Many mainstream economists and pundits don’t like Trump, or “Trumponomics” (Trump’s economic policy).
That’s because they’re either ignorant, or they’re liars.
It’s harsh, but it’s true.
Economists have tricked themselves into believing their theories, even when they conflict with reality. They rely on complex models, as opposed to raw data and historical fact—they don’t care about America, or its people.
In short, they don’t get out much.
The truth is that America needs “Trumponomics”.
America’s economy is bad, and it’s getting worse.
“Trumponomics“, the pejorative meaning aside, is a combination of:
1. Economic protectionism (tariffs to stop companies from offshoring).
2. Infrastructure investments (Trump’s planning to spend $1 trillion on new roads and airports etc.).
3. And cutting taxes and regulations (to improve America’s economic freedom and competitiveness).
All of these help treat the root cause of America’s economic decline, which is offshoring, and the problems it entails.
1. Trumponomics Is Economic Nationalism
Economic nationalism is at the heart of Trump’s policy.
He consistently derides the fact that American companies face no consequences for moving their factories (and jobs) to places like Mexico of China—despite selling their products in the US.
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
He’s right to call them out: all offshoring does is concentrate wealth in the hands of the elites, at the expense of America’s middle and working class—at the end of the day, global free trade doesn’t always work. It has has winners and losers, and America is one of the losers.
Basically, companies move their labor-intensive jobs abroad to somewhere cheaper, but retain the capital-intensive portions. For example, Apple offshores iPhone assembly factories, but retains the designers.
However, there are many more industrial workers than knowledge-workers (Apple may fire 10 factory workers, and only hire 1 new designer).
This means that most Americans lose out—for a detailed explanation of how offshoring works, and how it impact America, please read this comprehensive article.
Furthermore, although the imported stuff is nominally cheaper, the only people who actually benefit are those at the top—for everyone who loses their jobs, or don’t get a raise because there’s more labor competition, the stuff isn’t cheaper.
Protective tariffs (taxes on imports) will stop offshoring, by penalizing companies that leave America—if you sell it here, you make it here.
This will ensure America’s economy works for everyone—that’s how it used to be when America embraced protectionism.
It’ll be that way again.
2. Trump Will Invest $1 Trillion In America’s Infrastructure
The only one to fix the infrastructure of our country is me – roads, airports, bridges. I know how to build, pols only know how to talk!
— Donald J. Trump (@realDonaldTrump) May 13, 2015
Trumponomics is broader than shepherding American businesses so that they work towards the common goal of making our nation prosperous—it’s also about improving our overall economic efficiency.
Trump plans to do this by investing $1 trillion into America’s crumbling roads, bridges, and airports.
His chief strategist, Steve Bannon, told the Hollywood Reporter that:
With negative interest rates throughout the world, [right now’s] the greatest opportunity to rebuild [our country].
He’s right. With America’s economy in such bad shape, we could get lots of bang for our buck.
This isn’t optional, it has to be done.
Increasing efficiency is the key to growing the economy: the more work that gets done in an hour, the more stuff (or free time) we have—it’s how we improve our quality of life, and how we, as a society, get richer.
One of the easiest ways to improve productivity (for years to come) is to make our infrastructure more efficient.
Good infrastructure is key to a good economy—everything depends upon it.
This is because every business and individual benefits from having efficient airports, adequate bridges, and roads etc. Good infrastructure lowers transportation costs and minimizes time wasted travelling, or waiting for products.
Furthermore, because infrastructure benefits everyone, but is so expensive for an individual to build, it’s usually the government’s responsibility—even ardent libertarian philosophers like John Stuart Mill recognize this.
3. Lowering Taxes & Regulations
I am lowering taxes far more than any other candidate. Any negotiated increase by Congress to my proposal would still be lower than current!
— Donald J. Trump (@realDonaldTrump) May 9, 2016
Finally, Trump will lower taxes and fewer regulations—not just for big corporations, but for everyone.
For example, for people making $50,000 or less, you will only pay 5% in federal income tax. Taxes are going down, you can read about them here.
These lower rates, combined with incentives to bring back money held in offshore accounts (estimated to be roughly $2.5 trillion), should give America’s economy the jolt it needs, and will go a long way to improving our competitiveness—you may not know this, but American companies pay some of the highest taxes in the world.
It’s no wonder they’re scrambling to get out. A combination of lowering domestic taxes, and imposing protective tariffs, will keep them here.
Also, America is plagued by excessive, and often incomprehensible regulation.
Ever try reading an “omnibus bill”? It’s impossible. No one, not even the best lawyers, know the law anymore.
Trump vows to slash regulations, and a type of sunset clause, where any new regulations would need to simultaneously scrap a different regulation.
Trumponomics Will & Make America Rich Again
Donald Trump’s economic policy will work. Don’t worry.
All 3 of its main elements are historically tried and true methods.
For example, high tariffs (over 50%) were one of the main causes behind Britain’s Industrial Revolution.
America too, experienced its most rapid economic growth under protectionist policies. In fact, George Washington’s second piece of legislation was the Tariff Act of 1791.
I urge you to read this article on how economic growth actually works. Once you understand that, it’ll all make sense.