Donald Trump’s Trade-Knowledge Deficit
Donald Trump's quixotic quest to eliminate the US trade deficit completely misses the point, and shows why public policy should be based on valid economic theory, not gut feelings. If Trump goes down the protectionist path, he will do lasting damage to the US economy.
PARIS – As a longtime champion of liberty and free trade, it is not surprising that the United States enjoys one of the highest standards of living in the world. But unless its policymakers act soon, the US could find itself in the same unhappy condition as my own country, France.
Ever since François Mitterrand was elected to the French presidency in 1981, France has steadily raised taxes, increased public expenditures, and imposed additional layers of regulation. Even governments supposedly on the right, under Presidents Jacques Chirac and Nicolas Sarkozy, pursued socialist economic policies. Consequently, France has long suffered from anemic growth and high unemployment – a perfect example of what can happen when the state intervenes in economic activities.
The downside of government intervention should be obvious to everyone. But that has not stopped politicians such as US President Donald Trump and Marine Le Pen of the French National Front from proposing interventionist and protectionist policies.