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Trumponomics: Supply Side and Protectionism

Darrin Moore Discusses Supply Side Trumponics

Succinct explanation of Supply-side economics and why we should oppose Trump’s protectionism policies by Darrin Moore.

“Darrin is more optimistic about Trump’s economic team then I am, but we can only hope for the best under this administration.” ~ Thomas Martin Salazar

Trump Addresses “The Government Wedge” – Jude Wannisky

Jude Wanniski Wiki

0:40 – A discussion on the Government Wedge. Two components in the wedge serve the effect of keeping the two main players (capital and laber) on the sideline;

  • Taxes
  • Regulations

“Business leaders who visited the Whitehouse have said that often times, regulations are more stifling than taxation … Often times regulations are just crony capitalism anyhow, they are written to tilt the level playing field of the marketplace to benefit the businesses of political donors. Much like how big grocery and big plastic used regulations for proper packaging so they can drive out farmers markets and smaller business.” ~ Darrin Moore

Discussion: Withdrawing from TPP – Trans-Pacific Partnership

5:00 – Darrin starts by citing a claim in a recent reason.com article that scrapping TPP Will Make America Poor Again (Click here for reason.com article). This citation leads up to some common ground of both the author, Shika Dalmia, and Darrin;

“Economic misunderstanding is rife today, even in the article I just excerpted … the author, he too does not quite understand the purpose of international trade and we may consider it a game of quid pro quo.” ~ Darrin Moore

Darrin sharply disagrees with the next assertion by the author;

“In classic mercantilist vein, Trump believes that exports are good because that means you are selling things and imports are bad because that means you are buying things, not understanding that the whole point of exports is to import just as the point of production is consumption. If we keep selling goods but don’t buy anything in return, what would be the point of earning all that money?” ~ Shika Dalmia

Darrin vociferously challenges the author’s claim that the purpose of exporting is to import, rather Darrin claims the purpose of exporting is to turn a profit. In further comparison, Darrin extends the same logic to the purpose of production, the purpose of production is NOT consumption, rather to earn a profit.

A very common sense point, yet often overlooked, in free markets.

“The motives to produce are different than the motives to consume are different and they should not be conflated.” ~ Darrin Moore

Citation of Say’s Law by Darrin, “You have to product X before you can buy Y”.

Say’s Law is named after the 18th-century French classical liberal economist Jean-Baptiste Say, who popularized the notion. Say was an advocate of laissez-faire economics and was heavily influenced by Adam Smith. Say’s Law is frequently misinterpreted as “supply creates its own demand,” which is evidently false.

Digression: Supply Side vs. Demand Side

7:45 – Darrin begins a discussion into capitalistic freedom of choice of how to spend earnings from production, whether earnings are spent on consumption, saving, investing or otherwise. Laid out in this conversation is Darrin’s position of supply side vs. demand side arguments, a comparison of types of capital and his opinion of fundamental differences in progressive (demand side) and conservative (supply side) objectives. Darrin leads in by dissecting the types of capital; Consumable Goods (food), Durable Goods (houses) and Capital Goods (tools).
“The Point of the progressive is to consume, the point of the conservative is to increase real wealth.” ~ Darrin Moore
As Darrin was speaking on this point, I could not help but think of “Rich Man, Poor Man”. If you are interested in a quick timeout for a VERY powerful discussion on wealth!

Back to International Trade – Trade Deficits vs. Trade Imbalance

9:15 – A paradox as stated by Darrin, the people who benefit most from cheap imports are the poor by making available an abundance of “cheap” goods. The paradox lies in creating the incentive for suppliers to move their operations overseas to take advantage of less expensive labor and raw material cost.

The Summary & Takeaway

10:40 – Darrin challenges Trump’s policy of viewing international trade through the lens of one-sided demands and recommends alternative thought while promoting that we should should view the rest of the world not as a competitor, rather as a customer. A fear, stated by Darrin, that he feels Trump is trying to manipulate America’s position with the use of tariffs we can get everything we want and eliminate everything we do not want.

Darrin Moore

Darrin Moore is a christian, author, polymath, and the unofficial librarian of the American conservative movement with deep ties in Michigan politics and education.
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