Trump sense

Marcus L’Estrange writes: Re. “How will the ‘small-government’ right respond to a high-spending Trump“? (yesterday). This article shows how little they knew of Trump’s campaign and his claim regarding unemployment figures. President-elect Donald Trump consistently stated during his campaign that real unemployment in the US was well over 20% or even 25% rather than the official Bureau of Labor Statistics (BLS) U3 figure – now at 4.9% for October 2016. In May Trump stated: “We have tremendous deficits. Don’t believe the 5 per cent. The real number is 20%. The United States is dying from within, its domestic infrastructure is crumbling and successive administrations have wasted $5 trillion in the Middle East instead of using the money to create jobs and prosperity at home.” Trump’s successful candidacy shows that many Americans agree with the new President that the official unemployment figures are considerably under-stated. Surely there is a clear lesson for Glenn and Bernard and Australian politicians in Trump’s success but considering their gullibility I doubt they will learn.

On protectionism

Geoff Edwards writes: Re. “Trump-ish protectionism the lazy option for Turnbull, Shorten” (yesterday).

Correlation is not causation, Bernard Keane. Australia’s recent apparent prosperity is not a consequence of free trade but derives from a massive run down of stocks of natural resources (minerals); and a massive run up of debt (any population can appear wealthy if banks lend them enough). By contrast, its prosperity from federation until the 1980s was built under a protectionist umbrella. The weakness in your argument lies in the terms “uncompetitive” and “unviable”. Competitiveness is not absolute but is an artefact of differences in the value of currencies and cost structures in each country. An industry can be rendered uncompetitive overnight through a whole range of factors such as exchange rates that have nothing to do with the efficiency of its plant or workforce.

If free trade in goods is beneficial on first principles, then presumably the same principle applies to trade in services, labour migration and foreign investment. If Australia enthusiastically opens access in all four sectors, then what industry will generate our future economic surplus? What principle would allow you to place a limit on outsourcing every productive activity, even policy formulation, to a country with cheaper labour costs?

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.

 

Peter Fray
Editor-in-chief of Crikey

JOIN NOW