A Dose of Reality

Mitt Romney gave his stop Trump speech yesterday and the earth is still turning today. Surprisingly Trump's response was relatively subdued, by Trump standards. Probably because he recognizes that Romney has no credibility with most Americans.

There is no point in analyzing last night's Republican Debate because it was the same as the last one. Nothing new is being learned and you should skip them unless you enjoy reality T.V.

Cruz and Rubio are spinning their wheels because they are trying to out Trump Trump, it's not going to work.

John Kasich is trying to gain momentum by stressing his credentials and long history of political success but it is not penetrating the fog of frustration that Trump is so deftly exploiting.

One of Trump's regular themes is our trade deficits and the points are valid. He says he loves the Chinese and Mexican people but their leaders are smarter than ours. He now also mentions Vietnam but doesn't indicate a fondness. Maybe he does like them but what his supporters hear is a bashing of these countries in the same vain that was unleashed on the Japanese in the late 1970's and 80's. What Trump fails to explain and what his opponents seem incapable of articulating is that the situation is far more complex than he portrays.

Our trade policies after World War II became driven by the Cold War. We gave away economic dominance in favor of military bases which insured our ability to strike quickly and protect our strategic alliances. You can debate the wisdom of this and I do but those are the facts. After the Cold War we made no real adjustments except to shift from military stragegy to executing trade deals that benefited major international corporations.

Free but fair trade should always have been our mantra but that only serves the best interests of the general population and not the minority of giant shareholders who want as much money as they can grab.

Case in point is the announcement that Carrier is leaving the State of Indiana to relocate those facilities to Mexico. The Governor of Indiana is attempting to soften this and does seem to be making limited progress, saving some higher management positions and recouping tax abatements and education training funds. Carrier isn't leaving because they can't make a profit in Indiana, it's because in Mexico they can get away with paying workers $3.00 an hour and have no significant regulations, including safety, to worry about. It's the same reason all American companies who have done this and will do this in the future take the action. They don't believe in a social compact with the communities and employees who made them successful to begin with. It is strictly about making the biggest profits possible. Profits that will eventually erode in time when the United States ultimately is left with only two classes of citizens, the economically deprived who won't be able to buy any of these companies products and the very well off who, though extremely rich, cannot sustain a viable economic model.

Trump is selling the idea that as President he can do something that Constitutionally he can't achieve. Formal trade agreements require Congressional approval. Taxation and any tariffs on imported goods require Congressional approval. Congress is an equal branch of government and it wields the power of the purse, it will not bend to President Trump just because he says so or has an (R) after his name.

Trump could make valid points on trade except his flippant attitude on trade wars should give everyone pause. Although we are the most important marketplace in the world we would over time begin to suffer on many levels. Weaker countries when confronted with a trade war become unstable in all sectors. That instability leads to civil conflict and ultimately military confrontation.

There used to be a phrase commonly recited about China, "the sleeping giant." The giant is awake and is a nuclear power with a modern military and the largest navy in the world. A study was released last week that shows China now has more billionaires than the United States. China doesn't want a military engagement with the U.S. and it would not be their first response to a trade war. They would unite large portions of Asia into a trade coalition to confront the West and then if necessary flex their military muscle to demonstrate their ability to project power. Then of course there is the little matter of all that money we've borrowed from them to fight stupid wars.

To quote former Mexican President Vincente Fox, "I'm not paying for that fucking wall." Well said and absolutely true there is no way a President Trump could force Mexico to pay for his HUGE wall unless Congress agrees to slap Mexico with substantial tariffs on Mexican made products and earmarks those tariffs for the wall. It will never happen. He might peel ten billion dollars out of the Defense Budget to build his wall but it will be all American tax dollars and Congress will eviscerate him on the floor of both houses.

I'll say it again we need free but fair trade and that starts with holding American companies accountable for their own actions. We hear a lot about how horrible our corporate tax rate is but they fail to mention how complex the tax code is and how much gravy is poured on the plates of our major corporations in the form of loopholes. It is a fact that some of the biggest companies in the U.S. pay zero in taxes. I am willing to support reducing the tax rate if the tax code is completely rewritten and corporate welfare is ended. Think they'll do it?