Because Dr. X asked, and I’m foolish enough to think I might have anything worthwhile to say, let’s look at Trump’s comments on why he should be our next President.
On the trade imbalance with China: “They don’t have the cards. We have the cards.”
No, I think China has the cards, and here’s why.
- First, China’s a major loaner of funds to the U.S. to help us engage in massive deficit financing. They’re not going to dump that debt, as some scaremongers fear, because then they’d lose their shirts and pants on the investment. But they could stop buying US securities, and then we might have to pay more interest to get more securities sold, which means financing government will cost us more. (Keep in mind neither Obama nor the Republicans are talking about reducing the deb, just the deficit–i.e., reducing the rate at which we rack up more debt.)
- Second, China doesn’t need our market as much as they used to. They have both a growing internal consumer goods market and have surpassed the U.S. as the largest trading partner for Brazil, which, with a population of nearly 200 million and a GDP per capita that has grown 31% since 1990 (surpassing Mexico), has the world’s 9th largest economy.
Source: World Bank. The values are in constant 2000 U.S. dollars. In current dollars, Brazil’s GDP per capita is between $8,230 and about 1100$, depending on who’s counting. The latter number is by purchasing power parity, but I’m not sure about the prior one, which I suspect is by exchange rates (PPP is a better measure).
On the price of gasoline: “We can’t pay $108 a barrel [for] oil. It’s sapping our country.”
No, yes, and what could he possible do about it? High oil prices do sap our economy because so much of our economic activity runs on oil. However we can pay $108 per barrel. It’s an issue of what we don’t want to do, not what we can’t do. And what action can a U.S. president take toward oil exporting countries that would actually reduce oil prices? The one action I can think of is nuking China from end to end, totally destroying the country, to eliminate its growing demand. Since Trump isn’t going to do that, his ability to affect oil prices as president would be about as much as Carter’s, Bush’s, Clinton’s, Bush’s or Obama’s. If there was some magic strategy, I suspect one of the last five presidents would have figured it out. And do we really need as president a businessman who doesn’t understand the concept of supply and demand?