Where We Can Work with Trump

You’d think we’d be used to sleeping with the enemy by now, but even though there are several issues that can bring us on board the Trump Train, many of us feel a natural revulsion to racist, misogynistic, and nationalistic rhetoric. But let me make an argument to you: we can work with this guy.

As a good friend pointed out to me recently, we libertarians have to really take what we can get when it comes to federal politics. Gary Johnson’s lack luster performance during the last election means that over the next four years at least, we libertarians are going to have to make some strange ideological bedfellows. You’d think we’d be used to sleeping with the enemy by now, but even though there are several issues that can bring us on board the Trump Train, many of us feel a natural revulsion to racist, misogynistic, and nationalistic rhetoric. But let me make an argument to you: we can work with this guy.

Yesterday the President met with 12 of the nation’s most powerful CEO’s (including Elon Musk and Marillyn Hewson) to discuss his vision for the American economy. The whole opening speech he gives is worth a listen, but I’d like to zero in a several key points. First, I think it should be mentioned that meeting with corporations in this way smacks of corporate Fascism, but perhaps it’s not such a maniacal move. Many of these companies are more powerful than some nations, and so it makes sense in that context to meet with these CEO’s as the President might meet with foreign dignitaries.

There are two things the President said that really stroke my Capitalism boner. First he said that we are going to “cut taxes massively”. Of course libertarians jump at the opportunity to cut taxes but the obvious question that leaps to mind is “cut taxes for whom?” As long as he’s cutting taxes, I’m happy. But he stipulated that he wanted to cut taxes for the middle class as well as for business. If he can get the House to go along with him on this (and why wouldn’t they?), then I wholeheartedly welcome a major tax cut. Sure it will balloon the debt, but it’s unlikely that we were going anywhere on that front anyway.

Secondly, the President said that we were going to reduce the number of regulations “by 75%, maybe more.” And went on to say that if companies had their choice, they’d choose lower regulations over lower taxes every-time. He’s probably right on that account. We’ve seen a massive reduction in economic regulation before, during the Reagan administration, and it produced what is sometimes derisively called the “Reagan-Thatcher Economic Miracle”. I’m not saying that these policies were perfect then or will be perfect now, but what I am saying is that cutting regulations and taxes by as much as the President is promising is something that gives libertarians wet-dreams.

Of course, none of this is going to make me go out and buy a bunch of MAGA gear, and it’s also not going to soften my attitude towards the White Nationalist movement, but I’m personally reserving a lot of my criticisms of the administration until I’m convinced none of the above is actually going to happen. We’ll see. But I’m hopeful.

This is the End of the West as We Know It?

I don’t feel fine.

The Independent reported yesterday that Marine Le Pen has taken a sizable lead over former French President Nicolas Sarkozy in the run up to the French general election next year. For those of you who are unfamiliar with Ms. Le Pen, she is the leader of France’s Front National, a far-right political party founded in part by former Nazi collaborator Roland Gaucher. Among other things, Ms Le Pen promises to end immigration, strengthen French prestige and international influence, and pursue a slew of “France First” economic and social policies. If the margin of victory is strong enough, Le Pen is poised to deal another serious blow to European and global integration schemes such as the EU, the WTO, and others.

She is not currently projected to win the election, but those are the same sources which predicted that the Brits wouldn’t Brexit and that the Donald hadn’t a prayer of seizing the Oval Office. However, the French are far more liberal than the Brits or the Yanks, and polling data has Le Pen losing the race in the second round by more than 10 points. Still. The polls have been wrong about these things before. The rising tide of European nationalism and American populism has made many people (myself included) worried about the future of Western Liberal Democracy. Some have even gone so far as to lament that this is the beginning of the end for the West.

In the post WWII era, quality of life for most people around the globe has gone up. This is due primarily to the benefits of international free trade, and the democratic institutions which encourage entrepreneurship, creativity, and efficiency. But, despite the easily observable growth in living standards, many in the west favor globalization much less so than their former colonies and protectorates (see graph). It’s difficult to pin down exactly why this is, but some have opined that the growth of so-called 3rd world economies has left the working class in the West feeling like they’re being left behind. This is demonstrably false. Larger and larger slices of pie are going to the developing world, but the pie as a whole is also getting much larger. Everyone’s slice is bigger. That doesn’t seem to matter though. For the former great Empires, seeing a Cambodian prosper must mean that that has come at the expense of their own prosperity because, for hundreds of years, it was true the other way around.

During the age of the great European Empires, the economic principle of Mercantilism (that world wealth is fixed, and in order to have more wealth, one must take it from someone else), guided the policies of the British, French, Germans, Austrians etc. But Mercantilism was never the guiding economic policy of the United States. Instead, America pursued a system of (mostly/usually) free enterprise- the Smithian system. Freedom and liberalization is what leads to broad-based economic prosperity. The West can be saved if we keep that in mind.

This is the Vision of the Night

How bad is Trump’s economic plan? Very.

In yesterday’s post I talked about the necessity of freeing the market place in order to spur innovation in the energy sector. I wrote that the great expansion in human prosperity came as a result of the implementation of a set of ideas- ideas that were first enunciated by Adam Smith in his book The Wealth of Nations. Broadly speaking, these principles are free markets, free trade, and free immigration. Trump’s economic “Vision”,  released August 8th, and subsequently revised, rejects those principles in favor of a bureaucratic, corporate management of the economy. Hillary’s plan isn’t much better, but more on that some other time.

I should first admit that his tax plan doesn’t look half bad. Reducing taxes, simplifying the tax code, and offering a cocktail of credits is in the right direction. I have my doubts on how serious Trump is on this, though. His tax plan has already undergone several revisions, and he criticized Gov. Scott Walker for not caving to the Unions and raising taxes in Wisconsin. Let’s give him the benefit of the doubt here. If his current plan is the one he pursues, America will be better off for it (providing his other positions don’t do more harm than his tax plan does good).

Trump’s position on trade, however, is frustratingly wrong. Flatly wrong. Lunacy. Trump favors economic protectionism, which is the idea that domestic firms should get preferential treatment in trade negotiations by establishing tariffs and other trade restrictions.  Economists argue among themselves a lot, but there are a few things that they almost always agree upon. One of those things is the benefits of free trade. At this stage in the game, with hundreds of years of economic study behind us, making a case for protectionism is madness. It’s a lot like when some quack tries to prove that vaccines cause autism. Utter nonsense. There’s no evidence to suggest that protectionism is economically beneficial. Therefore, I don’t have to demonstrate to you (even though I can) that free trade is the more beneficial policy, because, as Hitchen’s razor points out, what can be asserted without evidence can be dismissed without evidence.

It’s easy for me to get fired up about trade policy, but it’s hard to put name and faces with those who are hurt but the injustice of protectionism. Immigration is a different story. Not only is Trump’s plan to deport millions of people economically and politically unfeasible, it’s also morally abhorrent. These people are coming here because there is work for them to do. They are coming here because they are desperate. We need them, and they need us. What’s often forgotten in thinking about economic issues is the way in which policy affects real people in their everyday lives. I hope that by examining the moral tragedy of deportation, you will come to a deeper conclusion about the great harm of many of Trump’s other economic policies. Our economy is fragile. It may not survive President Trump.

Wanna Save the World? Free the Market.

What’s needed in the energy sector is an innovation boom.We need to develop technologies that will simply out compete fossil fuels. What we need is to hold true to Smith’s observation: free trade, free immigration, and free markets.

I never intended to write a three part series on energy for this blog, but I felt I was starting to make an argument for something, and that I should probably do my best to finish it. However, my strict 500 word policy left me cutting corners a lot, and today’s post will be no different.

In the first part of this series, I talked about developing a new framework for thinking about energy policy (Safety, Efficiency, Economy, Sustainability), the problem with fossils fuels, possible solutions to those problems, and then problems with those solutions. In the second part, I tried to argue that a new form of nuclear energy, the Liquid Fluoride Thorium Reactor, is our best solution for the world’s energy future. The LFTR is safe, efficient, economical, and sustainable. But as a friend of mine pointed out, solar and wind technologies will become more viable options in the future as technology grows. He’s absolutely right.

We have been cursed by our prosperity. There has been so much abundance since the end of the Second World War, that we take economic and technological progress as a given. I live a life filled with many more advantages than even someone like J. P. Morgan did 100 years ago.  But the truth is, for much of human history, there was very little change in personal wealth from one generation to the next. A poor peasant was born, lived, and died with almost no chance of living a life above subsistence. We don’t live in a world like that anymore. The idea that one generation wouldn’t be substantially better off than their parents is almost anathema to us.

But, if you were to ask yourself how it is that “the West” became so prosperous, you might find yourself spiraling down into a very deep rabbit-hole. Economists and philosophers have been debating this issue for awhile now, but a few things seem to be agreed upon. Adam Smith, in his 1776 book The Wealth of Nations, laid out a set of principles he thought distinguished rich countries from poor ones. The book is extremely dense, and, try as I might, I’ve never gotten through it all. Smith makes the observation that rich countries have better institutions than poor countries. They are generally economically freer, they value free trade over tariffs, and they are countries that attract and accept immigrants.

Smith was writing in a time when Great Britain (under the infamous King George III) wasn’t exactly a paragon of those virtues. But the United States took these principles and ran with them. It’s why the U.S. overtook the UK as the world’s leading industrial power by 1880, when it had been (only 100 years before) a rural backwater clinging to life on the Atlantic coast.

What’s needed in the energy sector is an innovation boom.We need to develop technologies that will simply out compete fossil fuels. What we need is to hold true to Smith’s observation: free trade, free immigration, and free markets.