Checking Up On Trump

May 13, 2016

Our choices are being whittled down to the two oldest, least liked presidential candidates in history. One has a history of misogyny, bankruptcy and xenophobia while being accused of fraud in civil court. The other might be indicted on criminal charges during the campaign.

This is not so good.

The polls tell us the electoral college swings in favor of Hillary Clinton. The math would seem to bear out that notion.

But the election isn’t tomorrow and polls involving Donald Trump have been less than stellar since he first announced. In fact, it’s Trump who has wrapped up his party’s nomination while Clinton continues losing primaries to Bernie Sanders.

Since Trump is the only real nominee so far, let’s take a look at how he’s doing on his signature issues. He occasionally drifts back to reality but in a recent interview he said that yes, he’s going to do the things he’s been claiming he will do.

That means he thinks he’s going to build a wall on our southern border and, let me tell you, believe me, it will be an awesome wall. He’ll make Mexico, who he intends the wall to punish, pay for it. If they don’t, he says, he’ll slap big tariffs on products made in Mexico for American companies and then sold in the U.S. Like, for example, automobiles, tons of automobile parts and myriad other products.

That would violate the North American Free Trade Agreement (NAFTA), which concerns Trump not at all. Nor is he concerned that thousands of businesses in Mexico, the U.S. and Canada were created as a result of NAF- TA to comply with NAFTA.

One other thing — presidents can’t create or raise tariffs. Congress does that.

He also says he still plans to deport 11 million or so illegal immigrants. The business communities that hire them will want to have a conversation with Trump about that. Plus, there’s the added complication of not knowing who they are or where they are.

There’s even less chance he’ll succeed in banning Muslims from entering the U.S., another of his promises. Nor will he be able to undertake surveillance of Muslims already here. There is this document called the Constitution that will allow neither, and the courts have pretty consistently agreed.

Trump has also claimed he will renegotiate trade deals with China because they are “absolutely killing us.” That begs two questions. First, why would China agree to such a renegotiation? Second, why would anybody be willing to make a trade agreement with us in the future?

In general, Trump believes everything is a zero-sum game in which there must be an absolute winner and absolute loser or losers; it never occurs to him that both sides can win, so he never approaches any issue that way.

He comes from a background of making real estate deals with a fairly simple template. If the deal is successful, everybody makes money and is happy. If the deal flops, Trump tries to negotiate with his creditors to pay them less than 100 percent of what they’re owed. If that doesn’t work, he declares bankruptcy, as he’s done four different times with failing casinos.

The court then forces the creditors to accept less than 100 percent.

It doesn’t work that way with American trade deals or credit.

Renegotiating our debt obligations, as Trump has suggested more than once before backing off more than once, sounds appealing for a minute or two, then not so much.

He doesn’t seem to understand the nature of our debt and to whom we owe the money.

China, the target of his anger and rhetoric, owns about 7 percent of our debt. The vast majority is owned by us. That’s right, about 67 percent of our $17 trillion debt is owed to Americans through pension systems, state investments, mutual funds, the Federal Reserve and other financial instruments. Trump’s debt reduction fantasies mean he would be negotiating money away from his own citizens.

Despite all the claims that the sky is falling, the rest of the world still sees the U.S. government as a good investment primarily because we have always paid our debts. The world economy still revolves around the United States and the dollar.

If that stops, the Great Recession will seem like an insignificant glitch.

There would be no point at all in investing in U.S. government instruments if President Trump decides he can negotiate away your return. Nor would there be any reason to become involved in a trade agreement if President Trump can simply change it whenever he pleases.

Trump’s vulgarity, insults, exaggerations and extra-legal plans don’t trouble his supporters in the least. But his abject ignorance of the world’s economy, and our role in it, should concern even them. In his world of winners and losers, his stupidity is going to make losers of us all.