Analysing Trump’s economic philosophy - and why it could be bad news for everyone
Donald Trump rose to power in America under the idea that he was different; a political outsider who promised to ‘drain the swamp’ and push convention aside.
And one of the major strengths that he presented about himself was that he was, first and foremost, a dealmaker. After all, he literally (well, as we’ll see, perhaps not literally) wrote the book on it, with his 1987 tome Trump: The Art of the Deal being described by Trump as one of his proudest accomplishments and his second-favorite book after The Bible.
Deals are my art form. Other people paint beautifully or write poetry. I like making deals, preferably big deals. That's how I get my kicks.— Donald J. Trump (@realDonaldTrump) December 29, 2014
Of course, as with all things Trump, this turned out to not be strictly accurate, with co-author Tony Schwartz and the book’s publisher, Howard Kaminsky, saying that Trump had played no role in the actual writing of the book.
Nonetheless, Trump promotes himself as the dealmaker.
He promised to rip up deals which, according to him, didn’t work for America - such as NAFTA, the 2016 Paris Climate Agreement and the 2015 Iran Nuclear Deal - and renegotiate them to be better for the US.
Now, he’s edging America towards a trade war with his decision to impose tariffs on imports from the EU, China and elsewhere, sparking fears of a global trade war - something which could, ultimately, actually harm America.
So why is he acting this way?
Well, political writer - and, for full disclosure, Democrat - Matthew Chapman has posted a compelling thread on Twitter describing his ‘moment of clarity’ on realising what Trump’s economic philosophy actually is.
And it doesn’t look like good news.
Believe it or not, Trump's insane proclamation that he will keep tariffs in place until there are no more Mercedes on Fifth Avenue gave me a moment of clarity.— Matthew Chapman (@fawfulfan) June 1, 2018
I think I finally understand Trump's economic philosophy now. And we are absolutely screwed.
“Believe it or not, Trump’s insane proclamation that he will keep tariffs in place until there are no more Mercedes on Fifth Avenue gave me a moment of clarity.
“I think I finally understand Trump’s economic philosophy now. And we are absolutely screwed.
“The one thing that you need to understand about Trump is that he is, at his core, a con man with no empathy.
“Therefore, he assumes that all other people are also con men with no empathy, and every exchange of goods and services that exists in the world is, on some level, a con.
“Trump assumes every transaction in the world — between people, businesses, nation-states, even between two different agencies of the same government — has a winner and a loser, a scammer and a sucker. He believes if you’re not ripping someone off, you’re getting ripped off.
“From an economist’s perspective, this is complete nonsense. Unless there are major information asymmetries or distortions of market power, and often even then, most transactions are generally to the mutual benefit of both parties.
“Otherwise no deals would ever get made.
“But Trump — the man who created a fake university, made stiffed contractors, hired the mob, and filed for bankruptcy six times — cannot believe his.
“So he goes out of his way to cherrypick how he sees the world, so that everything we do looks like either a ripoff or a steal.
“It’s not simply that Trump *doesn’t* think the Paris Climate Agreement, Iran nuclear deal, TPP, NAFTA, or luxury cars from Germany are a good deal for America. It’s that he *can’t* think that.
“It’s an alien concept to him that a deal other people want with us could also help us.
“To Trump’s mind, the mere fact other countries sought out these deals with us, and that their own economies benefit, is unassailable proof we got ripped off.
“He can’t see the evidence they helped us too. His mind will only cherry-pick potential ways it could be bad for us.
“This is why Trump will never, ever, be able to negotiate with the rest of the world. He doesn’t believe in mutual benefit.
“The second anyone tells him “this is your end of the deal” he’ll rip it up. He believes only one party can have an end of the deal, and it shouldn’t be him.
“So folks, I hate to tell you this, but he’s only getting started.
“He will forego billions, maybe trillions, of dollars in world trade. He will forego bilateral security agreements. And if he ever gets something from another nation it will be by force.
“As I said: we’re screwed. And we’re not just screwed on foreign policy, but domestic. This explains his behavior over DACA, spiking two bipartisan deals even though they were what he asked for.
“He assumed if Democrats were willing to talk, his deal wasn’t ripping them off, ergo it would rip him off. That implies if Democrats win Congress, we are going to enter an all-out legislative standstill like we’ve never before seen.
“Our system is entirely reliant on compromise and compromise isn’t compatible with Trump’s beliefs. We will struggle to pass even basic reauthorizations.
“So yeah: our nightmare is not going to end until we get this pathological con man out of office.
“He is not just bad at being president, he has a defective way of seeing the world that is not compatible with being president.
“And we will pay for it.”
It’s an interesting idea - and we’ll discover soon enough just what the consequences are for America, and the world’s economy at large.