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August 14, 2017

Principles, Personalities and free trade

Terry Paulson puts an argument below that I mostly agree with but his comments on free trade are naive.  There are three reasons why Trump's restrictive attitudes to trade are right

1). He's got the voters behind him.  So opposing him on that would be an electoral disaster.  He largely won office on his skepticism about the "exporting" of jobs.  He has a degree in economics and he has held his view on trade from long before he ran for political office.  So his views are well-considered and of long standing.  One must consider that he is on to something.

2).  The major argument in favour of free trade is its economic efficiency:  It delivers lowest prices.  But there are also non-economic arguments to be considered. Economics is not everything.   Economists have long recognized a variety of those arguments: The infant industry argument, the national security argument and the "Australian" case.  None of those arguments are at issue in the present case but the lesson should be learned that economics-only arguments have long been recognized as too simplistic even by economists. In Trump's case, he is arguing that social stability is being risked by too-rapid industrial change and that change should therefore be reined in and partially reversed.  And if a conservative cannot oppose change and argue for stability, who can?

3). Even the economic argument is shaky and may only apply when all other things are equal.  The strongest argument there is the 19th century experience.  During the 19th century, America prospered mightily behind HIGH trade walls.  There was nothing approaching free trade then. Might not a similar prospering happen again under Trump?  Given the surge in employment that has already taken place since his election, it looks like that is in fact already happening.  How embarrassing to many it will be if Trump's "dumb" policies deliver a win-win:  Prosperity plus stability!

With Republicans in control of the executive and legislative branch, critical things can and should get done. Should Republican principles be more important than presidents in guiding our policy priorities in Washington? Certainly.

US Senator Jeff Flake from Arizona has just published a controversial new book, Conscience of a Conservative: A Rejection of Destructive Politics and a Return to Principles. Although some question Flake’s own priorities and voting record, he calls for putting principles ahead of personalities. Losers don’t legislate, but legislation must serve a purpose. He writes, “If this was our Faustian bargain, then it was not worth it. If ultimately our principles were so malleable as to no longer be principles, then what was the point of political victories in the first place?”

Like many conservatives, Flake believes that Trump appointed an exceptional Supreme Court justice. His positions on cutting regulations and initiating a tax policy that lowers rates and broadens the base are easy to embrace and support. But Flake feels that Trump strays from conservative principles on curtailing free trade. Free trade serves our citizens, our businesses, and keeps important allies in our trade orbit in an expanding global economy.

Republicans have lost in elections when they stray from the principles that guide them. In 2001, President George W. Bush came into the Presidency and pushed for “No child left behind” and a prescription drug entitlement plan. He promoted his “caring conservative” version of bigger, better government, and the principle of smaller government was pushed aside. In the mid-term elections, the GOP lost the Senate.

Our Founding Fathers wisely built checks and balances into our Constitutional structure. It’s time for Republicans in Congress to assert their role and let Republican principles be their primary guide. They should support and work with Trump whenever they can. They should work with Democrats willing to build on common ground, but they should not follow Trump where he departs from what we stand for. Winners legislate; it’s time they assert their priorities.

In the coming months, I will focus on the six primary principles that California Republicans have said unites them: smaller government and less government regulations; lower taxes on small businesses and individuals; a strong military and homeland security; sustain the American Dream through personal freedom and responsibility; promote educational excellence through school choice; and support a free-enterprise, free-trade economy. It’s time Congress and President Trump get busy delivering on what matters most.

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