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How Ross Perot Paved The Way For Trump

How Ross Perot Paved The Way For Trump

A nationally known tycoon with a boastful personality, a penchant for tough talk, an aversion to illegal immigration and free trade, and a contempt for Washington norms: Before there was Donald Trump, there was Ross Perot. His two presidential campaigns planted seeds that would bear poisonous fruit 20 years later.

Perot, who died Tuesday, was the improbable candidate in 1992. Entering as a third-party challenger against President George H.W. Bush and Gov. Bill Clinton, he captured the spotlight and soon led in the polls. Despite pulling out in July, only to reenter in October, he got nearly 19 percent of the vote, the strongest showing by a non-major party candidate since 1912. Running in 1996 as the nominee of the Reform Party, which he founded, he got 8.4 percent of the vote.

In his races, Perot provided a road map for a populist charlatan to reach the White House. He was an unconventional candidate peddling crude and shallow solutions, many of which bear a strong resemblance to what Trump would later propose. Consciously or not, Trump borrowed liberally from Perot’s formula in his own campaign, and he made it work.

The parallels are many. NAFTA was a terrible deal? Perot fulminated against it in 1992. Stop spending money protecting our allies? Perot had the same idea. Slap tariffs on our biggest Asian trading partner for its unfair practices? Trump has gone after China the way Perot threatened to go after Japan.

Trump threatened to “send in the feds” to stop crime in Chicago, which apparently meant deploying the National Guard. Perot’s idea was to “declare civil war and the drug dealer is the enemy.”

Perot didn’t make the blatant appeals to white racism that Trump does. But in 2000, his Reform Party nominated someone who did. Pat Buchanan extolled the Confederacy, warned that immigration would make America “a Third World nation” and earned the praise of neo-Nazi David Duke. Trump is what you would get if you blended Perot and Buchanan over high heat.

Serious policy ideas are not the essence of Trumpism or Perotism. What distinguished the Texas computer magnate — who was the self-made billionaire Trump pretends to be — was his glib, cocksure manner, suggesting that all problems would yield to the blunt hammer of his common sense. After years of watching career politicians fall short, Americans were taken with his claim that a savvy business mogul would do better.

Like Trump, Perot was thin-skinned and given to bizarre fantasies. At one point, he whined bitterly, “The Republicans have had a nonstop saturation bombing to recast my personality.” He withdrew in 1992, he said, out of fear the GOP would smear his daughter and ruin her wedding.

Trump promised to “drain the swamp” in Washington, much as Perot vowed to “take out the trash and clean out the barn.” Trump’s demand to “remove bureaucrats who only know how to kill jobs (and) replace them with experts who know how to create jobs” sounds like it was plagiarized from Perot.

Like Trump, Perot had no appetite for complexity or details. His idea for education? “Let’s stop having two-day summits for governors that don’t amount to anything, and let’s get down to blocking and tackling and fixing it now.” The tax code? “No. 1, it’s got to be fair. No. 2, it’s got to raise revenue.”

Politicians, in his mind, were guilty of overthinking. “I’ve got a lot of experience in not taking 10 years to solve a 10-minute problem,” he bragged. Trump talks in exactly the same way, offering simplicity spawned by ignorance.

Perot did have a positive impact on the federal budget deficit. He laid out a bold plan to eliminate it, including tax increases and spending cuts that included both entitlement programs like Social Security and Medicare and the military budget.

When Clinton became president, he was forced to take steps, in concert with Republicans in Congress, that yielded a surplus. Without Perot, it might not have happened.

Trump said he would not only balance the budget but pay off the entire national debt in eight years. But unlike Perot’s budget promises, Trump’s were utterly fraudulent. He signed a tax cut that was guaranteed to boost a federal debt that was already on a soaring trajectory.

For the most part, though, Perot was a false prophet, relying on glib bromides, a pugnacious attitude and a disdain for the compromises and trade-offs that democratic government requires. In 1992 and 1996, we managed to resist the coarse nativist demagoguery being offered. In 2016, we succumbed.

Steve Chapman blogs at http://www.chicagotribune.com/news/opinion/chapman. Follow him on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

IMAGE: Texas billionaire and Reform Party presidential candidate Ross Perot.

 

How Trump’s Tariffs May Kill The Economy

How Trump’s Tariffs May Kill The Economy

Donald Trump tweeted in May that by imposing a 25 percent tariff on $250 billion of Chinese goods “China would greatly slow down, and we would automatically speed up!”

But that’s not what’s happening, the Organization for Economic Cooperation and Development (OECD) reported today. Economic growth is easing in developed countries with one big exception – China.

In a report released today, the OECD provided four revealing graphics covering the United States, the 32 OECD countries from New Zealand to Austria, the Eurozone which uses a common currency and China.

Notice that each line ends on the right pointing down except for China, which is trending up.

The blue triangles above indicate the start of clear trends showing either improved economic growth or slowing growth. Triangles without shading indicate trends that are not so clear and may reverse.

There are signs aplenty that the American economy is slowing down. In May just 75,000 new jobs were added, bringing the average so far this year down to 164,000 jobs, well below the kind of job growth since the recovery from the Great Recession started in early 2010.

Manufacturing jobs, which Trump said would blossom on his watch, were flat in May. Give that U.S. exports of goods fell by 4.2% in April the outlook for manufacturing jobs this summer is not good.

Don’t expect Trump to speak of this, however, at least not in any logical and structured way. The self-proclaimed “very stable genius” demonstrates again and again that he doesn’t understand economics even though in 1968 Penn gave him a degree in the dismal science.

While Trump claims to be a world-class expert on tariffs, his own words show he does not even understand the basics. Consider this tweet:

Wrong. Totally, completely, 100% wrong.

Tariffs are paid to Treasury by American companies that import goods, not China.

Companies that import Chinese goods must either absorb the cost of the tariffs, which makes them less profitable or pass the cost on to consumers by raising prices. Guess which option is overwhelmingly more likely.

Raising prices on imported goods to cover the cost of the Trump tariffs means that domestic companies can raise their prices, too. Generally, domestic companies can hike prices up to the level of the imported goods plus tariffs.

That means American consumers pay more even if they buy American made products instead of imports from China.

Companies that import goods from China could move production here. The problem is that this is not just expensive, and takes time, but the money would be wasted if Trump suddenly ends the tariffs.

That is exactly what we say with Trump’s vow to impose a five percent tariff on goods imported from Mexico starting Monday, June 10. Trump reversed himself before the Mexican tariffs would have taken effect, claiming he had just made a great deal with Mexico.

Trouble is, Mexico agreed to some Trump demands late last year, as the Trump administration told Congress in December.

The smart money holds that Trump never intended to impose those tariffs, which were part of a ploy to proclaim himself a great negotiator who got Mexico to change its policies.

And the claim by Trump and Pence that they just reached a secret deal with Mexico that will soon become public? The Mexican government says that’s sheer fantasy.

While Trump proclaims himself the greatest ever tax-cutting president his administration has nearly doubled tariffs on imports.

Tariffs are taxes. They function like the retail sales tax added to your purchases at the cash register except that they are invisible to you since no law mandates listing tariffs on receipts. Think of Trump’s tariffs as a stealth tax hike on consumers.

Since the start of the 2019 federal budget year, which began Oct. 1, tariffs totaled just shy of $40 billion, Treasury data shows. That’s almost double the tariffs imposed during the same period three years ago under former President Barack Obama.

Trump insisted Monday, June 10 that he will soon have a great trade deal with China.

“China will, in my opinion, based on a lot of facts and a lot of knowledge, China’s going to make a deal because they’re going to have to make a deal,” Trump told Joe Kernen of CNBC.

Then Trump veered off into nonsense. “If you look at China, China, as great as they are and they are great, they are near the capability of our geniuses in Silicon Valley that walk around in undershirts and they were not $2 billion a piece.”

Even Trump can’t have meant what he said, talking of underwear that costs $2 billion per piece. Let’s hope so.

But delusional statements, which I’ve watched Trump make for three decades, permeate much of what he says.In the past Trump has told lurid tales of imaginary lovers and imaginary executives, as I documented in my biography The Making of Donald Trump. On CNBC Monday Trump called upon his imaginary “they” to invent a conversation with the paramount leader in Beijing:

President Xi, we have a great relationship.

I say, “How is it possible that you got away with this for so long?”

And he said, “Because nobody ever asked us to change.”

It’s true.

And they said to me, “We expected that somebody would call and say, ‘You cannot do that.’ Nobody called so we left it.”

And I don’t blame them. We should have been doing the same thing to them. But we didn’t.

What’s going on here? Fear. Trump lives in fear. He fears people will see his tax returns and bank records, exposing his claims of being worth billions as pure fantasy. He fears what those around him may say so he makes them sign lifetime nondisclosure agreements.

How fear of China consumes Trump was revealed in a story that did not get much attention in April.

Flying back from China on Air Force One, Trump telephoned former President Jimmy Carter, who in 1979 normalized diplomatic relations with Beijing.

Trump expressed fears about China overtaking the United States as an economic and political power, Carter told his Sunday School class at Maranatha Baptist Church in Plains, Georgia. “China is getting ahead of us,” Carter quoted Trump as saying.

Carter then made an interesting point, noting that the United States has been in wars for all but 16 years since its founding 242 years ago.

Wars are a costly drain on an economy, diverting money that could go to productive civilian use into financing the death and destruction caused by bombs and other weapons. Much of the cost of war is spending overseas rather than at home, exactly what Trump claims is the reason he imposed tariffs on Chinese goods.

Emma Hurt, a reporter for WABE public radio in Atlanta who broke the story, quoted Carter as saying China is not engaged in war anywhere and has not been for decades:

Carter suggested that instead of war, China has been investing in its own infrastructure, mentioning that China has 18,000 miles of high-speed railroad.

“How many miles of high-speed railroad do we have in this country?”

Zero, the congregation answered.

“We have wasted I think $3 trillion,” Carter said of American military spending. “… It’s more than you can imagine. China has not wasted a single penny on war and that’s why they’re ahead of us. In almost every way.”

Trump just sent ships and troops to the Middle East in what he said he hopes will not become a war with Iran. That is a reversal of his campaign promise to get America out of Middle East combat.

But, hey, Trump tariffs are sure to make China poor and all that money Trump imagines is flowing into the Treasury Department will pay for any new wars, right?

Only in Donald’s jumbled mind. Meanwhile, hold fast to your wallet if you can because Trump’s tax increases, euphemistically called tariffs, are going to make it thinner.

 

 

Trump’s Malignant Trade War Reflects His Economic Ignorance

Trump’s Malignant Trade War Reflects His Economic Ignorance

 

Larry Kudlow, Donald Trump’s chief economic adviser, understands that tariffs on Chinese imports are a tax paid by American companies and consumers — a point his boss refuses to acknowledge. The president’s weird insistence that “China” pays the tariffs reflects not just his reluctance to take responsibility for tax increases but his longstanding, sincere and fundamentally mistaken views on international trade — views that do not bode well for the outcome of his trade war.

“Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump tweeted last Friday. As Kudlow conceded in a Fox News interview on Sunday, that is not how tariffs work. U.S. importers pay the tariffs, and they respond by reducing their profit margins, raising prices or both.

A recent study of Trump’s tariffs by economists at Princeton, Columbia and the Federal Reserve Bank of New York noted that, in 2018, “The U.S. experienced substantial increases in the prices of intermediates and final goods, dramatic changes to its supply-chain network, reductions in availability of imported varieties, and complete passthrough of the tariffs into domestic prices of imported goods.” By the end of the year, they estimated, the tariffs were costing Americans $3 billion a month in added taxes and another $1.4 billion a month in lost efficiency.

That was before Trump raised the rate on $200 billion in Chinese products from 10 percent to 25 percent. The administration plans to extend the 25 percent tariff to another $300 billion in goods, which would cover nearly everything Americans import from China, including computers and cellphones.

Kudlow argues that the price is worth paying if the tariffs pressure China to address American complaints about subsidies, restrictions on access to the Chinese market, intellectual property theft and mandated transfers of technology and ownership stakes. Trump, by contrast, refuses to admit Americans are paying any price at all.

The president does acknowledge that China’s retaliatory tariffs have hurt American farmers, and he promises to help them, using revenue generated by his own tariffs, which amounts to a transfer from one set of victims to another. His stance is not just a form of blame-shifting but a logical corollary of his economically ignorant conviction that exports are good and imports are bad.

“You only have to look at our trade deficit to see that we are being taken to the cleaners by our trading partners,” Trump wrote two decades ago in The America We Deserve, arguing that peaceful economic exchange is “like war.” This mercantilist notion — that something shady must be happening unless the Unites States exports at least as much to a particular country as it imports from that country — continues to dominate his thinking about international trade.

“If we didn’t trade,” the president averred last year, “we’d save a hell of a lot of money.” But that does not mean we’d be better off, as we would not have all the things we buy with our money, which we clearly value more than the money itself; no one forces us to exchange one for the other. The analysis is the same whether or not the people who sell us things happen to be located in the United States.

As Rep. Justin Amash (R-MI), pointed out at the time and again when Trump claimed last week that money is “lost” when it’s spent on Chinese products, “A trade deficit is not a loss of money. If you buy from a supermarket or go to a movie, you have a trade deficit, but you have not lost money; you get stuff (groceries, entertainment, etc.) in exchange for your dollars.”

Whatever you think of Trump’s tariffs as a negotiating tactic, you should be troubled by the fact that the resolution of this trade war is in the hands of a man who thinks Americans would be better off if they spent nothing on imported goods they demonstrably want.

Jacob Sullum is a senior editor at Reason magazine. Follow him on Twitter: @JacobSullum. To find out more about Jacob Sullum and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.

IMAGE: People walk past a sign board of Huawei at CES (Consumer Electronics Show) Asia 2016 in Shanghai, China May 12, 2016. REUTERS/Aly Song

There’s Little Joy In Trump’s Economy

There’s Little Joy In Trump’s Economy

The American people have been ordered to celebrate the 10-year anniversary of the economic recovery. Note the lack of balloons, however, and that the marching bands have their feet up.

President Donald Trump, of course, is a brass section unto himself. He’s been trumpeting the “Trump economy,” even though nearly eight of those 10 years were under Barack Obama.

Consider this recent presidential tweet: “More people are working today in the United States, 158,000,000, than at any time in our Country’s history. That is a Big Deal!”

That is a good thing, but a big deal? No. First off, there are more people in the U.S. than ever before. More to the point, only 20,000 nonfarm payrolls were added last month. That prompted this sober headline from CNBC: “Job creation grinds to a near-halt in February.”

Stock investors have enjoyed a very nice run (as they did in the Obama years). But down in the trenches of blue-collar America, things aren’t nearly as hot. Factory workers are finding plenty of jobs, and their wages are creeping up. But solidly middle-class paychecks, once the pride of our manufacturing economy, have not returned.

The happy message clashes with reports that a record number of Americans died in 2017 from alcohol, drugs and suicide. These largely self-inflicted tragedies have been called “deaths of despair.”

Of course, it’s not only about money. The loss of strong families has left many troubled people bereft of help, love and solace when hopelessness takes over.

But add in threats to the government benefits important to working Americans, and you have major-league anxiety. Of special concern is the Affordable Care Act, which the Trump administration is doing its best to dismantle. For many families facing health crises, medical coverage is all that stands between making do and destitution.

Candidate Trump played the self-made billionaire, promising to do for struggling Americans what he did for himself. (Actually, his father gave him $413 million in today’s dollars.) Upon being elected, he continued to do for himself, while delivering daily pep talks to working folk.

His tax cut sent nearly all the benefits to the top incomes. The savings for the lower incomes were meager and designed to expire shortly.

It can’t be said that the tax cuts did nothing to goose the larger economy. They did, but that magic is about to expire. And by the way, it was all done with borrowed money.

The trade war spectacle has taken a bite out of the economy’s animal spirits. The marquee event is the battle with China. One hopes that Trump will succeed in stopping China’s very unfair trading practices: illegal government subsidies, biased regulations and theft of intellectual property.

But his announcement that China may guarantee purchases of U.S. soybeans sets off a long yawn. The Chinese were importing enormous shiploads of soybeans before Trump launched the trade war.

As a commodity trader told Bloomberg News, “The markets are a little tired of some of the ups and downs and the eight or 12-hour news cycle of tweets.” Oh, yes, the trade deficit — a Trumpian obsession — is now the highest in 10 years.

Trump routinely deafened Twitter with his promise of 4 percent growth in the economy. The gross domestic product hasn’t even passed 3 percent for any year. Better times, meanwhile, are not yet to come.

Economists see the economy softening, and the manufacturing sector seems to know it. “SC businesses brace for eventual recession,” says a pessimistic headline in The (Charleston, South Carolina) Post and Courier.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com.To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.