Donald Trump scares me. The real estate mogul, author, television star, and potential Republican presidential candidate has views on economics and foreign trade that could prove to be disastrous if he were to prevail on November 6, 2012.
"Everybody is ripping us off," he likes to say. It's become his political mantra.
Last Friday he told Rush Limbaugh:
"I look at the way China is just ripping us off, I look at OPEC the way they are ripping us off with the oil prices. . . . We lost last year-let's call it 'lost'-$4 billion with Colombia, fourth largest country in Latin America, $4 billion. With China this year, Rush, we're gonna lose $300 billion, and that wouldn't happen if I was there."
Likewise, he told Sean Hannity:
"Because what is happening is, if you take away $300 billion-where China is ripping us [off]-and you take away Colombia, and you take away virtually every nation in the world, who is making a huge-let's use the word profit on the United States-when you start equalizing that . . . the numbers aren't as bad as what you are seeing."
The U.S. trade deficit with China was nearly $300 billion. True, China manipulates its currency for economic advantage, but so does the United States. Neither country pursues a healthy monetary policy. When it comes to trade, Americans like to buy Chinese products (think low prices at Wal-Mart). Were those Americans ripped off? What about the woman who bought shoes from France and the college student who bought a computer from a Japanese company? Were they ripped off, too? Trump told Limbaugh that he sold a building to a Chinese man for $33 million. Did Trump rip him off? Is international trade nothing but a series of multi-cultural rip-offs?
How would Trump deal with the Chinese? He'd slap a 25 percent tariff on their products. Doesn't he remember Republican President Herbert Hoover? Hoover also campaigned on a tariff theme and signed the devastating 1930 Smoot-Hawley Tariff bill. "The new law made sense on an emotional level," says Amity Shlaes in The Forgotten Man. "Still, for the general economy the law was bad news." Indeed, foreign countries retaliated and worldwide trade declined 66 percent by 1934.
If he somehow found himself in the White House, Trump could prove to be a modern day Herbert Hoover with a real chance of history repeating itself.