Trump Doesn’t Understand Economics

Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi had as many names as he had schemes to bilk people out of their money. You probably know him as Charles Ponzi and, yes, the “Ponzi Scheme” was named after him. Many of Donald Trump’s fiscal moves can be traced back to this famous Italian conman.

Let’s mix in some words here from Plato’s character Phaedrus. “Things are not always what they seem. The first appearance deceives many. The intelligence of a few perceives what has been carefully hidden.” If just one person had seriously questioned Mr. Ponzi early on, he would have never been able to get away with his plot to defraud people out of their life savings. Sooner or later, someone must pay up.

Plato also warned us that we shouldn’t judge a person, or an idea based on what we first think. We can go from 400 B.C. (Plato), to the 1900s (Ponzi), to 2008 (Bernie Madoff), to 2016 (Donald Trump) and see con artists trying to convince us that we are going to benefit from their special ruses.

One of Trump’ tricks is a spontaneous burst of an opinion during one of his rallies that then gets baked into his routine, that then becomes policy. The game of chance that this man is playing with the world-wide economy is treacherous.

Donald Trump probably had a difficult discussion with someone on his team who disagreed with him on his tariff ideas. He caught everyone else in the White House off guard by blurting out his decree in a meeting. Without any details, he simply peed on the tree to claim ownership of his turf on this subject. He said, in a forceful kind of disagreeable manner, that the United States would be placing a 25% tariff on steel and a 10% fee on aluminum. And the stock market freaked out.

Rather than weighing the pros and cons to develop a logical argument for doing this now, when the Fed is about to raise interest rates, and explaining his position to the American public, Trump just blasted out his new “plan,” which seems devoid of any sane rationale.

Much like your drunk Uncle, who sits on the front porch railing against all our products coming from other countries, there is little desire by the Donald to understand how and WHY this has happened. Rather than trying to change a worldwide economic trend with a RULE, Mr. President, why not know the side effects of your “remedies” before making everyone in the country swallow your bitter pill? It’s ironic that the cure for the “rest of the world taking advantage of us in trade” is a rule. Deregulating has taken on this “for us only” status. Strange.

Forcing protectionism on the rest of the world might make Donald Trump feel good personally, but if it leads to trade wars we will all have to pay. Consider Trump’s “clean coal.” It’s a chemical myth to help an industry of 51,000 workers when wind energy is already supporting 100,000 jobs in the renewable fuel industry. Then there’s the Donald’s plan to protect 100,000 steel jobs, while hundreds of thousands of building projects will have to cut jobs to pay for the increased cost of metals. America doesn’t make enough steel and aluminum to provide resources for all the ongoing projects. And while we scramble to build and reopen plants, the President’s measures plunge us into inflationary turmoil.

The weekend brought early sparks of a retaliatory trade war with the European Union’s discussions of taxes of their own. Then Trump tweeted: “If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

Once again, our President has decided he knows best and his actions will make everything cost more. And who must pay more? The people Trump and Congress just awarded a big tax cut will now get to pay more for everything we buy.

Donald J. Trump doesn’t know anything about economics. He’s the big orange kid who has been living in a bubble his whole life. He talks with other rich men who breathe that same uninformed air of how economies work. Trump is in violation of one of the most important aspects of our economic model. Like a balloon, pushing too hard on one side will force a change on the other. When you make changes, you should do so gradually, measure whatever fallout takes place and then make appropriate adjustments.

What Donald Trump has miscalculated is that no one in the world respects him or cares about his insane attitudes and beliefs. They won’t even blink when given the opportunity to make him look bad. The will add tariffs to make it harder for him to bully them. And when Trump has his next corporate CEO meeting at the White House, those white-collar, button-down leaders will have no problem explaining it all to him. In their minds, this will be a rich payback for all the tough love they have received from their public board of directors. Payback is a bitch, Donnie.

Ponzi was an unbelievable scheme, but people fell for it. Bernie Madoff was able to trick the richest people in New York. And Donald Trump is still fooling 35% of the country. The bad news is all of us will have to pay for his Trade War, while he will continue to promise more unbelievable benefits.


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