In any case, I thought I’d share a few quick thoughts about Trump’s historic win.
The day before the election, the New York Times estimated Trump’s chance of winning at 16% – but compared to most other “pundits,” I think they were being kind. But history had a way of making history. People voted for Trump because despite Trump!
I agree with pugster that Trump’s win is good for the U.S., good for China, and good for the world. Here are some reasons.
Trump’s win will bring a more peaceful world.
One of my biggest problems I have with Barack Obama is that despite receiving a Nobel Peace Prize in 2009 (yes I and others had already mocked the Nobel Prize and associated propaganda about Obama standing for “world peace”…), he went on to become a pretty hawkish president.
Trump – by questioning the basic presumptions of a blanket alliance system from the get-to – of looking at influence in a zero sum way – is finally I think nudging the country toward the right direction again.
In Trump’s election night victory speech, he said:
I want to tell the world community that while we will always put America’s interests first, we will deal fairly with everyone, with everyone. All people and all other nations. We will seek common ground, not hostility, partnership, not conflict.
No non-sense about America promoting freedom, of America on the good against evil, of American on the right side of history… Things we would have heard had it been Clinton making the speech…
Of course, the interests that have captured Obama no doubt may capture Trump’s administration , whether Trump likes it or not. But what gives me hope is that the fundamental anger shown in this country – of let’s take care of America first before meddling across the world – resonates deeply with Trump.
Will America turn protectionist?
While Trump can channel that anger in a an unproductive war and engage in trade wars with China and others, I don’t think he will.
Trump will come to realize that even if China were artificially keeping its currency low (the U.S. gov’t says it is currently not, but Trump and others say it is keeping it artificially low, but other says it is actually keeping it artificially high), it makes no sense to talk of it as “manipulation” if only for the fact it has been doing it for decades.
The fear of “currency manipulation” is that countries would – through short term monetary intervention – game each other for short term competitive advantages in the balance of trade – and (sometimes) perhaps a longer term structural advantage by wiping out specific segments of industries abroad.
But keeping its currency low over decades does would not give such advantages because the cost China must eventually incur in importing goods would soon rise. Rather than gaming for trade advantages, China is actually more correctly characterized as globally subsidizing / benefiting the world’s consumers.
If Trump must think about raising tariffs against China to bring jobs back, he should think just exactly which relatively poor paying, long hour jobs he plans to bring back?
Many of the trade deficit counted against China actually masks U.S.’s deficit with many of its closest allies.
Consider the case of the iPhone. As I had previous discussed, even though every iPhone is putatively “made in China,” for every iPhone that is made, China contributes only a few dollars of value. While every iPhone contributes some $200 of trade deficit “in favor” of China, the bulk of the value of that deficit actually goes to Japan, Germany, and S. Korea, not China.
If Trump begins to focus on bringing just the good paying jobs back from around the world, Trump will have to confront the issue of how so many of America’s competitors from around the world benefit from lower employment costs as a result of their governments paying for their workers’ healthcare and education.
Can GM compete against Toyota fairly when Japan offers its workers free universal healthcare? Can ford compete against Volkswagen when Germany offers both universal healthcare and college education?
Sure – many other nations have higher taxes per capita … but at least most those taxes go back to directly benefit their citizens. Compared to the U.S., which spends some 16% of its total budget on defense/military, other countries (see, e.g., U.K. and Japan) can afford to spend much more on infrastructural, healthcare, education, and social security than the U.S.
Toward a more prosperous America and a more peaceful world
So my hope is that despite the vitriolic reputation of Trump, Trump by wining the president, by feeling American workers’ plight, will think outside the box and begin a deep re-examination of America’s global role and find ways to re-invent in itself and also make the world also a more prosperous and peaceful place.
So Nobel Committee – the one that gave the peace prize to the Dalai Lama, Liu Xiaobo, and Barack Obama – if Trump does attempt this, are you going to give Trump one???