Donald Trump – who has been obsessed with China and seemingly ambivalent about much our own self inflicted liberalism over the years – took the occasion of the one thousand plus point drop in the DOW today to continue to hit the China button. Remember, according to Trump, China is kicking our butts nine ways from Sunday – we’re always losing to China.
But are we?
If this were the case, our stock market would be a lot worse than China’s. Just think about it. Common sense. Instead, the opposite is true. China’s market closed down almost 9% today. Our market – at 1pm – is almost back to even par. We’ll see where it closes, but it won’t close down 1400 points, which would be the China equivalent. Oh, BTW, China’s market is down over 60% for the year. Yeah, really kicking our asses, aren’t they?
And this: countries don’t “trade” with each other anyway. Individuals and individual companies do. To hear Trump, and his liberal populist fans, when China sells us a piece of steel, China wins and we lose. How is that?
When one of our companies buys Chinese steel – we can assume that it’s a win for that American company and their American customers and American workers. If it’s also a win for China, who cares? Why must every deal be a win/lose proposition? The answer is that it doesn’t work that way.
When our companies buy steel, they do so to produce cars, buildings, farm equipment, lawn mowers, gas grills – and on and on. They create jobs and profits by doing this, and consumers are served. Many of their consumers are other businesses, who will use that farm equipment and trucks and commercial cooking equipment to make more profits and create more jobs. This is how free market economics work.
Trump is in denial on that. So are his fans. It’s a shame. This is not conservatism folks. Just sayin….