Trump’s first 100 days: an assessment…the short version

Will Trump step up to the plate and make the case for a lean federal government to the American people?

· Trump thinks he’s the CEO of America Inc., and thus his job is to “protect” American manufacturing and jobs from imports. He believes his mission is to make tariff “deals” with other nations.

· Trump asserts America is being “ripped off” by imports.

· Trump claims that the trade deficit should be eliminated in favor for “fair and balanced” trade

Trump believes nations are “traders” not businesses and individuals. In other words, Trump thinks that trade is a nation/state phenomenon rather than a voluntary transaction between economic actors. American businesses pay the tariffs on foreign goods they import. Foreign companies do not pay the tariff unless American importers negotiate lower prices with overseas suppliers to offset the tariffs. No matter who pays tariffs, they disrupt the international flow of goods and services—an antimarket policy—and prevents American consumers from getting the best possible deals for themselves, the essence of economic freedom.

Trade deficits are irrelevant to American consumers and businesses. We all have “trade deficits” with our supermarket, e-commerce sites like Amazon, etc. We buy from them, and they do not “buy” from us. We use the income we earn to purchase the goods and services we prefer to improve our lives even if our purchases are made by overseas producers. This is the “beauty” of having a free market.

One of the strengths of the US is that it is one gigantic free trade area. All consumers would benefit if free trade were embraced by governments around the world. In the meantime, Trump should call for the US to eliminate all trade barriers and advocate abolishing the corporate income tax, making America the freest economy on the planet.

Do Trump and his advisors understand the basics of a free market economy?

· Instead of “channeling” Hoover’s horrendous tariff policies and Nixon’s call for lower interest rates to stimulate the economy for his 1972 reelection, Trump needs to “channel” Thomas Jefferson, Calvin Coolidge, JFK, Jimmy Carter, Reagan, Bill Clinton, Frederic Bastiat, and Peter Drucker, among others.

Trump should make a national address from the Oval Office or other venue and have his speech writer incorporate the following concepts to make the case for free enterprise and limited government.

Thomas Jefferson, in his first inaugural address asserted: “a wise & frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, & shall not take from the mouth of labor the bread it has earned.”

In other words, cut individual income taxes to zero.

On government spending, Jefferson observed: “To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical."

Freedom of conscience is fundamental human right. Virtually every federal government outlay violates someone’s conscience. Therefore, government spending must be confined to the enumerated activities outlined in Article I, Section 8. This would not resolve the freedom of conscience issue completely, but it would be a major step in ending “unconscionable” spending.

Jefferson also observed what the foundation of governing should be: “Peace, commerce and honest friendship with all nations; entangling alliances with none.”

Ending foreign aid and military aid would end the plunder of the American people. Nations must use their citizens’ incomes to protect them from attacks and social programs, if they want to maintain a welfare state.

In the 20^th century, President Coolidge claimed: “Unfortunately the Federal Government has strayed far afield from its legitimate business. It has trespassed upon fields where there should be no trespass. If we could confine our Federal expenditures to the legitimate obligations and functions of the Federal Government a material reduction would be apparent. But far more important than this would be its effect upon the fabric of our constitutional form of government, which tends to be weakened and undermined by this encroachment.”

Article I, Section 8 must guide federal spending, not the statist ideology that the political establishment has supported for the past 100 plus years.

Democrat President Kennedy called for tax cuts because: "A tax cut means higher family income and higher business profits and a balanced federal budget.... Prosperity is the real way to balance our budget. By lowering tax rates, by increasing jobs and income, we can expand tax revenues and finally bring our budget into balance."

Kennedy was making the case for supply-side tax cuts. However, we don’t need more federal revenue. We need less government spending.

Trump should acknowledge Democrat President Carter’s deregulation polices that helped the economy boom in the 1980s.

Trump should put his foot on the deregulation pedal to accelerate less burdens on business activity. This would increase jobs and profits, the best stimulus for more prosperity.

Trump should quote President Reagan’s insight: “The most dangerous sentence in the English language: I’m from the government and I’m here to help you.”

Trump should make the case that government does not “solve” problem but maintains them to increase its power.

In his 1996 State of the Union address President Bill Clinton asserted: “The era of big government is over.”

The federal government has grown by leaps and bounds during the past three decades under both Democrats and Republicans in the White House. Trump should state it is time to rein in Leviathan, because the federal government is spending like the proverbial drunken sailor and not adhering to Article I, Section 8.

Peter Drucker, the long-time management professor and business consultant who devoted the last twenty years of his life advising nonprofit organizations, wrote in the WSJ, December 19, 1991, “… government has proved incompetent at solving social problems. Virtually every success we have been scored has been achieved by nonprofits.” In concluding his essay, Drucker called for the replacement of welfare bureaucracies with nonprofit organizations.

Trump needs to cite examples of the thousands of great nonprofits doing magnificent work in their communities. I can provide him with a list of nonprofits that do not accept government aid and rely on the quintessential American value—voluntarism and philanthropy.

The Federal Reserve is the engine of inflation and causes the boom-bust cycle. Trump wants the Fed to lower interest rates. Artificially low interest rates caused the dot-com bubble, the housing bubble and the recent run-up in consumer prices, stock market prices, real estate prices, etc. The Fed should stop manipulating interest rates and stop creating money.

Trump is channeling LBJ and Nixon about the Fed. LBJ opposed the Fed increasing interest rates in 1965, but interest rates were raised to fight inflation despite the president’s criticism. Nixon was luckier. He had his good friend Arthur Burns at the helm of the Fed who gunned the money supply to “stimulate” the economy in time for Nixon’s reelection campaign in 1972.

The fiat dollar should be made as gold again, which would prevent the Fed from money printing. Better yet, end the Fed and transfer the responsibility of maintaining the purchasing power of the dollar to the US Treasury.

Lastly, in his 1850 classic The Law, Frederic Bastiat’s irrefutable insight undermines every left-wing assertion that collectivism is the best way to organize society: “Socialism, like the old policy from which it emanates, confounds Government and society. And so, every time we object to a thing being done by Government, it concludes that we object to its being done at all.”

Trump can bury once-and-for-all any justification for big government and thus promote the principles of limited government, free enterprise, philanthropy, and a peaceful foreign policy, if he believes in a constitutional republic as outlined in Article I, Section 8.

Does Trump support the principles of the “Old Republic” or he is another establishment politician who thinks big government wielded by him will Make America Great Again?

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Dave Campbell and I discuss MAFI on the Clarity and Chaos podcast.

Col. Mike and Dr. Mike and I discuss Trump and his promises on the National Security Hour.

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Restoring free enterprise, medical freedom, and a constitutional federal budget.

The insufferable Jim Cramer reveals his economic ignorance in a recent CNBC rant.

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Joseph Cotto and I discuss the economy on his podcast.

Tom DiLorenzo’s pamphlet, Axis of Evil, is now available at the Mises Institute.

Order a free copy of Rothbard’s money and banking classic monograph. Or, you can read it online here.

My December 10 talk on medical care.

America’s debt bomb.

Bob Murphy interviews Dr. Keith Smith of the Surgery Center of OK.

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Murray Sabrin, PhD, is emeritus professor of finance, Ramapo College of New Jersey. Dr. Sabrin is considered a “public intellectual” for writing about the economy in scholarly and popular publications. His book, The Finance of Health Care: Wellness and Innovative Approaches to Employee Medical Insurance (Business Expert Press, Oct. 24, 2022), and his other BEP publication, Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide (October 2021), provides decision makers with tools needed to help manage their businesses during the business cycle. Sabrin's autobiography, From Immigrant to Public Intellectual: An American Story, was published in November, 2022. He is also the author of Why the Federal Reserve Sucks.