When he’s right, he’s wrong
It’s easy to watch way President Trump behaves and conclude he’s wrong. And, once you come to that conclusion often enough, it’s easy to conclude he’s wrong about everything. Easy but also lazy.
The president promised the abandoned blue-collar population constituting his base that he would reverse trade deficits. That will never happen so long as the U.S. remains the world’s largest economy and so long as consumption rather than savings and investment drive our economy.
But it’s fair to observe that Trump’s focus on China and its misbehavior has resonated beyond his base. China is stealing intellectual property from American companies. China is using its comparative advantage in manufacturing to build cash reserves that serve its One Belt One Road initiative. They are building a regional navy to challenge U.S. sea power along critical trade routes through the S. China Sea and the Straits of Malacca. They are challenging the sovereignty of our allies by claiming islands from them and building military facilities. So, Trump is right to challenge China.
However, even when he’s right, he’s wrong. The way to challenge China’s global position is to form a coalition to counter their moves. You don’t build a coalition by insulting the leaders of our traditional allies and threatening to undermine the global order. What Trump has done, both in Europe and Asia, is position the U.S. as an unreliable partner. For example, he followed through on his campaign promise to pull the U.S. out of the Trans-Pacific Partnership (TPP). He wasn’t alone in his analysis of TPP, of course. Members of Congress and presidential candidate Bernie Sanders (that font of economic wisdom) also criticized it. Ultimately, the popular pressure even got Hillary Clinton to join the chorus. (Hillary might be the last globalist we’ll see on presidential ticket for a while.)
Here’s what the TPP would have done for the U.S.: (1) joined us in a trade pact with all the economic powers of Asia (constituting 40% of global GDP) save one – China, (2) improved our access to the markets of those nations by lowering tariffs and other trade barriers and (3) created closer bonds with our trade partners to isolate China.
Now, the remaining countries of the original TPP have formed their own pact without the U.S. So, instead of buying American beef and soybeans, for example, they’ll buy from Canada and Australia. American farmers and ranchers could have used the income during our Trumped up trade war with China.
No free lunch
Ever notice that the only items in your household budget where inflation is out of control are those where there is a pile of government money available? If you’re caught in the middle class squeeze, you know I’m talking about health insurance and college tuition. So-called progressives have a solution: make it free. Of course, nothing is truly free. They’re really talking about socializing the cost of those items.
There’s a good argument to be made for government support of a healthy, well-educated middle class. Unfortunately, government programs designed to help the middle class afford health insurance and college tuition seem to work like the carrot that the donkey can never reach. It moves away as fast as one tries to reach it.
I am generally supportive of government programs that are both means tested and based on merit. However, the free lunch promised by politicians (now table stakes for Democrats running for president) doesn’t work for me. Tell me how you’ll address the structure that is driving up costs, tell me the criteria to qualify for it and I’ll listen to your ideas.
Otherwise, you’re just making an ass of yourself.
Speaking of healthcare
A common trope among Republican politicians addressing healthcare is to allow the free market to do its work. I’ve wondered how that might look and have scanned the globe (Okay. So, I just searched on Google) for a good example. I haven’t been able to find one – no example of healthcare being provided in a free market in an industrialized country. If you can find one, please let me know.
I was, however, able to find a system that seems to work better than the rest: Singapore! Mandatory health savings accounts (Medisave) are the backbone of the system. Everyone pays a percentage of their income into an account in their own name. It’s supplemented by Medifund, an endowment set up by the government to pay the expenses of the poorest 10%. And Eldershield provides supplemental care to the elderly and those with chronic conditions or disabilities. Everyone has some skin in the game. Families spend their own money for care from their Medisave accounts; so, they are careful how they spend. Providers are, therefore, incentivized to provide good outcomes at affordable prices.
It’s not perfect and it may not work on a large diverse population like that of the U.S. However, there’s a lot we can learn from it.
WHO WILL LEAD?
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