Donald Trump promises to bring capital and jobs back to the U.S., just like that. Can he do it? I don’t know how, at least not just like that. But someone needs to.
Tuesday night was another big one for Trump, among his victories was Florida, where he forced Marco Rubio out of the presidential race by denying him a victory in his home state — that has to be humiliating.
And Trump, who has managed to divide the GOP and the whole nation, Tuesday night called for the party to unify — around him of course.
Can’t stand the idea of the crude and downright obscene megalomaniac becoming president but I did like something he said at a nationally-televised speech before supporters last night.
He claimed he could bring American capital back to America, that he could get corporations to bring production that has steadily been sent overseas over the past several decades back to America — just like that.
He’s just going to meet with some people and with the help of some of his connections make it happen.
Well if he could do that it would seem great. Seems like it might be more complicated, though, but it’s a nice thought.
Production has moved overseas for two main reasons: labor has been cheaper and health and safety and environmental regulations are often not as stringent.
(You know those pesky environmental regulations. Who needs them? except maybe the people of Flint, Michigan.)
But globalization is something that is just a natural progression I think. And bigger and faster ships and containerization, as well as modernization in ground and air transport have really made it happen.
As the developing world, which the U.S. helped develop, gets developed nations produce more and then have to have markets for that production. So they export stuff to us and compete with our own home-grown industries.
Trump has called for raising tariffs on incoming goods. But that was tried back in the 1920s, here and in other parts for the world. It crushed world trade and the result was the Great Depression. So clearly simply raising tariffs does not seem to be a magic formula, not to say that in some cases there is not room for raising them to a degree.
Another important factor in all of this is that while imports compete with our own production, our exports can counter that, and you generally cannot have a steady flow of exports without imports — something called the balance of trade. Yeah, if I get too deep into all this I’ll confuse myself or say something that is not true. But I do have some first-hand experience with this as a truck driver.
It works like this. I sometimes haul produce to the Mexican border and then it goes on to destinations in Mexico, but I also haul Mexican produce from the border to points north. And sometimes I have hauled in wood and traded it (you might say) for produce.
Also, there are some industries or types of production that are heavily dependent upon the export market. Here is California a large portion of our almond crop goes overseas via the Port of Oakland. So if you raise tariffs other nations will reciprocate and raise their tariffs and there goes the almond market.
In recent times there was a trade dispute with Mexico involving American apples and Mexico raised the tariff on them — I have hauled thousands of tons of apples destined for Mexico.
So we need world trade and I am sure we have to live with the reality of the globalization of the world economy.
But the U.S,. needs to be productive and fully utilize its abundant natural resources: land, minerals, labor, technology and so on. And I would say we need to concentrate on quality — nothing sells and brings repeat sales like quality — just ask the Germans. (Even if VW did get a little too clever in skating by emissions standards).
I don’t know why our leaders abandoned our industrial base by not providing incentives for production at home but instead providing incentives for sending it overseas and why it was so hot for us to transform into something called the “service economy”. Blame it on Wall Street influence?
I think Washington D.C. was wrong. I think maybe labor unions did not keep their eye on the ball either. They were more worried about inflated wages and rigid works rules, while they should have looked ahead at how to compete and deal with automation and globalization.
I don’t think Trump has the magic, but since he is not weighted down by details or facts he is finding appeal among a certain portion of the populace who just want to hear someone say he can do it and it will be done — details are boring.