Trade is the great divide for Trump

The focus of this blog is economics from Wall Street to Washington and its effects on the world’s economy. That said I will use this Saturday post to dip a toe into American politics.

While I call myself a conservative when it comes to monetary policy, I’m more libertarian in other policy matters.

With that said, the Republican primary is beyond words. The overt and covert actions by the principals involved as well as back-room operatives against the Donald Trump candidacy is something I’ve never seen in over 35 years of covering the news.

The overt conspiracy by Sen. Marco Rubio telling his Ohio followers to vote for Gov. John Kasich to thwart Trump from getting the delegate number needed to grab the nomination, is bizarre. The back-room operatives and their cash are working to have a brokered convention in order — by subterfuge — to defeat a Trump candidacy.

What these Republicans don’t get is that their actions are the fuel that is driving Trump to the nomination. The vast majority of Trump backers and the millions who could never vote for Hillary Clinton are looking at the Trump character assignation as a badge of honor that their choice is right.

If the insiders — who have received billions in profits over the last eight years by Washington’s monetary actions, while Trump supporters have seen their own wealth fall — don’t want a Trump candidacy, then he must be for me. Now whether that is true is another topic, but for now, Trump’s strength is being the anti-candidate.

Republican operatives are shaping the narrative now by attempting to make backing Trump a personal defect to the individual. As in “You’re not really going to vote for Trump are you?”

It would not surprise me in the least if Republican operatives were behind the melee that occurred in Chicago at the Friday night Trump rally. They are hell-bent to blow up a Trump candidacy and give Clinton the White House. That’s how deep the hatred is with the backers.

As I’ve said it’s a bizarre situation.

So how has the Trump economic plan emboldened middle America, while alienated the Republican money men and women? TRADE.

His rhetoric of smashing these free-trade agreements and placing tariffs on goods coming across the borders is the touchstone issue.

Millions of Americans have seen their quality of life ruined by a good-paying factory job leaving the country to parts unknown in order to cut costs. Theses Americans have suffered with taking menial part-time work at a Wal-Mart or McDonald’s for minimum wage and no benefits as a result of the Wall Street-backed free trade agreements to bolster profits trade pacts, which do nothing for the Trump backers.

These same Americans have watched their fortunes over the entirety of this century rise and fall with no consequences to the culprits who have profited from their losses.

Internet bubble popped, housing bubble popped, businesses have left or closed, if they still have a job, their salary has not risen in the last 15 years to any appreciable level.

Trade is the driving force that polarizes the Republican party.

Look at it from the “flyover” part of the country.

Billions of dollars are leaving the country in lost opportunity for Americans. That includes not only lost jobs, but aid to countries who despise Americans. Hell if we didn’t have fracking jobs buoy the upper Midwest for the last seven years, there could have been a real insurrection already occurring in America.

Well guess what, those jobs are also going bust. And you could point your finger at Washington policies and Wall Street predatory credit practices for that carnage.

Lastly, if all the previous free-trade agreement the US has signed from Nafta to TPP, were so good for Americans, then why is global trade at multi-decades low point?

Because the equation is skewed. If you take away an American job making $25/hour making a widget for $15 a copy and move that widget making to Mexico were a worker is paid the equivalent of $10/hour, the company still has to charge customers $15 for the product, because it has debt to service to the banks to cover expenses for the move and its additional shipping costs.

So the banker makes his end, by selling the business debt financing, but the former customers for that widget are now making $10/hour greeting their former workers at Wal-Mart and cannot afford to by the widget coming in from overseas.

You play out that scenario a couple of million times over the course of 25 years and you have exactly what you have today. A disenfranchised citizenry, who see Wall Street bonuses rising every year and the former worker’s ability to even do right by their children vanishing.

And that is why the Trump candidacy is so polarizing. It’s all about who makes the widgets and who can afford to buy the widgets.

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One thought on “Trade is the great divide for Trump

  1. Pingback: Fed takes bad data in, horrible policy comes out. | GRAY'S ECONOMY

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