In Part I, I covered the “very good indeed” parts of President Donald Trump’s economic policies: the 2017 tax cut and the deregulation and slowing of new regulation. Here I turn to the “horrid:” his attacks on free trade, his hostility to immigration, and his failure to do anything to rein in federal spending. As in Part I, I wear two hats in judging him: (1) as a believer in economic freedom and (2) as an economist who cares about people’s economic wellbeing.
This is the opening paragraph of David R. Henderson, “Trump’s Economic Policies: An Assessment, Part II,” Defining Ideas, October 30, 2019.
What did Trump have in mind when he said that “people or countries come in to raid the great wealth of our Nation?” He didn’t specify in that tweet, but if we go by his past statements, he sees low-price imports as a raid on our wealth.
If we apply the same reasoning to a trip to Costco, he would see Costco selling delicious Kirkland bacon to me as a raid on David Henderson’s wealth. Of course, it isn’t. The lower the price I pay for a given product, the better off I am. Low prices enhance my wealth rather than destroy it. Virtually everyone understands that in a domestic context. The reasoning doesn’t magically change when the goods we buy cross a border.
And an excerpt on immigration:
I noted above that Trump’s actions have probably discouraged immigration. One check of the data bears that out. According to U.S. Census data collected every year, the number of foreign-born people in the United States increased between 2011 and 2017 by an average of 691,000 and during that time the smallest increase was 446,798 in 2012. But between 2017 and 2018, the number dropped to an astoundingly low 202,866.
That means that not only will we do without workers in the low-wage occupations like agriculture but also that we will likely miss out on budding entrepreneurs. Arnobio Morelix, an analyst at the Kauffman Foundation, found that immigrants “are about twice as likely as natives to start a new business.”
Read the whole thing here.