Donald Trump’s Economic Illiteracy

June 26, 2018 | By Paul Mackenzie Ross | Filed in: economics, politics.

I’m not a fan of Donald Trump, I never have been. I have a great many reasons not to support the man and his ideas but the latest “trade war” BS with the rest of the world is truly crazy.

As a Brit I consider myself to be a “patriot”. I love my country and my people and I will do whatever I can to benefit and be of benefit to my fellow countrymen and women.

That includes, wherever possible, to “Buy British”.

But what exactly does “Buy British” mean? Do we buy “British” cars such as Land Rovers and Jaguars and Minis? What about Vauxhalls? Or Fords?

As much as those seem to have been British in the past they are now Indian, German, French and American. So why not buy a Toyota, Honda or Nissan? They’re made in Britain, right?

Well that’s great that we have stuff made in Britain but is it British? What is British? Is it that the name is British, the brand is British, that it’s made in Britain, the HQ is in Britain or that all the profits and benefits remain in Britain?

And what about the fact that Britain is just England, Wales and Scotland? What about Northern Ireland? Surely they are fellow countrymen?

It’s all interesting stuff, right? Can you buy a British washing machine or a British TV or even a British phone? Which brands are those and where are they made?

And as an average Brit living in an age of continued austerity, what choices do you have? With a foreign worker earning less than a pound an hour to make goods as cheap as you can afford or a Brit demanding a minimum wage or even a living wage, do you see that it costs ten times as much to make something at home? Are you prepared to pay ten times as much as you do currently? Even if that’s an oversimplified view, do you think you’ll be able to get “cheap stuff” by buying British?

It’s simple economics.

You want cheap shit? Then the chances are that you won’t be buying British. Expensive things are for rich people. Premium goods and services are for premium pockets. The majority of the British populace are not rich, there’s a massive imbalance in who owns and distributes the wealth, but that’s another story.

The point here I said that when Donald Trump gets all nationalistic and attempts to redress “unfair” trade with the rest of the world, that simple economics comes into play.

By bleating on about trade deficits and unfair advantages, by complaining how the rest of the world is “taking advantage” of the USA, The Donald himself is being simplistic.

America is the richest country on earth, right? The wealth, the big cars, the big houses, the cheap gas, the innovate tech, the big brands, the culture etc. The 99%, the 1%, the American Dream.

And to be the richest you rely on the laws of supply and demand. And cost. American brand technology – you want to be that Patriot, to buy your home country brand – your Dell, your IBM, you’re Apple, your Google… all made in America, right?


Then demand that they are made in America. Every hourly wage needs to go up from $1 in Asia to $10 at home, right? Give an American a job at ten times the rate of a foreigner. Maybe that won’t equate to your TV, your phone, your laptop, your gadgets being ten times more expensive. But things will be more expensive won’t they?!

Are you prepared to pay that price!?

I was married to an American and, when back home, I witnessed her refuse to fill her car with gas because she knew there was a gas station down the road that was 2c a gallon cheaper! With a 13 gallon tank that’s a paltry 26c and that was when the exchange rate was £1 = $2, but that’s what I’ve experienced Americans think. They want things to be as cheap as they can even though they already are cheap!

In the UK if the price per litre of fuel goes up just 1p that’s 4.5p per gallon, so that’s half a dollar to an American for each tank of fuel. I’m sure they wouldn’t be happy about that. In fact I know they won’t be because I’ve been going to the USA for 13 years and have seen it when the fuel prices went up.

So, if Donald Trump thinks that “trade wars are easy” then I’m sure he’s right. It probably is easy to start a war. It’s a lot harder, especially for the likes of him, to sit down and sort this out diplomatically and in a progressive and mutually beneficial way. That takes time, intelligence, experience, patience and an ability to be honest and fair.

And if he thinks he’s going to “Make America Great Again” then I wonder… how great will America be when the cost and the price of everything starts to go up? As mentioned at the start of this – I would love to buy British but I don’t think I can afford to.

Just to finish off, I thought that MAGA would become MAEA. It doesn’t have the same phonetic ring to it but the sentiment is correct – Make America Expensive Again.

NB [20180627] Googling “Make America Expensive Again” for an image for this post, the top result is for a piece by the Foundation for Economic Education (FEE) titled Protectionism Will Make America Expensive Again. The funny thing is that the FEE article dates back to January 2017, so it just proves this is common sense thinking.

[20180714] Laughing at ‘Make America Great Again’ hats could double in price after new US tariffs.


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