Archive for February, 2011

Dangerous Donald Trump Goes Back to the Future

Tuesday, February 15th, 2011

In the time travel film “Back to the Future,” Marty McFly goes back to the 1950s and nearly wipes out his own existence. But everything works out well for Marty and his family in this 1980s feel-good flick. Never willing to play second banana to anyone, real estate tycoon and potential presidential candidate Donald Trump wants to zoom right past Marty and drag us back to the 1930s. But unlike Mr. McFly, if The Donald gets his way most Americans will be far worse off.

Yesterday on “Your World with Neil Cavuto,” Trump told  substitute host Stuart Varney that because of China’s unfair trade practices, including its artificially weak currency, he advocated a 25% tax on all Chinese products entering the US. As I explained in the post “Congress To Punish China by Taxing America’s Poor,” such a tax would punish the mainly poor and middle class Americans who spend relatively more money on Chinese goods. Trump argues that such a tax would spur US industry and hiring. No doubt there would be some winners, mainly companies whose products were previously more expensive than similar Chinese goods. But the de facto tax on Americans of modest means would be crushing.

Mr. Trump graduated from the prestigious Wharton School (and did extremely well there!). If he took any courses in economic history, he might remember that the Smoot-Hawley tariff of the 1930s is a major reason why that era’s nearly global depression is not called the Great Depression in most countries outside the US. I’ll reiterate from my previous post:  raising trade barriers always hurts a country’s own citizens. Our standard of  living will be reduced substantially, with those earning the lowest incomes taking the brunt of the impact.

The Donald is a genius at drumming up lenders for his various real estate projects. But his economic illiteracy makes him unfit for a powerful political office. I’ll take heart that in the TV era no one with a comb-over has ever been elected president.