The Mercantilist

Veronique de Rugy contends that one should take Trump at his word on trade.  It’s doubtful that anyone should take Trump’s word for anything, but that’s too literal a reading of her claim.  She’s right that, in effect, Trump truly opposes free trade no matter what he says:

As we embark on a trade war, let’s put this question to rest. Deep down, President Trump is not a free trader.

Nothing in what the president has ever said suggests that he’s anything but a diehard mercantilist. Yes, it’s true that he complains loudly of the treatment of U.S. exporters abroad — treatment he no doubt wants to change. It’s also true that he has endorsed dropping all tariffs around the world to zero.

But even these seemingly free-trade stances stem from fundamentally protectionist beliefs: First, that if there were no tariffs, U.S. exports would rise dramatically and surpass imports, shrinking the dreaded trade deficit. And second, that exports are great and imports are bad. In other words, America wins with low imports and high exports.

He is wrong on all counts. If the U.S. trade deficit were to ever disappear, America’s economic health would take a turn for the worse. As long as the United States is growing and remains an attractive place to invest, we will continue to run a trade deficit with the rest of the world.

Via On Trade, Trump Is Who He Claims to Be.

There’s a local version of this backward economics, in small towns like Whitewater.  Just as Trump undermines free trade with nations abroad, local business leagues &  ‘development professionals’ undermine free markets in capital, labor, and goods.  These men have a pre-modern, unproductive ideology of picking and choosing through government intervention in subsidies or regulations.  Their tools are the tools of government meddling in the marketplace: state capitalism, crony capitalism, or regulatory favoritism.

They have a way of doing things, of course; it’s an unproductive way.  They have a way of speaking; it’s a vacuous language.  They are sure of themselves; it’s the confidence of alchemists and sorcerers.

Weak local thinking across America helped pave the way for Trump; Trumpism now undermines national achievements and encourages even worse local policies.