky Martin, J. Lo . . . Erik Estrada will be the MC.

BS: Sounds great—

AMLO: . . . George Lopez, maybe even Cher.

BS: Jane and I will be there for sure. But what I wanted to ask –

AMLO:  VIP transfer from the airport? No problem.

BS: That’s nice, but—

AMLO: Fruit basket in your room? You got it.

BS: Actually, Jane has a sensitive stomach.  

AMLO: Bernie, what is it? I have to go.

BS: Remember talking about Cabo? Think Jane and I can get comped on a condo after the swearing in? Maybe something with an ocean view.  

Photo credit: PEDRO PARDO/AFP/Getty Images

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America • China • Defense of the West • Donald Trump • Foreign Policy • military • NATO • North Korea • Obama • Post • Progressivism • the Presidency • Trade

Trump’s ‘Deplorable’ Diplomacy

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Liberals see Donald Trump as the embodiment of toxic masculinity. Trump’s voters see a real man.

My husband jokes that in our family, if anything is dead, bites or is on fire, it’s his job. North Korea was beginning to approach the “bites” and “is on fire” category.

It took a year of intense economic and military and psychological pressure to bring Kim Jong-un to the negotiating table in Singapore. Trump’s critics tried to spin the initial meeting as a diplomatic disaster.

U.S. Secretary of State Mike Pompeo will arrive in Pyongyang this week to kick off the negotiations. Satellite images show that North Korea is expanding missile production, so the Washington Post is calling the entire diplomatic effort a “sham” before actual negotiations have begun.

Trump’s critics are going to fall on their faces with North Korea, as with their other predictions of doom. They underestimate Trump time and again because his strengths are invisible to them.

The United States does not have to blink at threats from a squirt like Kim Jong-un. Our experts don’t know this. Trump does.

When Kim tried some last-minute bluster before Singapore, Trump canceled the summit. Setting clear lines is not a setback, it is a key to success. Trump was defining the relationship. Kim cannot make threats. We can. Trump was his usual blunt self: “You talk about your nuclear capabilities, but ours are so massive and powerful that I pray to God they will never have to be used.”

Force of Commitment
It’s easy to point to Trump’s character flaws. His virtues are discounted by liberals who adore the Ivy League finishing school polish of Barack Obama. They never noticed the small, aggrieved, lying politician inside the fancy suit.

Trump wears big, ill-fitting suits by choice. He does what he likes. He does not tailor himself to suit others.

Trump’s critics do not understand the force of the president’s commitment to protect and defend America. His voters do. It is an essential, common sense, manly, American virtue—men protect their families. Men take care of danger.

It seems a big leap from New York real estate to international diplomacy. It is not. Being a confident, tough, aggressive man is essential in dealing with dangerous pipsqueaks like ISIS and North Korea.

The victory over ISIS came first and so fast that the partisan press had little trouble ignoring Trump’s achievement. After years of Obama flapping his hands and disastrously inviting Russia into the Middle East to do the job for us, ISIS was out of Syria. ISIS was in our weekly headlines, and then it was gone. No success here, move along.

Trump focuses on his goals, like any good businessman, not on his re-election prospects, as politicians do. His job as president is to protect the nation’s security and advance American prosperity. North Korea will not be a nuclear power, period. It’s too dangerous to let a rogue country, run like a slave-labor camp with a half-mad ruler, have nuclear missiles. Add in the fact that Kim is already selling military technology to Iran, and the task is beyond urgent. Trump sees that Kim is a dangerous weirdo murderer better than anyone. That is why he decided Kim must “denuke.”

His critics predict the same old diplomatic collapse when North Korea blusters and cheats. They think Trump is an idiot and can’t handle a Kim Jong-un. They think Trump’s aggression is out of control, even insane and destructive.

But then, they think all healthy masculinity is destructive.

“Don’t Mess With the Messer”
His voters believe Trump will win in Korea because they think the same way. Diplomats see complexity. Trump sees simplicity. A nuclear North Korea is dangerous to the United States. North Korea is small and weak. We are strong. It is protected by China, but China is no match for America either.

What is impressive is how Trump communicated the force of his decision to disarm North Korea to China and to Kim Jong-un. It took a year of strategic, multifaceted diplomacy and intimidation.

China has been buying off and manipulating our politicians for decades. Trump can’t be bought, and he does the manipulating himself. As the old Willie Dixon song goes, “Don’t mess with the messer, the messer gonna mess with you.”

Real estate tycoons like Trump win through intimidation. They are masters at that game. Trump isn’t intimidated by anybody. Not by business rivals, political rivals, lying journalists, not by rogue FBI agents. He is not intimidated by China, and certainly not by Kim Jong-un. Intimidation is what Trump does. It is a game he enjoys as a master.

Trump wants to upset the status quo with China. Trump puts the American worker, his voters, first. The powerful economic interests who profit from China’s predatory trade practices are less than nothing to him. He wants to win the existing trade war with China, the one that the United States has been losing for more than two decades. Accommodating to China is over.

War If Need Be
Politicians play things safe by doing what has been done before, solutions be damned. Trump the builder likes to get things done. It is not in him to follow Obama’s politically safe, irresponsible, do-nothing footsteps and call that “peace.”

North Korea could thumb its nose at us because it was protected by China. When Trump put China on notice he was going to war with them—a trade war, that is—calculations changed. Encouraging Kim’s bellicosity was no longer to their advantage. China shortened Kim’s leash.

The messages continued all year. Trump became more and more menacing. That ranged from bombing Syria during dinner with the Chinese premier, to mockery, to military exercises in the Pacific. This was not a phony Twitter war, it was geopolitics at the highest level. It is almost exactly a year since Trump sent the third carrier battle group into the western Pacific. It is said that when the United States sends one or two carriers, it is a show of strength. Sending out a third carrier means war. China and Kim got the message.

Asserting Power in Our Self-Interest
Why is Trump’s pragmatic, forceful, classic carrot-and-stick approach so difficult to grasp for our foreign policy experts and pusillanimous politicians? Because the solution requires character traits they don’t have. Masculine traits Trump and his supporters have in abundance—not accepting bullshit, not caring what other people think, not being afraid of a fight.

That is why his voters are sure North Korea is not going to be the dangerously useless diplomacy we have had since Clinton. Trump and his voters share a common outlook about getting the job done, no matter if it is dirty or difficult. Don’t over-complicate things, and don’t shirk your duty. Just do the job.

China and North Korea and Trump’s critics are getting to experience how a tough man goes to work. This is how a responsible president deals with a small but rabid country threatening the safety of our own nation.

President Trump understands we are a powerful country. He knows how to assert American power in our self-interest.

He is on the job.

Photo credit: Saul Loeb/AFP/Getty Images

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2016 Election • Defense of the West • Donald Trump • EU • Europe • Greatness Agenda • Hillary Clinton • Identity Politics • Immigration • Political Parties • Post • Progressivism • self-government • The Culture • The Left • The Resistance (Snicker) • Trade

Hillary and Brexit

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Scientists are so smart these days they can tell how someone voted in the 2016 Brexit referendum by asking how they like their steak prepared.

Those who voted to Remain prefer their sirloin cooked “medium-rare.” Brexiteers like theirs charred. Some of these culinary arsonists also insist on slatherings of ketchup. Like President Trump.

Leave voters are also more conscientious and emotionally stable than Remainers. Given the last two years of roiling histrionics, the wailing, the demands for another vote, the nastiness, the sneering, this caveat is impervious to dispute.

But the mewling continues incessantly. Brexiteers—17.4 million of them—got it wrong. They “didn’t know what they were voting for,” whirr the self-satisfied soy polloi. They’re still not over it. Or reconciled to the fact Donald Trump sits gleefully in the White House.

Of course, his vanquished opponent hasn’t quite stumbled upon the acceptance stage of the Kübler-Ross grief cycle.

Hillary Clinton lectured at the University of Oxford this week. Though admirably resisting a narcotic temptation to attack the president, Hillary did manage to slither a little Brexit-bashing past her teeth.

“Today in the UK, where nearly three quarters of 18- to 24-year-olds voted to remain in the European Union, one has to ask: could more have done the same, enough to turn the tide?” she told the Sheldonian Theatre audience. “Because after the vote, young people spoke out expressing fear, disgust and a feeling of being let down by the older generations.”

Perhaps they did. But they weren’t so bothered until the likes racked up on their Remain-framed profile pictures. At least one-third didn’t vote.

Hillary, of course, didn’t explore why a majority voted to leave the EU. Nor why similarly minded movements are sweeping the power centres of Europe. If she did, Clinton would realize she and her ilk’s bankrupt politics fueled the great upheaval they so testily deplore.

Perhaps Brexit stokes such animation because permanent political victories are rare. A referendum is do or die. But Remainers did this to themselves. Rejecting all compromise with the majority, the allegedly progressive and forward-thinking reverted into a feudalistic public-shaming of those who think they should govern themselves.

Take Richard Dawkins, of off-brand atheism and blue-ticked Twitter boorishness. Dawkins marched across London’s Pall Mall last weekend alongside a fancifully claimed 100,000-strong throng of Remainers demanding a “People’s Vote” on the final Brexit deal.

Of course, even more luridly galling than prefixing the populist “People” before a vote to run roughshod over said people, was Dawkins’ characteristically sneering tweet:

The decent half of Britain. That sums it up nicely. Those driven utterly barmy by what is actually a fairly rudimentary concept of democracy, have lathered into delirium.

Half a million people have joined the dole queue; each British household is worse off by £4,300 ($5,674). We are mulching under the molars of a biting recession, while the banks and blue-chippers have fled for Paris. The Scottish have deserted Great Britain, breaking a 311-year marriage. There’s no food left; no medicine. And war rages across Europe.

Of course, none of the above has actually happened. But the Ultra-Remain expert class predicted all of this and worse ahead of June 2016’s sulphurous referendum. Yes, those “decent” people to whom Dawkins extends his ebullient grace.

Despite the narrative not congealing with reality, such bloodless musings have become social media currency among the virtuous class.

In private, they’re not so confident. “Why are they like this?” they ask mutedly gleeful and note-riffling therapists. “Why can’t I just get over it?” they cry. The problem lies with them. Rather than confront head-on the troubling revelation that one’s worldview isn’t as secure as one thought, cognitive dissonance offers a warming palliative.

A comfort blanket. Hence why liberals resort to canned tropes like Hillary Clinton’s popular vote “win.”

It’s also why Remainers often question the validity of the Brexit vote, insisting it was merely “advisory,” before calling for a People’s Vote—deeming that legitimate—provided the “correct” answer is delivered.

Because that is what all this is really about. The wrong people had a say. The rubes dared pelt the bovarists with their own farmers-market avocados. And won. Victory eluded people like us.

And they are correct. Most people aren’t like them. A study released just months after Brexit found Britons occupied themselves within eight tribes of differing political views.

Unsurprisingly to those fortunate enough to dwell outside of progressive London, half of all polled found themselves firmly on the right, lapping happily within the “Common Sense,” and the “Our Britain” tribes. Researchers deemed this lot to hold “traditionally conservative views” imbued with Euroskeptic principles and a desire for strong controls on immigration.

That study also radiated the numerical paltriness of those with the pro-EU, open-borders, internationalist worldview espoused in blanket fashion by our cultural and economic elites. This tribe, “New Britain,” secured just six percent of the entire country.

Other Remain-minded tribes, like the “Progressives” (11 percent), “Community” (5 percent), and “Democratic Socialists” (8 percent) made up less than a quarter of all Britons.

This cultural apartheid underlines the twilight of our elites, in Great Britain and the United States. It explains why our newspapers and television screens are teeming with political opinions beggared of main street sensibility.

But, like Democrats still burned by President Trump’s election, Remainers will probably never understand why they lost. Or why they continue to lose. How they like a steak is the least of their worries.

Photo credit:  Steve Parsons/PA Images via Getty Images

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America • Americanism • Economy • EU • Greatness Agenda • Post • the Presidency • Trade • Trump White House

Harley-Davidson’s Big, Fat Mistake

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Harley-Davidson on Monday announced that it would move production for its European customers overseas, in order to avoid the European Union’s (EU) new import duties. President Trump slammed the move and accused the company of raising the “white flag” of economic surrender on Twitter.

Trump is right. Harley-Davidson’s decision is perhaps the most incompetent public relations blunder since Starbucks said it would replace 10,000 American workers with Syrian refugees—no doubt they will pay a heavy price.

In the meantime, Harley’s loss is our gain, as every individual failure makes the whole stronger.

A Bittersweet Vindication
Before beginning, let’s get some preliminary facts straight. In 2017, Harley-Davidson sold around 40,000 new motorcycles in Europe. And although Europe is Harley’s second largest market, it still accounts for a mere 16 percent of the company’s global sales—Harley is an American company with a predominantly American market. Furthermore, Harleys are (mostly) American-made.

Regarding the tariffs: on June 22 the EU’s new 25 percent import duties came into effect. These were levied in response to President Trump’s own tariffs—apparently, the EU forgot it already imposes significant tariffs, and other nonmonetary import restrictions, on American goods.

Harley estimates that these tariffs will raise the price of their European bikes by an average of $2,200. Assuming that this will hurt their sales, they announced that they will offshore a fraction of their production to Europe—not their entire production-base, as some distortion-artists claim. Now that we’re all on the same page, let’s proceed.

The first point worth mentioning is obvious: Harley’s announcement proves tariffs work. By raising the cost of importing American motorcycles, EU tariffs created a powerful incentive for Harley-Davidson to invest in Europe. They responded to this incentive. Now Europe will have its own slice of Harley’s pie—and benefit from the capital investment, jobs, and technical know-how that Harley will bring with them. Imagine that.

Of course, the free trade brigade will doubtlessly rant about how Trump’s “trade war” harmed America by driving Harley-Davidson abroad. In this instance, I’d agree. Wars have casualties—even trade wars. But let’s not miss the forest for the trees: Trump’s tariffs will benefit far more American companies than they hurt, and will thereby create more jobs than they destroy.

There are two reasons for this. First, because labor-intensive (or what sophists term “inefficient”) jobs are the first to move offshore, international trade necessarily destroys more jobs than it creates. For example, a 2014 study by Robert Scott found that the North American Free Trade Agreement (NAFTA) displaced a net 851,700 American jobs—the exact opposite of what Bill Clinton claimed.

Note: this paradigm is reversed when America freely trades with higher-cost jurisdictions, like Europe. The only reason European industries are not pouring into America (like ours pour into China) is because of Europe’s tariff wall. Were Europe to adopt an American-style trade regime, they would deindustrialize within a decade.

The second reason that Trump’s tariffs will create more jobs than they will destroy is that America is a net importer (this is reflected in America’s large, chronic trade deficit). Thus, far more American production is displaced abroad than vice versa. Further, America has a trade deficit in advanced industries—those technology-generating sectors that drive long-run economic growth. Repatriating these industries alone would make Trump’s tariffs worth it.

Short-Term Gain, Long-Term Pain
Harley-Davidson made a spectacular error in announcing their intention to offshore a portion of their production to Europe. That this is a mistake should be prima facie obvious to anyone with a lick of common sense—but perhaps it’s not obvious to the alumni of the Harvard School of Business or the Chicago School of Economics who seem to keep screwing up in the same way. So let me lay it out for their benefit:

Europeans don’t buy Harley’s because they want a cost-effective, fuel-efficient means of transportation to take them safely (read: blandly) from point-A to point-B—they want a hog. Harley’s aren’t just bikes. They embody American muscle, sweat, and steel.

They’re strong. Loud. Bold.

They’re a classic piece of Americana.

Frankly, Europeans don’t really care about the price. After all, they’re not buying a bike—they’re buying a brand. Harley’s are status symbols, just like Gucci bags or Lamborghinis. An extra $2,200 per bike isn’t going to turn away droves of customers. It’s going to make Harleys even more exclusive, and possibly more profitable.

Harley should embrace the opportunity Trump gave them: don’t settle to be Europe’s mass-market motorcycle producer. Be something greater. Be a luxury—if Europeans want Harleys, make them pay.

By relocating to Europe, Harley is simply ticking off their loyal (overwhelmingly Trump-supporting) customers. In the end, they stand to lose more American business than they’ll gain in Europe. After all, how many limp-wristed Democrats buy hogs?

Photo credit:  Drew Angerer/Getty Images

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America • Department of Homeland Security • Donald Trump • Economy • Foreign Policy • Government Reform • Greatness Agenda • Immigration • Post • taxes • Technology • The Left • Trade

Remittances: Illegal Immigration’s $30 Billion ‘Hidden Tax’

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Paris. The year is 1788. The air is heavy with the scent of impending revolution. Some praise the king in hushed whispers, others shout “Liberté! Egalité! Fraternité!” in the streets. Either way, the time for talk is over. How did it get to this point?

The hopeful specter of radical liberalism played its part, as the father of modern conservatism Edmund Burke observes in his masterpiece Reflections on the Revolution in France. But most men aren’t dreamers. Most live parochial lives and think parochial thoughts—there’s no time to dream when you’re working to put bread on the table.

For the average Parisian, the revolution was about bread: why should they starve while the king eats his fill? Necessarily tied to this was a broader question: why should Parisians pay exorbitant taxes so that the king can live like, well, a king? This is a good question, one which the French answered (regrettably) with blood.

As bad as the Parisian tax regime was, at least everyone knew they were getting taxed. Nowadays, many of our biggest taxes are hidden, disguised as “user fees” or “mandatory contributions.” Think Obamacare or Social Security contributions. Likewise, at least money collected in Paris tended to stay in France, employing French harlots and French maestros. It could have been worse.

Imagine how mad the French would have been if their taxes flowed instead into the Russian Czar’s Winter Palace, employing Russian harlots and Russian maestros. In the end, paying domestic taxes is always preferable than paying tribute to a foreign land.

Redistribution is bad, elimination is worse.

Therein lies one of illegal immigration’s biggest, yet routinely ignored, problems: illegal aliens hop the border, work (often without paying taxes), and send a large chunk of their earnings back home via remittances. Basically, remittances are a hidden tax Americans pay for the privilege of hiring artificially cheap illegal labor—and it adds up. In fact, illegal immigrants may remit around $30 billion annually.

Finding the Right Ballpark
To be clear, it’s impossible to know exactly how much money illegal immigrants remit annually. There are three reasons for this. First, we don’t know how many illegal immigrants actually reside in America. Second, the term remittance itself is ambiguous: should we include money stuffed in a birthday card in our calculations? Third, we cannot track the location of every dollar even if we wanted to (if we could, black markets wouldn’t exist).

Nevertheless, I think we can apply a set of reasonable assumptions to a reasonable dataset, and reach a reasonable conclusion as to just how much money illegal aliens remit annually—although we cannot hit a home run, we can at least bat in the right ballpark. Let’s step up to the plate.

First, assume that all of America’s remittance outflows are either sent by first-generation legal immigrants or illegal aliens. Next, assume that these two groups send equal amounts of money home per person. Although legal immigrants earn more per capita, they likely send a much smaller proportion of their pay abroad (if they send any at all). I think these are fair assumptions.

Now, let’s apply those assumptions to the numbers. According to Pew Research’s 2018 remittance outflow data, America lost $138.2 billion in remittances in 2016. And given that there are some 40 million first-generation immigrants, and (at least) 11.1 million illegal aliens, this means that there are roughly 51.1 million people sending remittances abroad.

Of course, the number of aliens is debatable: a recent study from Yale University found that there were at least 22.8 million illegals residing in America. That being said, let’s go with the low number for the sake of argument.

Dividing the total remittance outflows by immigrant proportions reveals that illegal aliens likely remit some $30 billion per year. That’s a lot of money. For context, it’s as much as the entire annual GDP of Vermont. And of course, the figure would be higher if we used Yale’s population estimates.

But it’s not just about the money—it’s what’s happening to it. Remember when I said earlier that no matter how bad Paris’s taxes were, at least the money paid for French (rather than Russian) harlots and maestros? Remittances are worse. Every dollar remitted by illegal aliens is a dollar ejected from the local economy, never to recirculate or be reinvested—it goes directly to Russia, or more likely Mexico, China, and Guatemala. This reduces the velocity of money and causes liquidity problems, particularly in small towns.

Functionally, there’s little difference between remittances and federal taxes: taxes skimmed from small towns pools in Washington D.C., while remittances sent by aliens line Carlos Slim’s pockets. It’s that simple. And yet allegedly anti-tax organizations like the Cato Institute routinely argue in favor of open borders, not seeming to grasp the necessary implications.

It’s time we stopped speaking in jargon. Let’s call out remittances sent by illegal aliens for what they actually are: a tax.

Photo credit: Don Bartletti/Los Angeles Times via Getty Images

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America • Americanism • Asia • China • Donald Trump • Economy • EU • Europe • Foreign Policy • Germany • Post • The Media • Trade

Trump is Right: G7 Needs a Wake-Up Call on Trade

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The recent meeting of the G7 leaders in La Malbaie, Quebec ended dramatically, with Canadian Prime Minister Justin Trudeau harshly criticizing U.S. tariffs on steel and aluminum and threatening to retaliate. President Trump then instructed U.S. negotiators not to sign the communique that group members issued at the conclusion of the summit.

Predictably, global elitists have reacted with the usual horror, and expressed their customary disdain for Trump. According to the New York Times, we are witnessing a “slow-rolling collapse” of our “fragile alliances.” Trump is frivolously up-ending the global order, we are told, and alienating countries that traditionally have been our closest friends and partners. The talking heads may have backed off on their threats of apocalyptic “trade wars” (perhaps because strong economic growth rates and the ongoing buoyancy of the stock market make their predictions of doom seem laughable), but they are still clutching at the idea that we are witnessing a “fundamental” shift in the prestige and influence of the United States, and a steady worsening of our relationships with almost all civilized countries. There is even talk that the G7 has become the “G6+1” as America goes it alone.

The problem is these arguments are entirely self-serving, insofar as the global elite always chafes at the effrontery of populists like President Trump, and it invariably seeks to defend its own privileges and prerogatives by labeling all criticism of the established international economic order “protectionist” or “isolationist.” In fact, seldom do the elitists even bother to address the substantive complaints made by Trump (and others like him) about the unfairness of existing trade dealsthey simply wag their collective finger at anyone boorish enough to question the present regime of “free trade.”

Trading relationships should be susceptible to criticism and revision, however, and when the people of a sovereign state vote to empower a new leader who embodies such criticism and reformist zeal, his election should have consequences. The elite talks as if the vicissitudes of something as shabby as democracy should be divorced from our sacred trade agreements. Nonsense!

Turns out, G7 members are targeting their retaliatory tariffs against U.S. industries and enterprises concentrated in states that voted for Donald Trump. In other words, they seek to manipulate democracy itself and foster political headaches for those who dare to question the world order. So much for Russians trying to influence our elections. In reality, we have more to worry about from the French and the Canadians! This is simply outrageous, and it ought to raise the hackles of any American patriot.

Doing a Service
The idea that President Trump is doing permanent damage to our relations with our traditional allies flies in the face of the mountain of evidence that Trump has formed productive, respectful working relationships with numerous world leaders, from President Emmanuel Macron of France to Prime Minister Shinzo Abe of Japan. Moreover, we should keep in mind that our ties with other powerful, wealthy nations are always troubled by tensions and disagreements, and, in the post-World War II era as a whole, many of these differences of opinion have been far more serious and dangerous than the current spat over trade barriers. Lest we forget, Messrs. Trump and Trudeau are duking it out largely over the price of milk. It seems unlikely that U.S.-Canada relations will be scarred permanently by so trivial a dispute.

Lastly, the critique of Trump’s performance at the G7 summit is misplaced because Trump is actually doing both the American people and the citizens of all the G7 nations a great service: he is drawing attention to the deficiencies of past trade agreements—deficiencies that have in many cases cost jobs, shuttered factories, and abetted many a populist backlash against elitist economic manipulation. Trump does so not because he wishes to curtail trade, but in order to build it on a sounder basis. Trump has made it abundantly clear that he supports free trade, but not biased trade deals that require openness on the part of some and allow tariff and non-tariff barriers for others.

How About Real Free Trade?
The truth is that the leaders of the international economic order have long lived a lie: they pantomime unfailing devotion to “free trade,” while at the same time overtly and covertly carving out exceptions for their preferred industries. The result is a half-hearted form of free trade that rewards sly negotiation and punishes naïve idealism. As Trump suggests, all too often it is the United States that has been the most naïve, accepting a trading regime that imposes massive trade deficits and costs millions of jobs.

In 2014, the United States had a $142 billion trade deficit with the countries of the European Union, and a $35 billion deficit with Canada. Essentially no one believes that this is because American companies can’t compete with their overseas rivals—it is instead manipulative, predatory trade practices that explain the imbalance. Why, then, should the United States not try to re-balance this equation in its own interests?

More broadly, though, will it not benefit all the nations concerned if we find a new formula for trade that limits job losses and de-industrialization, and that finds favor with voters anxious about their economic futures?

To achieve such a trading rapprochement, the United States even should be willing to make concessions of its own. After all, we too are sometimes guilty of using subsidies and non-tariff barriers to insulate our industries from foreign competition. If G7 countries believe their own rhetoric about free trade, surely they will be willing to meet us halfway and cooperate in the elimination of surviving trade barriers . . . unless, that is, they prefer to thumb their noses at Donald Trump on principle. Some principle, though!

The Choice Before the Globalists
In the end, for seeking the amelioration of a broken trading system, Trump should not be seen as an enemy of the established order, but rather as its would-be savior. His suggestion to his fellow leaders in Quebec that ideally he would like to see the elimination of all tariffs throughout the G7 economies is a testament to his dedication to the principle of free trade, and his belief in the transformative power of capitalist competition and development. The fact that Trump is clear-eyed about the pressing need for reform in our trading relationships makes him a realist, yes, but not the protectionist boogeyman that the mainstream media, and its international fellow-travelers, portray.

The truth is that the global economic elite faces a choice: take Trump (and the tens of millions of voters he represents) seriously, and repair and refit the damaged infrastructure of “free trade,” or mock and ignore him, ensuring that the wave of economic resentment and protectionist sentiment that seemingly has been cresting for years now will build into a true tsunami.

In that case, the global bigwigs may someday look back and say, “Donald Trump? He was the least of our problems.”

Photo credit: China News Service/VCG via Getty Images

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America • China • Donald Trump • Economy • EU • Europe • Foreign Policy • GOPe • Libertarians • Post • Trade

No, Tariffs Are Not ‘Domestic Sanctions’

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The Democratic People’s Republic of Korea (North Korea) is not democratic—it’s barely even a republic. The same goes for the Democratic Republic of the Congo, and the Lao People’s Democratic Republic (Laos).

In fact, if a country includes democratic in its name, you can safely assume that it’s not democratic. This is a classic example of, what I like to call, the wisdom of irony: things are often not what they claim to be, and the more they claim, the less they are.

Consider Reason Magazine. In a recent piece, columnist A. Barton Hinkle argues that tariffs are sanctions, since both limit imports into nations. Basically, Hinkle’s argument rests on the classic logical principle: “if it looks like a duck, it’s a duck.” Unfortunately, Hinkle’s conclusion is fundamentally unreasonable. As always, the Devil’s in the details—details which he conveniently ignores.

Strength Through Adversity
Hinkle begins with a hubristic bang:

No one would ever accuse Donald Trump of meticulous adherence to the rules of formal logic. But even the president ought to realize the strongest argument against Trump’s tariffs on American imports has been made by Trump himself.

Trump’s implied “argument” runs as follows: both sanctions and tariffs restrict imports to the targeted nation. Therefore, since sanctions harm foreign nations (like Iran), then tariffs should likewise harm America. Basically, Hinkle thinks sanctions are tariffs, and tariffs are sanctions.

Hinkle then brands yours truly as one of “Trump’s cheerleaders” for making the rather obvious point that technology drives economic growth, and moving technology-generating industries abroad will slow domestic economic growth. This point is axiomatic and not open to debate. I suspect this is why Hinkle avoids addressing my argument entirely, and instead turns to sophistry, reframing the debate by conflating sanctions and tariffs.

Hinkle’s first mistake is to assume that sanctions cause harm. Often, they don’t. Instead, minor sanctions routinely trigger hormetic responses, causing economic growth. This is because the economy is an organic system, which benefits from stress (to a point) due to the principle of overcompensation. Just as muscles get stronger in response to the stress of lifting weights, or forests grow lusher in the wake of forest fires, economies get more productive when times get tough (but not too tough).

For example, Great Britain’s Industrial Revolution would likely have been stillborn if not for the French Revolution and Napoleonic Wars. Were it not for the labor shortage caused by war, there would have been far less demand for the productivity-boosting machinery that created the modern world. Likewise, Napoleon’s blockade of the British Isle forced Britain to become economically independent, rather than relying on imports from the Netherlands and Hanseatic States. This greatly diversified Britain’s economy and opened up additional development paths. Were it not for these stressors, steam technology could have been abandoned in favor of human labor—just as it was in Ancient Greece, Rome, and China.

Of course, sanctions can also be damaging—but only when the damage they cause exceeds the economy’s ability to (over)compensate. Consider Britain’s blockade of the German Empire in World War I. Perhaps the chief reason Germany lost was that it lacked rubber (most of which came from Anglo-French Siam). Without rubber, the Germans couldn’t build conveyor belts, many vital industrial components, and—most importantly—tires. No rubber, no industry.

There are two lessons here. First, Britain’s rubber sanctions worked only because Germany’s economy was unable to compensate fast enough. Second, Germany’s economy did compensate to some degree: the Germans invented a way to make synthetic rubber. Although this technology did not arrive in time to save Germany’s immediate war effort, it did make them immune to Britain’s rubber blockade in World War II. Overcompensation did occur, and it did make Germany stronger in the long run. So did Britain’s rubber sanctions work? Yes and no: it depends on the time-horizon.

My point here is that when debating, never accept your opponent’s presumptions without careful consideration. Hinkle’s argument only makes sense if you agree that sanctions are always bad for the sanctioned—this isn’t true. Sanctions only produce harm past a certain tipping point, otherwise they tend to stimulate economic growth. This same logic applies to tariffs.

There is wisdom in the Old English proverb: necessity is the mother of invention.

A Dam is Not a Wall
Let’s assume that everything I’ve said until now is false and that when America imposes sanctions they always harm our opponents. Would this vindicate Hinkle? No.

Long run economic growth depends upon technological growth—not free trade, not immigration, not low taxes, etc. Technology is the only factor that matters: it’s what separates the West from the rest, and ourselves from our ancestors (economically speaking). Understanding this is the key to understanding why tariffs won’t hurt America in the same way sanctions hurt Iran.

America invents technology and generates knowledge—America is at the cutting-edge of science. This is good, because it means we reap the lion’s share of profits from new discoveries, while everyone else plays catch-up. So long as America stays at the cutting-edge, we will remain the world’s richest nation.

However, many of America’s most advanced industries are currently moving abroad to save money. After all, labor is cheaper in India, and China’s government provides generous subsidies for American firms to relocate. This is a problem, because it decreases the likelihood that the next paradigm-shifting technology will be invented in America. By increasing import costs, tariffs prevent American companies from leaving, thus “locking-in” our advantage.

Tariffs are best viewed as a dam, keeping America’s economic advantage from flowing away.

On the other hand, sanctions are best viewed as a wall, preventing American technology from flowing into less advanced nations. Take Cuba, for example. Cuba is a technological backwater—something like a poverty-stricken 1950s movie set. Since they cannot generate their own new technology, they rely on imported technology. No imports, no economic growth. The same thing applies to Iran (to a lesser degree).

Hinkle and the rest of the free trade brigade fail to recognize this rather obvious asymmetry: Cuba needs America, but America does not need Cuba. Thus, American sanctions will harm Cuba, but American tariffs on Cuban goods will not harm America. It’s a one-way street. In fact, tariffs will actually benefit America’s economy by providing a minor stressor that triggers a hormetic response and discourages America’s advanced industries from offshoring.

That Hinkle and the editors at Reason would unreasonably confuse tariffs with sanctions is not surprising—after all, there is a wisdom in irony.

Photo credit: iStock/Getty Images

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Economy • Germany • History • political philosophy • Post • taxes • The Left • Trade

Karl Marx, Free Trader

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What do David Ricardo, Ben Shapiro, and Karl Marx have in common? They’re all free traders.

No, this is not a tongue-in-cheek jab designed to smear Ricardo or Marx. I’m serious. Karl Marx—the father of Communism, and intellectual progenitor of the horror-show that is postmodern relativism—was a free trader. Why?

Marx believed that international free trade, or perhaps more accurately, Ricardian economic globalization, would pave the way for a glorious proletarian revolution. Specifically, Marx thought that free trade would increase wealth inequality and reduce wages for the majority of people, and that this tension inevitably would lead to conflict.

While I hate to admit it, Marx is broadly right on this point. International free trade has indeed increased wealth inequality and reduced wages for the majority of Americans. In fact, the median American household was richer in the 1980s than today (better technology aside). Part of this is explained by the recent influx of low-wage immigrants and decreasing household sizes—but even so, globalization remains the single largest contributing factor.

Likewise, Marx was correct that increasing inequality degrades social cohesion, setting the stage for violence and revolution. As it turns out, people are not hyper-rational automatons like economists assume: jealousy is real, and most people would rather lose money than see someone else get rich relative to them, even if they would themselves get (slightly) richer.

A Tale of Two Speeches
The primary historical documents showing that Marx supported international free trade are two renderings of a speech he delivered to the Democratic Association of Brussels in 1848—ironically, the “Year of Revolutions.” Although the two versions make basically the same point, they are distinct enough to warrant separate investigations.

The first rendering was published in German by Joseph Weydemeyer, a friend of Marx and Friedrich Engels. This version is probably the more historically accurate and is traditionally appended to The Poverty of Philosophy, which was first published in 1885.

After speaking at length about the injustices of capitalism (to be expected), Marx turns to the question of free trade. He argues in favor of international free trade because he believes it will exacerbate the “antagonism between industrial capitalists and wage workers.” This antagonism (manifested in growing economic inequality) will hasten the worker’s revolution and the final installation of a communist utopia.

Basically, Marx thinks things must get worse before they get better—and free trade will make them worse.

This is consistent with Marx’s teleological (goal-oriented) understanding of history. Marx sees history as a series of clashes between the rich and poor, and each clash brings us closer to the end of history—a communist utopia where such distinctions are erased. For example, ancient Greco-Roman slavery, medieval feudalism, and modern capitalism are all just different versions of this underlying conflict, and each is a necessary step towards Communism. For Marx, history is not simply a chain of causality dangling in empty space: it’s a bridge to a known destination, and this bridge is built by revolution. This teleology is why Marxists are so keen to sow discord whenever possible—conflict is a means to an end.

But it’s not just about economics. Marx sums up his case for free trade with the following passage:

. . .in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade systems hastens social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.

The key phrase here is “breaks up old nationalities.” Remember, Marx does not see Communism as simply an economic system—it’s an entirely new social, political, and economic order that must be wrought on a global scale. Communism is all or nothing. Thus, nationalism is a major roadblock because it unifies and divides people on a dimension other than wealth. In the end, there can be no proletarian revolution unless people see themselves as proletariats—not as Englishmen or Americans—first.

On the whole, this speech reveals that Marx supports global free trade for two reasons. First, by increasing inequality is sows the seeds of revolution. Second, economic integration undermines nationalism and replaces it with a global (proletarian) culture.

Flesh on the Bone
The second version of Marx’s speech on trade (this time from 1847) was published by his friend and patron Engels in The Northern Star, a British journal. What makes this (otherwise inferior) version of the speech interesting is that it contains a direct refutation of David Ricardo’s theory of comparative advantage.

The theory of comparative advantage states that countries should trade things they are relatively good at making in exchange for things they relatively bad at making—even if they are better at making all things in absolute terms. This ensures that labor is divided efficiently, and thus the maximum number of things are made. While comparative advantage sounds good on paper, the theory (like so many other academic speculations) collapses when applied to the real world.

Marx’s refutation turns Ricardo against himself. To begin, Marx assumes that comparative advantage works as Ricardo describes. Next, he states, “labour is a commodity as well as any other commodity.” That is, the price of labor is subject to the law of supply and demand—just like the price of apples or oil. Finally, Marx puts two-and-two together:

We accept everything that has been said of the advantages of Free Trade. The powers of production will increase, the tax imposed upon the country by protective duties will disappear, all commodities will be sold at a cheaper price. And what, again, says Ricardo? “That labour being equally a commodity, will equally sell at a cheaper price”—that you will have it for very little money indeed, just as you will have pepper and salt.

Essentially: if free trade decreases the price of goods, it will also decrease the price of labor. But if this is true, then who actually benefits from free trade? After all, costs are always measured relative to income—if the price of bread halves, but so does your wage, you’re no better off than if nothing changed.

To his credit, Ricardo was actually aware of this problem and proposed that capital immobility would prevent the hypothesized collapse of labor prices. However, in today’s world (and, to some degree, Marx’s), capital is mobile, and therefore comparative advantage doesn’t work. This is one of the rare occasions that Marx was right.

A Hill to Die On
Milton Friedman and Karl Marx both support free trade but for very different reasons. In his book Free to Choose, Friedman argues vociferously that free trade is the key to enriching everyone. Meanwhile, Marx supports free trade for precisely the opposite reason: free trade impoverishes people so badly that they’d rather fight and die in a bloody revolution than live with its consequences.

Who’s right?

As usual, the truth lies somewhere in between. There is no doubt that America has benefited from elements of economic globalization. For example, everyone likes buying fresh strawberries year-round. Likewise, many American industries undoubtedly profit from higher trade volumes—primarily American exporters and financial markets.

The problem is that not everyone benefits. In fact, the vast majority of Americans have seen their wages stagnate—real median wages actually peaked in 1973—and their quality of life deteriorate (better technology aside). Likewise, large swaths of the nation have been turned into ruined, rusting husks, a consequence of deindustrialization. Millions of Americans are chronically unemployed, and millions more have turned to drugs, crime, and suicide.

Free trade is to blame. Or more specifically, Ricardian economic globalization and its ugly stepchild, offshoring. Both the economic logic and historical data bear this out.

If America does not soon redress its trade imbalances, things will only get worse for the common man—inequality will continue to increase, and nations will continue to grow ever more economically (and thus legally) integrated. Do we really want to put the rest of Marx’s thesis to the test?

Photo credit: Universal History Archive/UIG via Getty Images

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