The Trump Administration apparently sees itself as the defender of global capitalism.
But in the immortal words of Lisa Simpson: “If you’re the police, who will police the police?”
This second Trump Administration has been a smorgasbord of bad, anti-capitalist policies, like price controls and tariffs. Speaking at Davos a few weeks ago, Commerce Secretary Howard Lutnick told the wealthy and elite crowd that “With President Trump, capitalism has a new sheriff in town.”
Take that, Adam Smith! You and your invisible hand.
Capitalism is already policed by market forces. If anything, we need to protect our freedom and private enterprise from government intrusion and corrupt actors.
But that’s not what Lutnick meant. Instead, he recited the tired MAGA trope of putting American citizens first, even if much of what the Administration has done is to Americans’ detriment.
“For decades, countries were told there was only one acceptable model,” Lutnick added. “They were forced to depend on global supply chains and foolishly trust that global institutions would have their backs. That model put America dead last, and left countless others weaker as well.”
Capitalism, or free market economics, is awesome. It’s the single greatest creator of opportunity, wealth and freedom the world has ever seen. It has done more to lift people out of poverty and raise the standard of living around the world than anything else – and it’s not even close.
America has been a primary beneficiary of that, which makes Lutnick’s claim that the U.S. is “dead last” so immensely stupid.
The American middle class is so wealthy it’s crazy. Did you know that an annual salary of $60,000 a year, which is just below the U.S. median salary in the U.S., is in the top 5% globally?
America’s economy is the envy of the world. Of course, there are ups and downs to the American economy and there is no system that would be without inequality and winners and losers, but there is no objective measure where the U.S. is “dead last.”
Trump has for years railed against the “globalists,” who he blames for trade deals that “ripped off” Americans. He remains obsessed with America’s trade deficit and is convinced that because Americans import more products than we sell abroad there must be a problem.
But there’s not.
Because America’s standard of living is so high, it’s significantly cheaper to import products, especially ones made with a relatively low level of skill, from other countries. There’s a reason why so many products we see are made in Taiwan or Mexico. Instead, Americans are a highly-skilled, highly-educated workforce with significantly higher incomes that we use to purchase low-priced products made elsewhere. It’s a win-win scenario and to undo it we’d have to erode our quality of life.
Trump’s plan has been to spur domestic manufacturing by driving up prices on foreign goods through tariffs, which has not necessarily cut demand for said products, nor addressed the underlying reasons why it’s so expensive to manufacture in America. Instead, his approach has made everything more expensive while not necessarily boosting manufacturing jobs.
It also hasn’t significantly reduced the trade deficit, which is just around the same level as it’s been over the past decade. The deficit was at its largest around when Trump came into office and announced a bunch of tariffs, and while the deficit has fallen from there it’s near where it was when Trump took office this time.
Though Trump supporters get mad at me when I bring all this up, there seems to be a big disconnect between theory and reality. In theory Trump’s policies are working and he is putting Americans first; in reality the exact opposite is happening.
No one should be surprised. Trump campaigned on many of these policies and has surrounded himself with people equally tied to sham economics, like right-wing pundit Steve Bannon.
In a particularly telling anecdote published by Axios recently, former MAGA Congressman Matt Gaetz, Trump’s first Attorney General pick this term, described Bannon’s presidential campaign plans as merging “the foreign policy of Rand Paul with the tax policy of Elizabeth Warren.”
Got it. So Bannon plans to emulate Oakland Mayor Barbara Lee?
It’s not too surprising that Trump recently told Warren on a phone call that he’d work with her on a 10% cap on credit card interest rates, which is an idea that is silly and abandons the concept of the free market.
It’s a sharp departure from the conservative coalition that quite successfully steered the Republican Party for decades.
“The Republican Party has drifted so far away from limited government, free markets, and federalism, which are the bedrock of any conservative thinker,” North Carolina Sen. Thom Tillis told Politico recently.I can hear the readers screaming RINO now, but they would still struggle to provide any evidence that Tillis and I are wrong. But why are they so upset? Isn’t this what they voted for?
Free-market policies work and there’s a very long trail of proof. By contrast, there’s very little evidence that progressive policies, like those of Trump, Warren and Bannon, are a better option.
Progressive policies are just as bad coming from a Republican as they are from a Democrat and Americans should be alarmed that we’re now governed by two progressive parties – there’s no one left to police the police.
Matt Fleming is an opinion columnist for the Southern California News Group. Follow him on X at @flemingwords or email him at flemingwords@gmail.com.
