The Average Conservative Doesn't Care About Free Markets
For a long time I have hypothesized (and worried) that the average Republican / Conservative's support for free markets was merely tribal -- the team's official position was pro-free market, so individuals supported the team's position without actually, really understanding it. I have developed this hypothesis after a lot of private discussions with Conservatives who have betrayed many of the same economic mis-conceptions and bits of ignorance that drive much bad interventionist government policy.
Now there is this, from the leading Republican candidate for President:
Speaking at Liberty University today, Trump escalated his rhetoric on Apple's overseas manufacturing, and claimed somehow the US would reclaim those jobs in the future. "We have such amazing people in this country: smart, sharp, energetic, they're amazing," Trump said. "I was saying make America great again, and I actually think we can say now, and I really believe this, we're gonna get things coming... we're gonna get Apple to start building their damn computers and things in this country, instead of in other countries."
So the Republican who is currently leading in the polls (among Republican voters, mind you) supports government intervention in a successful company's manufacturing and sourcing decisions. Which just reinforces my view that we are dealing with the Coke and Pepsi party. Heads we get statism, tails we get statism.
CapitalistRoader:
Cruz is the only candidate, Democrat or Republican, who opposes the ethanol scam.
January 19, 2016, 9:59 amIsaacCrawford:
I've been wondering why the default party for libertarian leaning people is the Republican Party. While there are some huge issues with the Democratic Party and libertarianism, they do seem to have more things in alignment as compared to the republicans. If the Republicans no longer represent free markets and smaller government, what exactly do they offer libertarians? At least the Demorats are more likely to support drug legalization, gay marriage, abortion rights etc. with the exception of politicians with the last name of Paul, republicans are also way behind on civil liberties in general. The Republican Party has become the party of reactionary nut jobs, I have trouble seeing any political conservatism in them anymore let alone libertarian friendly policies.
January 19, 2016, 10:43 amErikEssig:
Sadly you are correct. Please give me a candidate that is pro free-markets and not pro-business. I've never seen one, but I've lived in NY and Massachusetts all my life.
January 19, 2016, 11:17 amstan:
Trump is not a Republican. Never has been. Huge supporter of the Clintons which should have been a bit of tipoff for you.
And many Trump supporters are former Obama voters.
January 19, 2016, 11:29 amstan:
You can't be serious.
January 19, 2016, 11:30 amJason Calley:
"I have hypothesized (and worried) that the average Republican / Conservative's support for free markets was merely tribal"
The average Republican does not even understand what a free market is. Or what the US Constitution says. Most do not know the difference between a democracy and a republic. Very few can tell you what political differences divided Jefferson and Hamilton. Hardly any can tell you what "states rights" means. Or what is the purpose of the 16th amendment. Or what is it that the Federal reserve does. Or why doesn't Washington DC have a normal congressman or a senator.
The average Democrat is even worse.
January 19, 2016, 11:37 amPeabody:
Of note, he doesn't say how "we're gonna get Apple" to do anything. While he does tend to authoritarian strongman ideas, Trump doesn't explicitly state that this will be through government edict or intervention. It seems reasonable to claim that he is just saying that he will make America so great/smart that Apple will voluntarily choose to bring manufacturing to the US. Of course this is a pipe dream, but so is a good portion of what people running for president say.
January 19, 2016, 11:37 amPeabody:
The article you link also states that Rand Paul does not support ethanol subsidies.
January 19, 2016, 11:38 amMikeBruner:
You are correct, and this is not new. The best that can be said is that the Republican party contains a small number of serious free market voices, and a lot of blatantly insincere ones. But this dynamic is true on so many issues, with both parties. Free markets is just one of em.
January 19, 2016, 11:40 amMikeBruner:
Thought this was a very good commentary -- http://www.the-american-interest.com/2016/01/17/andrew-jackson-revenant/
January 19, 2016, 11:43 amIsaacCrawford:
I can't be serious about what? The Republicans used to offer limited government and free markets to libertarians. What do they offer now? I'm not saying that libertarians should vote Democrat but I am saying that I don't see what Republicans are offering.
January 19, 2016, 11:59 amA Scot:
I really don't understand why you conflate Conservatives and the Republican party; it's well known that the two are often at odds. You cannot consistently draw conclusions about one based on the other.
January 19, 2016, 12:20 pmMilton:
Your overall point is correct (and I say that as a conservative) but I don't know that this is the best example. Trump does not say how he plans on getting those jobs back. One could argue that he will get them back by lowering the cost of employing Americans- certainly an admirable approach. We know from Trump's past comments that he actually recommends penalizing outsourcing, but he did not say that here.
January 19, 2016, 12:30 pmMilton:
There are no pure candidates in this particular race, but Mitch Daniels, who unfortunately won't run because of his wife's skeletons, would be a good example.
January 19, 2016, 12:31 pmMatthew Slyfield:
Trump is not and never has been a conservative.
January 19, 2016, 12:50 pmIke Pigott:
Heads, we get Statism.
Tails, we get Statism.
And with each, it's off with our heads, and crammed up our tails.
January 19, 2016, 1:04 pmFreedom:
This (and related reasons) is why I vote Libertarian.
January 19, 2016, 1:48 pmmlhouse:
Actually you are making the wrong conclusion. Even in this statement Trump is NOT ADVOCATING intervention. That is just a straw man argument. Instead, just the opposite. By "restoring" America, reducing the tax rates and regulation, and improving the working conditions this would create a free market solution to some of these problems.
While I doubt that labor rates int he US can ever match those overseas in certain parts of the market, by moving on from the Statism solutions advocated by the other party we can create more opportunities for investment and growth in the United States (and this would spread across the globe).
January 19, 2016, 2:20 pmAdriana:
He has advocated for a tariff numerous times. That's a statist intervention.
You're right that "gonna get Apple to start" doing X, Y, and Z isn't an explicitly statist threat. Maybe "gonna get" means "reform regulatory and tax obstacles" that encourage companies to go overseas. I think, though, that he doesn't deserve the benefit of the doubt because he's made his views on free trade well known. Did he clarify his comments later and say that's what he meant? Or are you being unduly positive in your interpretation without basis?
January 19, 2016, 2:37 pmslocum:
Well, as a small-l libertarian, I don't really have a default party (including the Libertarian Party). But the Democrats just are NOT great on civil liberties. It goes without saying that they don't think much of the 2nd amendment. But they also believe there should be 'hate speech', 'climate-change denier' and possibly 'icky corporation' exceptions to freedom of speech and campaign finance exceptions to freedom of the press (I find their opposition to the Citizens United ruling absolutely chilling). Also appalling is their support for campus star chambers and 'yes means yes' laws (they seem to think there should be due process / presumption of innocence exceptions when women accuse men of sexual assault).
In the words of South Park's Matt Stone, "I hate conservatives, but I really f*#*king hate liberals". I admit, though, some days, it's the other way around.
January 19, 2016, 3:36 pmmarque2:
I don't see how this issue Trump raised is bad. Seems more like you don't like Trump, so you are picking on this issue. I think we would have to ask him to clarify, and ask how he would implement this before we truly start to condemn him.
If he means, he will sign a law forbidding Apple from making products in China - close to your interpretation, then I am with you in condemning him. If on the other had, he wants to remove regulation and corporate obstacles that encourage companies to build overseas, and that would encourage Apple to move more production to the USA, I would agree with him whole heartedly.
January 19, 2016, 4:06 pmmarque2:
Tariffs in general are bad, but if a country is abusing its system, charging large tariffs on our companies and then getting their goods here in the USA tariff free, he may have a point. He should say, hey we will plan to do a 1000% tax, and then negotiate down from there for a better deal. That is how Trump works, and it is how people negotiate. You claim you will do this, and then China gets a bit annoyed, they negotiate the US tariff away, and compromise by lowering Chinese tariffs.
Right now China is charging tariffs on our goods, while we let them in tax free, and when someone complains, you get a general shrug, - what can we do about it - we are powerless. Trumps negotiation methods seem a much better strategy than what we have gotten the last 40 years.
January 19, 2016, 4:10 pmmarque2:
Because you don't understand what Trump actually said, and because libertarian bloggers go out of their way to disparage Trump.
To each their own.
January 19, 2016, 4:11 pmmarque2:
The only requirement to be a Republican, is to check a box on a voter registration card. I am pretty sure he is a Republican. Do you mean to say at times in the past, he was, like Reagan, a Democrat?
January 19, 2016, 4:13 pmHenryBowman419:
Gosh, Warren, surely you know that the only principle that Trump has is the one that he shares with Charlie Sheen: winning! Don't fret over the non-existent principles of Donald Trump.
That said, I've long thought that Republicans simply do not have any core principles. In contrast, Democrats do indeed have principles: they believe in theft, serfdom, racism, and murder. It's too bad their principles are, to me at least, abhorrent.
January 19, 2016, 5:09 pmepobirs:
The core error here is the presumption of strong overlap between the GOP and conservatism. I'd be surprised if 1 out of 10 GOP office holders could score well in a pop quiz on essential principles and the reasoning behind them. The numbers would be even worse for the voter base. There are a lot of people who understand that freedom is a good thing but would have difficulty expressing why. This stuff was never easy to teach effectively and the many decades march through the institutions has only made things worse.
January 19, 2016, 5:21 pmepobirs:
What you are speaking of is simply impossible, both politically and in other ways. How is an American based factory going to compete with a Chinese factory that has a resident workforce (barracks within the factory grounds) that performs 11 hour shifts for the equivalent of $3 an hour?
January 19, 2016, 5:24 pmmarque2:
It is possible. We have a lot of restrictions in the way. If Apple wants to manufacture in Cupertino for instance, they have outrageous land use restrictions, a bizarre set of OT rules in CA, a California branch like OSHA that is nuts, OSHA, environmental reviews that allow everyone to sue you over and over again whenever you try to build something. Government bizarre employee paperwork regarding race, and religion, and sex surveys, and 100's like it. Minimum wage requirements (and not just $15 an hour - in CA a programmer has to be hourly if they are paid under $47.xx an hour, and professional if paid over). It is just nuts.
I would say, we would much more highly automate the process. In China folks are hand screwing and gluing every part together, but even with our automation knowhow, our government makes the cost too high .
January 19, 2016, 6:03 pmtex:
China is installing robots to build future iGadgets. Apple can install robots to build future iGadgets & the difference between a very few higher paid overseers won't offset the advantages of home mfr with quicker delivery & much quicker change of plans.
Mfr is returning to the US, with robots. Toyota ships Camry's to Japan to sell. Hopefully, and it is only hopefully, Trump is thinking of what CAN be done to compete.
January 19, 2016, 8:21 pmtex:
He has said those tariffs will never be imposed because they will bend. It is by his own words, & my hope, that it is leverage he seeks, not tariffs, a bargaining chip.
In any trade, including you buying a car, both sides expect to gain & so it is with international trade. Both sides have interest in the deal. Both sides argue their case until a deal is done both can live with. He has referred to Icahn as his negotiator & that would be many times better than Kerry.
Of course, it is unknown what the man will do. "Read my lips," "WMDs," "You will save $2500/yr on your premium & can keep your doctor," . . . It is hard to believe Trump will be worse, & there is some chance he will be better.
January 19, 2016, 8:26 pmTruthisaPeskyThing:
The quote is short on specifics, but the Trump quote itself does not reveal that Trump is against the free market and that he would intervene with penalties to get Apple operating more in the U.S. Perhaps the biggest inducements to go offshore is double taxation, high tax rates, unemployment insurance nightmares, regulatory morass, and anti-business attitudes. By going free market and removing those phenomena, Trump could indeed attract more jobs into the U.S.
January 19, 2016, 8:41 pmmesocyclone:
Trump is an "average conservative/Republican?" Nonsense. Once again, you are stereotyping conservatives and Republicans incorrectly. It is getting really tiring. You are a better thinker than that - please use that ability.
January 19, 2016, 8:55 pmherdgadfly:
When did Donald Trump become conservative - average or otherwise? Not yet and not now.
All politicians - liberals, fence sitters, conservative and yes, Warren, social libertarians - play the corporate welfare game for the "good" of their employer base in order to lie to themselves about economic benefits from paying for jobs in the unspoken name of universal socialism. Corporations take the political dole paid by taxpayers and plan their next move five miles down the road.
January 19, 2016, 9:35 pmdwal11:
Arthur Laffer says Trump gets it and is only pressuring other countries to open their markets. Sure he understands Friedman and Mises from Wharton but has to get elected.
Plus the people President Trump brings in will be excellent, pro business. Everyone knows ethanol is junk except as an emergency fuel and was developed before the expansion of fracking.
One more year and will the anti-USA Globalists or OSI leave easy? How Will the Center for American Destruction/progress and 50 other groups react to being eliminated from the conversation and their WH keys are useless and they will be unable to steal tens of billions with junk like Green Collar jobs or 10 billion fake weatherization? Or the crony leftist green scams being shut down? We better change the nuke launch codes, the bad guys have everything else.
January 19, 2016, 10:57 pmRehiggs:
marque2
Tariffs hurts consumers in the country that imposes them by raising prices. What you are suggesting is equivalent to suggesting that if China punches itself in the face and bleeds on our shoes, the US should retaliate by doing the same.
January 20, 2016, 1:14 ammarque2:
Hmm, seems like China was able to replace tariffed US products with internally produced products, and China, though now admittedly in a normal recession, has been enjoying 10% growth for decades, while we have what 2-3%, if that.
Yeah, local consumers possibly have to pay more, but I think the tariff issue is much more subtle than "punching oneself in the face"
January 20, 2016, 8:34 amMNHawk:
You should have more of a problem with Iowa's corrupt governor (who's family is receiving graft from the gasohol industry) declaring war on Cruz, because Cruz wants a phase out of gasohol mandates.
January 20, 2016, 8:37 ammarque2:
Actually I do have problems with that. Iowa is an interesting state. There are lots of folks who are not for ethanol subsidies, and it is possible to win - but there will be enormous pressure on those candidates, and the caucus system tends to allow those who are more riled up to skew the vote, since only about 5% show up.
I showed up in 2008, when I lived in Iowa, it was a cold night on Jan 3, and there was a light, but stinging snow in Cedar Rapids ... It is just not something most people would want to do.
January 20, 2016, 8:44 ammorganovich:
mlhouse-
i think you are the one using a straw man.
trump is explicitly advocating for the use of punitive tariffs to force companies to manufacture goods here. note that he want to inpose them on foreign forms as well.
this is just smoot halwey 2.0. it's a failed and bankrupt mercantilist solution. he is NOT advocating making america attractive for manufacturers, he is advocating punishing them for making things overseas.
the notion that "it's just a threat and will not be imposed" (argued by tex) is meaningless. so, if i point a gun at you and say "give me your wallet or i'll shoot you, " that's OK as long as you cave and give me your money and i do not actually make good on the threat?
what sort of thinking is that?
trump is an economic illiterate pandering to fools and special interests. sure, forcing apple to onshore may benefit a few people who get jobs, but the net effect will be a whopping deadweight loss for the society as a whole.
this is just negative sum wealth redistribution.
that is NOT how you make a country great.
January 20, 2016, 8:56 ammorganovich:
that's not a valid argument. it's like arguing that because a car kept rolling down a hill, the brakes did not slow it down.
tariffs hurt china. they just had so much really easy growth from the low hanging fruit of ending communist that ANYTHING could have supported growth. they also vastly inflated their GDP by running up debt and building empty cities and useless infrastructure and producing products at a loss.
this is now coming home to roost. china's economy is a disaster and it's people are still very poor (half as rich as mexicans by per capita gdp and worse on consumption).
it is NOT a system to emulate.
January 20, 2016, 8:59 amErikTheRed:
Don't feed the Cruz trolls. There's no reasoning with them.
January 20, 2016, 9:03 ammarque2:
No I don't think so. He has mentioned that in cases of specific countries which seem to be abusing our trade relationship. We still don't know what he means with this statement.
Admittedly his grasp of international trade is not that of an extremely learned right wing economist, but maybe the right wing economist also is weak in his/her grasp of negotiation. You don't demand free trade and when the other country doesn't reciprocate, just shrug your shoulders and say oh well.
January 20, 2016, 9:04 ammarque2:
How is it coming home to roost? When we have a recession, do we call it a natural part of the business cycle, or do we call it "the 7 year coming home to roost"
You haven't proven your point about low hanging fruit or anything.
January 20, 2016, 9:05 amDirtyJobsGuy:
The average joe would be more in favor of free markets if his local, personal markets were free. By this is his job, schools, local taxes, etc. Most people think that most of the economy is rigged deals or crony connections. Their perception is higher than reality thank God, but still pervasive. Start by strictly following the current laws and regulations without exceptions for "diversity", minimize court written law and force real transparency and more people would see the advantages of free markets.
January 20, 2016, 9:25 ammorganovich:
i'm not sure about that. on the one hand, trump is hated by the GOP establishment. on the other, he is pulling nearly 40% of the republican vote and is MILES ahead of any establishment candidate.
so, just how are we to define "average republican"? if it's average republican party boss, then, for sure, trump is not one. but if one is instead considering who the most republican voters are supporting, then he appears to be the clear leader.
it's also clear that the establishment GOP candidates are deeply unpopular with republican voters. i mean, none of the top 4 are traditional republican style candidates. those guys have been utterly abandoned.
to me, this seems to indicate that the typical gop candidate and the typical gop voter have diverged dramatically.
January 20, 2016, 9:29 ammorganovich:
trump's speech did, indeed, show him to be anti free market.
"During his 45-minute speech on Martin Luther King day, Trump also claimed to support free trade yet insisted he'd impose a 35 percent tax on businesses producing goods overseas, including Ford cars that are produced in Mexico."
"CNET reports that the GOP candidate and billionaire businessman said
American companies should not be free to manufacture wherever they
choose."
""Free trade is good. But we have to do it [force them back to the US]. Or we won't have a country left," said Trump."
"Republican presidential candidate Donald Trump warned that he would force
Apple, the U.S.'s most profitable company, to manufacture all of its
products in the U.S. if he is elected president in November 2016"
http://www.cnbc.com/2016/01/19/trump-apple-should-build-their-damn-things-in-us.html
note that he keeps saying "force" not "incentivize".
this is not about making the US attractive for manufactures, it's about using the negative sum tactic of tariffs to force them to make bad choices.
so, sorry, but your characterization of what was said is simply inaccurate.
trump very much plans to "intervene with penalties" to use your phrase.
his plan is not to use carrots, it's using the stick.
that, alas, is the pesky truth of the matter.
January 20, 2016, 9:38 amCapitalistRoader:
Peabody, yes, you're right of course. I should have said "...the only candidate, Democrat or Republican at the recent debates..."
January 20, 2016, 9:42 amI'm not thrilled with any of the candidates but you take what you can get. All of the GOP candidates opposed Ex-IM; all of the Dem candidates supported it. No help in differentiating candidates there. On ethanol, as you pointed out only two GOP candidates have free-market creds. And according to polling only one of those candidates has a chance of being elected.
morganovich:
marque-
his plan is very clear and he has laid it out repeatedly: he wants to force companies to manufacture in the US by putting high tarriffs on imports of goods, including those made for US companies by overseas arms or contract manufacturers.
he has been very specific about this.
it seems like the trump supporters are unaware of his actual plans. commenter after commenter keeps trying to frame this as trump wanting to make the us attractive to apple and ford to lure then back to the US. this is NOT what he is saying. it's not even close. he uses the word "force" over and over. we need to FORCE them back. he then lays out this plans for tariffs.
we do not need to ask him to "clarify" he has been extremely clear, over and over.
trump is a protectionist mired in the negative sum mercantilist thinking that has been so comprehensively debunked every time it's been tried.
it's populist pandering to the economically illiterate, special interests, and those who appear to have no idea what his plan actually is.
January 20, 2016, 9:44 ammorganovich:
marque-
it is always easier to grow off a low base when you are not industrialized and have not had a free market. you jump from serfs in rice paddies right to using modern manufacturing from abroad. economists call this "the advantages of backwardness". you need enough of a legal structure to make it work (which is why africa has repeatedly had such trouble) but it's an easy playbook to run.
when you have $1000 per capita GDP, ramping up to $4000 is easy. it's also huge in % terms. but not in nominal terms.
if you have 10% growth on a 1000 base vs 2% growth on a 50,000 base, who grew more in actual dollars per person?
and china's growth has been grossly overstated. it's the ultimate keynsian fraud, without question, the greatest in history. instead of just "building cars and driving them into the sea" they built entire empty cities and outlandish overcapacity. the losses incurred from these ventures vastly exceed anything in human history. the debt (public and private) in china now exceeds 250% of GDP. the speed of this rise is staggering.
http://www.economist.com/news/finance-and-economics/21676837-credit-growth-still-outstripping-economic-growth-deleveraging-delayed
since 2009, they have added 90% of gdp as debt. stop and consider that. that's nearly 13% of gdp run up as debt per year. it has exceeded their growth rate.
all their growth and then some has come from debt. it's a ponzi scheme that is reaching its critical phase. this is not a typical economic cycle. it's a manufactured bubble that is starting to burst.
January 20, 2016, 9:59 ammorganovich:
he has specifically recommended using tarriffs to force apple and ford to manufacture here.
this is a negative sum game. tariffs ALWAYS harm the imposing country.
if another country imposes tariffs, you are still better off not imposing your own.
this is not some clever negotiating ploy. it's a threat to punch yourself in the face until someone does what you want.
worse, it's aimed directly at US companies. he's not going after lenovo here and threatening to tax them, he's going after apple and ford (by name) and using the "it will make them shift jobs to the US" argument.
if your goal is to get china to drop tarriffs, then what's the point of threatening apple? or ford who builds in mexico (he did this by name and location)? mexico is part of NAFTA.
sorry, but this is idea that it's just a clever tactic is just not borne out by the facts. if his goal was threats to get countries to drop their own tariffs, this is a singularly stupid and ineffective way to go about it.
January 20, 2016, 10:37 am