An Extreme Example of Politico-Speak
By Pierre Lemieux
A pair of tweets by President Donald Trump on September 1 would encapsulate what’s wrong with his understanding of the world, if it were possible to squeeze it in a capsule. The tweets dealt with the current renegotiation of NAFTA (the North American Free Trade Agreement), which could exclude Canada or flounder altogether. At nine minutes from one another, they read:
There is no political necessity to keep Canada in the new NAFTA deal. If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out. Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off…
….Remember, NAFTA was one of the WORST Trade Deals ever made. The U.S. lost thousands of businesses and millions of jobs. We were far better off before NAFTA – should never have been signed. Even the Vat Tax was not accounted for. We make new deal or go back to pre-NAFTA!
The “fair deal for the U.S.” is typical politico-speak. The expression “fair deal” reached its apex under President Harry Truman (if the Google Books Ngram Viewer is any indication), although it seems to have been also very popular in the Progressive Era. It has been re-used by Barack Obama (“workers fighting for a fair deal,” for example) and by Bernie Sanders among others. It must not be forgotten that what constitutes “fairness” in “fair” trade is determined by politicos and bureaucrats responding mainly to special producer interests. On a philosophical level, they passionately don’t agree among themselves what fairness is.
As for “the U.S.,” it is not, in fact, a large individual or a homogeneous collective. Any “fair deal” for some American producers will be paid for by some American consumers in higher prices.
Other elements of Trump’s September 1 tweets may lie even farther on the spectrum of political lies, exaggerations, or delusions.
One is the statement that “NAFTA was one of the WORST Trade Deals ever made.” Trump sometimes tries to appear–and is believed by some of his supporters to be–as much a free trader as a protectionist (A and non-A) when he claims he wants zero tariff. Now, zero tariff is basically what NAFTA achieved in most of North American trade. It is true that there were exceptions in some sectors—for example, milk, eggs, and poultry products, which cannot be freely imported into Canada, or maritime shipping services, which cannot be imported into the United States. But if one believes that “free trade” treaties are necessary for free trade, the old NAFTA was in many ways a model.
Another example of extreme politico-talk in the tweets of September 1 is found in the claim that “the U.S. lost … millions of jobs” because of NAFTA. Between January 1, 1994, when NAFTA came into force, and July 2018, the number of private jobs in America increased by 33.3 million. This job growth of 36% happened despite the worst recession since the Great Depression. Moreover, if “the U.S.” had lost millions of jobs, one wonders where these jobs would now be in an economy at, or close to, full employment. Except for structural, government-created obstacles such as minimum wages, the 6.3 million currently unemployed mainly reflect frictional unemployment (being in-between two jobs). The extent of frictional unemployment in a dynamic economy is illustrated by the fact that some five million Americans change jobs every month.
Still another example of misleading statement (to say the least) is the idea that the value-added tax in Canada and Mexico were “not accounted for” in NAFTA. Protectionists in the Trump administration believe that a VAT plays the role of a tariff despite its being paid by consumers at the same rate whether they buy foreign or domestic goods. This belief seems to show a glaring ignorance of how a VAT works.
Last but not least is Trump’s threat to Congress that it “should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off…” A threat is a commitment to impose a cost, not to confer a benefit. But Trump is threatening what he believes is a benefit. What he is telling Congress is something like “if you prevent me from implementing a new NAFTA, I will do even better by simply abolishing it.” In other words, if you prevent me from doing what’s good for Americans, I will do something that will be even better for them. Even if one grants all protectionist claims, the logic of this threat is strange.
There are currently three alternatives on the table: (1) the continuation of NAFTA in more or less its present form; (2) major protectionist changes such as the exclusion of Canada; (3) the termination of the treaty. Since Trump appears to be legally empowered to do #3, and believes he can do so, why would he try to do #2, and threaten to do #3 only if Congress pushes for #1? Perhaps because he could then blame Congress for the damage, including to his base of “deplorables” who buy inexpensive imported goods.
So much for political rationality, which, according to many behavioral economists, is supposed to compensate for private cognitive limitations!
Is all this also related to an anti-Enlightenment rejection of logic and reason, on par with the postmodernist and “snowflake” return to non-rationality and emotions? If so, the current president would not be really different from his worst predecessors and competitors, including Hillary Clinton; he would be their heir, in a rawer incarnation.