Trumponomics Could Be an Even Bigger Disaster, Jamming, 20/01/2017

First of all, I’m sorry for not having written even a short blog post for Thursday. I had an amazingly stressful day at work Wednesday, and I was so burned out and tired when I got home that I barely had enough energy to eat Chinese food and nap.

Can’t go wrong with the sesame chicken, but sometimes nothing can overcome total nervous burnout.

I spent yesterday doing some much more relaxing research for my communications agency job. I can work this position from my home office, which means that my working uniform usually involves a pair of bear claw slippers. No better solution for any workplace stress or burnout.

In the course of that research, I read up on general economic trends and projections, trying to incorporate them into my strategies and recommendations to clients.

All hail Fearless Leader!

One thing I discovered was this analysis of the centrepiece of the Trump Administration’s economic policy – protectionism.

When I first heard during the campaign that Trump promised a protectionist national economic policy, I knew it was a radical break from political parties’ orthodoxies in America.

Now, I’ve opposed for a long time many of the injustices that unrestrained, corporate-led free trade has created. But I also know that any solutions to the problems of corporate-led free trade can only really come from people-led globalization.

Protectionism and the autarkic ideal that inspires those policies, ultimately leads to disaster. There’s simply no way that an economy – even one with the diversity of the United States – can survive without supplemental goods and services from around the world. It’s a perfect recipe for long-term stagnation.

Look at the effect of Trump’s plan. High tariffs at the same time as you choke off immigration. America’s has a large population of people retiring from the workforce and dying off – the country has a low unemployment rate.

There are millions of people out of the workforce – maybe for their own or a family member’s health reasons, or because they just have no marketable skills. But with no plans to raise wages, or finance a nationwide equitable program of affordable higher education, those unmarketable people won’t find work.

As for Paul Ryan’s plans to gut the Affordable Care Act? Millions won’t be able to get the treatment they’d need to return to work. Nor could those millions afford or the homecare contractors to whom they can trust their ill loved ones, so they could return to the job market.

So the only way to inject capital into the country at a national scale comes from trade links. High tariffs would essentially cut off a lot of the foreign savings and investment entering the United States.

The country imports way more than it exports. But a country makes up its massive global trade deficit by selling huge numbers of state savings bonds. The sale of those bonds brings in billions of dollars in investment money.

Shutting off global trade with high tariffs shrinks your trade deficit, which sounds like a good thing – America becomes a net exporter, drawing money into the country.

But if its people are still poor when this happens, people won’t have enough money themselves to make up for the immediate-term shortfall in bond income.

A wealthy citizenry and a properly funded government can provide the investment income to fuel the economy. People, their banks, and their governments can save money and invest it in developing ventures and companies in their country.

But people in the United States are – as individuals – burdened by hideous debt. It’s a continued hangover of the mortgage crisis at the end of last decade, for older folks. For younger people, it’s the crushing weight of enormous student loans to pay off at the very beginning of their careers in a workforce of insecure labour.

So the economy is choked from two sources. Foreign investment plummets, the government is so underfunded that a budget surplus is impossible, millions of people are drowning in personal debt.

Whatever income first comes from the export surplus won’t make up that difference. The surplus will only come from the same inadequate export numbers the US now has – it’ll only be a surplus because imports shut off. With fewer goods on market, prices will increase, but no one will be making any more money and they’ll have just as much debt.

Some people already live like it's the Great Depression again.
Millions more might if this economic scenario happens.

Low incomes and rising prices means mass poverty.

The solution to unjust globalization led by corporate oligarchs isn’t turning away from the world. It’s a just globalization. Such a thing is possible. Here’s one way to imagine a just, fair globalization.

Governments around the world cooperate to build planetary infrastructure – transit links, internet cables, transnational power lines, ecological preserves, treaties to manage and conserve natural resources properly. Stuff like that.

People build business links around the world through professional networking associations. I’m a member of one – the International Association of Business Communicators. And there may be thousands upon thousands of similar associations all over the world. All building links and making deals. Actually person to person.

Imagine a world built by the world’s governments and independent, hustling businesspeople.