Monday, January 23, 2017

Protectionistic Policies Will Not Make America Great Again!

Rising consumer spending is based largely on the expectation that Trump will make America great again. Long-term economic growth, the kind that boosts job growth and incomes, requires investment, competitive advantages, and cutting edge education. Economic gains based on rising consumer confidence and spending over the short-term won't accomplish that.

Rising interest rates and dollar will ultimately make US good more expensive in the global economy. This will weigh on economic growth and aggravate a trade deficit already already hemorrhaging red. The promise of job creation by forcing companies to manufacture more expensively at home or pay will fall on deaf ears as the global economy continues to weaken.

A trade war is coming because few study history. The world of globalization, a system designed to raise standard of livings for all based on competitive advantages of each nation will likely be temporarily replaced by protectionism. The majority that expects Trump to deliver will soon be disappointed by consequences of protectionism (tariffs and border taxes) on global and domestic economic growth. Those that have read The Memoirs of Herbert Hoover, the less than 1% that view traditional education as an exercise of verbal monotony and standardized testing that teaches predominantly memorization skills only, will not be surprised. Unbeknownst to the majority, the US has tried protectionist and isolationist policies will catastrophic consequences. Hoover demanded his memoirs be made available to the public so future generations would not repeat the same mistakes. He would likely be extremely worried if alive.

Headline: Trump Abandons Trans-Pacific Partnership, Obama’s Signature Trade Deal

WASHINGTON — President Trump formally abandoned the Trans-Pacific Partnership on Monday, pulling away from Asia and scrapping his predecessor’s most significant trade deal on his first full weekday in office, administration officials said.

Mr. Trump sharply criticized the partnership agreement during last year’s campaign, calling it a bad deal for American workers. Although the deal had not been approved by Congress, the decision to withdraw the American signature at the start of Mr. Trump’s administration is a signal that he plans to follow through on promises to take a more aggressive stance against foreign competitors.



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