Import tax

Politicians lie and none do it better than Hilary and Trump. Talking heads know this but they keep asking the candidates for their position on issues. What is to be gained by listening to people who lie. When a candidate makes a promise and then fails to carry out the promise all he has to say is things changed and so I had to change. Obama has said that there is a big difference between campaigning and governing. The big change is what you said then and what you say now. I can only hazard a guess as to the things Trump is saying and here is my guess on the economy. Political realities dictate that we cannot solve our national debt problem by cutting entitlements like social security, Medicare and Medicaid, so we must look for other answers. The obvious is to grow the economy. A sustained growth rate of 5% would take care of the debt problem and the answer to that is to bring back manufacturing jobs. I have always been a fan of Milton Friedman who was the free trade guru, but it works one way in the theoretical and another way in the real world. While the United States is closely following the idea of free trade our trading partners are not and Trump sees this more clearly that most politicians. The original thinking was that the United States would lose out to other countries because our wages were too high and so over the years our industries moved to countries where wages were low. This was a boon to the American consumer who benefitted from cheap products. Just look at flat screen TV’s at Walmart. If we had kept producing TV’s here they would cost a lot more but the people who made them would be earning more and able to pay more. The Friedman way was tried and is not working so Trump has a plan to reverse this trend and get back to making things in the US. He plans to place import taxes on all goods from China which will raise the price of those goods and make them non-competitive. This will encourage US manufacturers to start making TV’s once again. The whole idea will spread to other industries and slowly the US manufacturing business will be revitalized and once again the middle and lower income groups will see real growth in their standard of living. As the US builds new plants using the latest technology the cost per unit will come down and wages will rise. Most economists will say this will not work but what we have is not working either, at least for the middle and low income people.