Tag Archives: Germany

Memo to The Donald: Cut Tariffs NOT Rates

So far, President Trump’s economic response to a potential coronavirus outbreak and a further stock market sell off has been expected – calls for more interest rate cuts and an additional round of monetary stimulus. For the stock market, economy, and the virus itself, neither measure will have their desired effect and, in fact, may exacerbate things.

Further rate cuts and more money printing will not alleviate the situation since it has been the Federal Reserve’s recent “repo operations” which has pushed the market to its unsustainable highs. For President Trump’s re-election hopes, the current “correction” better be short lived since he has repeatedly boasted about the stock market and has tied its success with the supposed health of the economy. He will pay a political price if the market continues to tank and brings the economy down with it.

While President Trump and economic nationalists have bashed China for its trade practices, they are now going to see first hand how dependent the US and the West are on Chinese exports, as supply chains are disrupted over the coronavirus.

A Bloomberg article describes China’s weakest factory activity ever recorded:

The manufacturing purchasing managers’ index plunged to 35.7 in

February form 50 the previous month, according to data received by the

National bureau Statistics on Saturday, much lower than the median

estimate of economists. Both were well below 50, which denotes

contraction.*

The expected reduction of Chinese goods will mean higher US domestic prices, however, the increase in prices can be offset somewhat not by rate cuts, but by tariff reductions, or, better still, elimination of duties on imports. Increasing the money supply or cutting interest rates, which is what Trump, the market, and 95% of economists favor, will only mean higher prices for dwindling imports as greater amounts of money will chase fewer goods.

In the President’s comments on the coronavirus and the stock market plunge, he has repeatedly cited other nations’ (Japan, Germany) – lower interest rates as a policy that the Fed should pursue. Apparently, the President is not aware that recent data out of Japan has shown that the economy shrank at an annualized rate of 6.3% for the fourth quarter of 2019 while the German economy only grew at 0.6% last year.** Low rates have not helped either economy or anywhere else where they have been foolishly tried.

What President Trump, world policy makers, and central bankers do not understand, whether deliberately or from willful ignorance, is that the artificial suppression of interest rates and money printing does not lead to economic growth. Instead, prosperity can only come about by the arduous process of saving (abstention from consumption), which provides the means for capital formation, which leads to production. Employment, wage growth, and income are also ultimately tied to savings. For the creation of wealth, there is no way around this elementary economic principle – one that few profession economists comprehend.

For saving and investment to have their most efficacious impact and for individuals to engage in such sacrificial behavior, a sound monetary order must be in place. Unfortunately, ever since the US went off the gold standard internationally in 1971, its monetary system has grown increasingly unstable.

If the Trump Administration would eliminate, or at least reduce significantly, tariffs, it would more than likely induce China to do the same. The benefits of lower import prices for the millions of out of work Chinese due to the coronavirus shut downs would be a tremendous help and would also boost America’s export industries. Such action would show to those who elected him that Donald Trump was not a typical politician, but one who thought outside the box.

While it did not cause the Great Depression, the Smoot-Hawley Tariff of 1930 contributed to its severity. If the recent sell-off is indeed the beginning of the long anticipated bust, following a supposed decade long expansion, then policy makers should do all in their power to alleviate the coming suffering. The reduction of tariffs not only on Chinese goods, but those the world over would be a step in the right direction.

Let us hope that someone will convince Donald Trump that tariff reduction and not rate cuts will help Americans better deal with the troublesome and potentially economic and socially devastating coronavirus.

*China Posts Weakest Factory Activity on Record,” Bloomberg News, 29 February 2020. https://www.bloomberg.com/news/articles/2020-02-29/china-feb-manufacturing-pmi-at-35-7-est-45-0

**Megumi Fujikawa, “Japan’s Economy Shrinks Faster Than Expected.” Market Watch. 16 February 2020. https://www.marketwatch.com/story/japans-economy-shrinks-faster-than-expected-2020-02-16; “German Economy Stagnates as Eurozone Growth Hits Seven-Year-Low,” The Guardian, 14 February 2020, https://www.theguardian.com/business/live/2020/feb/14/german-economy-stagnates-growth-eurozone-gdp-business-live

Antonius Aquinas@AntoniusAquinas

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The Ethics of a Gold Standard

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goldstandard

The efficacy of a metallic monetary system is beyond dispute at least among real economists which eliminates just about 95% of whom are now engaged in the “profession.” Money, which gold is, allows for specialization, the division of labor, and provides the means for mankind to escape from barter and, thus, a primitive existence. Like free trade, money naturally integrates mankind both among and between peoples.

A system of central banking with an unbacked paper currency is the antithesis of a gold standard. Manipulation of currencies by central banks, mostly through debasement, hinders trade, creates distortions, and ultimately leads to the dreaded business cycle. Murray Rothbard aptly describes the baneful results of state intervention in the monetary system:

. . . government meddling with money has

not only brought untold tyranny into the world;

it has also brought chaos and not order. It has

fragmented the peaceful, productive world

market and shattered it into a thousand pieces,

with trade and investment hobbled and hampered

by myriad restrictions, controls, artificial rates,

currency breakdowns, etc. It has helped bring

about wars by transforming a world of peaceful

intercourse into a jungle of warring currency blocs.*

Rothbard Money

While the economic efficiency of a gold standard is important, the ethical case for it is more compelling and was the reason why gold, as money, lasted as a medium of exchange for so long. Gold/money has to be created through honest-to-goodness production and exchange. The often dangerous mining of gold takes labor, capital goods, and land. Turning raw gold into coinage is another process which requires a high level of specialization and production techniques. Both are honest and morally sound activities which make for the betterment of life all around.

The ethical standing of central banking and its issuance of unbacked currency as money through the printing press, stroke of a computer key, or via the expansion of credit cannot stand similar scrutiny. By any appraisal, central banking is immoral. Through the creation of money, banks stealthy transfer wealth to those who control the money supply and those closely associated with it.

The ability of central banks to create unlimited amounts of money and credit has been the greatest redistribution scheme ever conceived. The process ultimately leads to class conflict as the wealth disparity between the politically well-connected and those outside that nexus invariably widen.

Under a gold standard, none of this would take place.

Because of their lack and often distain for economic doctrines, in particular, monetary theory, “economic nationalists” (really “economic ignoramuses”) have wrongly focused on trade as a factor in the continued decline of the middle and working classes. China’s supposed unfair trade practices was a staple of President Trump’s campaign rhetoric and has continued through much of his first term.

The focus on trade has deflected attention from the real cause of worsening economic conditions for American workers and the enrichment of Wall Street. Despite the blatant transfer of wealth via the Fed’s policies of suppressed interest rates and money printing since the 2008 Recession, economic nationalists continue to applaud President Trump’s tariff policies while the President continues to browbeat the Fed to do more of the same even calling for negative interest rates and more Quantitative Easing.

The Left rightly speaks out of the vast and growing inequality of wealth distribution, but like those who espouse economic nationalism, they fail to understand the reason for why the societal imbalance has occurred. One remedy they propose – a “wealth tax” – will not address the problem. Moreover, their “soak-the-rich” schemes would snare in their plunder (not that Leftists particularly care) many of the wealthy outside of the banking and financial sector of their legitimate, just gains.

The case for honest money must be made on ethical grounds. The current system must be exposed and shown for the scam that it is: a massive redistribution scheme enriching the political elites and their closely aligned business and financial allies. While it is undeniable that a gold standard would lead to enormous prosperity, its reinstatement would remedy one of the great injustices that plague the world – central banking!

*Murray N. Rothbard, What Has Government Done To Our Money? BN Publishing, 2012: 84.

Antonius Aquinas@antoniusaquinas

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Pope Francis Wants Even More Islamic Invasion of Europe

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Not surprisingly, the purported head of the Catholic Church, Jorge Bergoglio, a.k.a Pope Francis, has ushered in 2018 with another denunciation of those who want to preserve what is left of Western Civilization. In a New Year’s address that the Church now calls “World Day of Peace,” instead of the traditional feast day of the Circumcision, Bergoglio once again labeled those who want to curb the coercive migration of Third World peoples into Occidental cultures as “sowers of violence,” “xenophobic,” and they “racially discriminate.”*

Francis continued his criticism of immigration opponents as being “guilty” of “demeaning the human dignity due to all as sons and daughters of God.”

A reality check is in order for Francis: the vast majority of migrants are Muslim who are mostly young males. They are not “sons and daughters” of the Christian God and would be, to say the least, a little bit offended as being categorized as such!

Of course, for those who actually pay attention to this cretin, this is nothing new. Since the beginning of his abominable “papacy,” Bergoglio has repeatedly pushed far-out left wing and green causes. What is worse, however, is that Bergoglio is a heretic who has uttered a mind-blowing string of heresies that have disqualified him from being pope of the Catholic Church. Not only has he demonstrated beyond a doubt that he is a heretic, but he cannot be pope on theological grounds. The Argentine Apostate was ordained in the invalid post-Vatican II orders which confer no sacramental grace. He is not a true bishop either since he also was consecrated in the new rite. Bergoglio is simply a layman masquerading as a pope.

Nevertheless, “Pope Francis” has been cheerleading for even greater amounts of immigration, excoriating anyone who opposes him suggesting that such thoughts are “sinful.” He has used the Chair which he illegitimately sits in both an immoral and unhistorical fashion.

In case Bergoglio is unaware, the popes were the main bulwark against the repeated Muslim attacks upon Christendom in the past. It was the popes that encouraged and inspired the Western princes and powers to take up arms and repel the Mohammedans and reclaim Christian territory, most importantly the Holy Land during the Crusading era. Had it not been for the popes, Europe may have already been overrun by the Infidel or at least had most of its lands compromised.

While it is imperative that enemies of the West of the likes of Bergoglio should be rebuked and, if possible, removed from their positions of power, mass migration opponents must likewise address the demographic nightmare that Europe faces. European birth rates have fallen to unsustainable levels and if trends are not reversed, Western man is headed for extinction if not marginalization in global affairs.

Declines in native European birth rates stem from factors both economic and cultural: (1) real income have continually fallen in the West which has now required many women to enter the workplace in greater numbers to offset the decline; (2) the Establishment has vigorously pushed the idea of women in professional roles and the nonsensical idea of “working mothers.” Women working during their most fertile years would naturally decrease the number of child births. There are, of course, other cultural factors – divorce, contraception, abortion – that have effects on low birth rates, all of which need to be taken in account before there can be a return to a more populous European Continent.

Foreign policy has contributed to the migration crisis. The US policy of regime change in Iraq, Libya, and its attempts to do so in Syria and now Iran has dislodged millions, making it easier for the powers that be to orchestrate their coercive mass migration schemes.

There can be no compromise on mass immigration, the future of the European peoples and their glorious past accomplishments hang in the balance. While the enemies of Western Civilization such as “Pope Francis” want to eradicate this legacy, there is still significant numbers that understand the importance of preserving its past and the promise of its future.

For those who seek Western man’s survival, the heroic attitude of the Roman statesman, Cato the Elder, should be adopted who, after every speech, called for Rome’s lethal enemy’s destruction, “Carthago delenda est.” Hopefully, the proponents of mass migration will share the same fate as the Carthaginians did.

*Thomas D. Williams, “Pope Francis: Opponents of Mass Migration Sow ‘Violence, Racial Discrimination and Xenophobia.'” Breitbart. 1 January 2018. http://www.breitbart.com/national-security/2018/01/01/pope-francis-opponents-of-mass-migration-sow-violence-racial-discrimination-and-xenophobia/

Antonius Aquinas@AntoniusAquinas

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In Remembrance of the October Revolution

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Oct Rev

The Communist monster, Vladimir Lenin

This October marks the centennial anniversary of the Bolshevik takeover of Russia and the establishment of Soviet-style Communism which tragically, for the Russian people, would last for some seventy interminable years. Not only did the Soviet regime liquidate and imprison millions, but its idiotic system of central planning impoverished the country, turning it into an economic basket case, the effects of which continue to this day.

Just as bad, the Bolsheviks murdered the last Czar, Nicholas II and his family, brutally ending nearly five hundred years of monarchial rule of Russia. Within a year of the demise of the Russian aristocracy, two other of Europe’s venerable royal houses – Germany and Austria – met the same fate, all three casualties of their insane decision to participate in World War I. The end of the German Court and especially that of Austria came at the vengeful insistence of then President Woodrow Wilson, who brought the US into the conflict on the pledge to make the “world safe for democracy.”

The triumph of the Bolsheviks and the downfall of the German and Austrian monarchies ushered in the Age of Democracy as other Western constitutional republics at the time and in each passing year began to resemble and adopt features of their supposed Communist foe. As the 20^th century wore on, each Western nation state became more “democratic,” increasing their welfare/warfare state apparatus, imposing more and more radical egalitarian social and economic measures, and adopting greater amounts of economic planning mostly through central banking. Not only did economic activity become increasingly effected by monetary policy, but the central banks were instrumental in the eradication of the gold standard throughout the Western world.

Not only did Communism prove to be a disaster economically in Russia and everywhere else tried, but socialism had other debilitating effects. The quality of the population declined along with the numbers of ethnic Russians, a trend that ominously continues to this day. While ingenuity was stifled by the Soviet command economy, its culture, although never as advanced as Western Europe, became sterile and overshadowed by the heavy hand of the commissar. The only memorable literature produced during the period were accounts of the gulag and the repression of dissent. Music and the arts were similar cultural wastelands.

The West, too, as its nation states became more socialistic and egalitarian, witnessed retrogression in every aspect of society. The catastrophic drop off in the size of the native populations can largely be attributed to crazed feminism, where women were encouraged and given privileges to pursue careers and become “working moms,” which led to the phenomenon of the “dysfunctional family” and declines in the number of child births. Hans-Hermann Hoppe explains this effect in the American context:

In the U.S., . . . less than a century of full-blown

democracy has resulted in steadily increasing

moral degeneration, family and social disintegration,

and cultural decay in the form of continually rising

rates of divorce, illegitimacy, abortion, and crime.

As a result of an ever-expanding list of non-

discrimination – ‘affirmative action’ – laws and

nondiscriminatory, multicultural, egalitarian

immigration policies, every nook and cranny of

American society is affected by government

management and forced integration.*

Hoppe Demo 3

Hoppe’s seminal demolition of Democracy

A primary reason why the quality of Western life has crumbled so markedly has been the replacement of its “natural elites” with “political elites” via the democratic process. Every society is led by its leading individuals who through talent, hard work, brains, foresight, moral fortitude, fairness, and bravery come to the top and are looked to for guidance. Under democratic conditions, however, the natural elites have, in a sense, been “voted out” by the political class who, instead of out competing their rivals, secure their status by politics mostly through demagogy.

In Soviet Russia, the natural elites were ruthlessly purged by Lenin’s forces and over time any sort of advancement or achievement had to come via the Communist Party.

Despite the overwhelming failure of socialism, Western nation states continue to practice many of its features, a most notorious recent example being that of the passage of Obamacare, the first step on the road to universal health care in the US. America, itself, resembles more of a police state than ever before with the establishment of the Department of Homeland Security and the passage of draconian legislation such as the Patriot Act and the National Defense Authorization Act (NDAA).

The October Revolution should be remembered for what it was: the inauguration of mankind’s first total state. It, and the social system which it spawned, should be condemned by all those who seek prosperity and an advanced civilization.

*Hans-Hermann Hoppe, Democracy: The God That Failed: The Economics and Politics of Monarchy, Democracy, and Natural Order. New Brunswick (U.S.A.): Transaction Publishers, 2001, p. xiii.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Can Germany Be Made Great Again?

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Holy-Roman-Empire-1789-1024x704

When Germany Was Great!

Ever since the start of the deliberately conceived “migrant crisis,” orchestrated by NWO elites, the news out of Germany has been, to say the least, horrific. Right before the eyes of the world, a country is being demographically destroyed through a coercive plan of mass migration. The intended consequences of this – financial strain, widespread crime and property destruction, the breakdown of German culture – will continue to worsen if things are not turned around.

Opposition to the societal destruction within Germany have been harassed and persecuted by the authorities and labeled by the mass media with the usual epithets: “far right,” neo-Nazi, “haters,” and heaven forbid, “separatists.” Because of this and other factors, there has been no mass movement, as of yet, that has coalesce to challenge the German political establishment.

A possible reversal of German fortunes, however, has come from a recent poll of Bavarians.*

A survey conducted by YouGov, a market research company, found that 32% of Bavarians agreed with the statement that Bavaria “should be independent from Germany.” This percentage has increased from 25% of secession-minded Bavarians when polled in 2011.

Of the some 2000 surveyed between June 24 and July 5, most supporters of independence come from the southern portions of the country.

Whether Bavarians or their fellow German separatists realize it or not, the only “political” solution to the migrant crisis is secession. This is not only true for Germany, but for all Western nation states swamped with unwanted migrants. Once free from the domination of the national government (and just as important the EU), each jurisdiction could make its own immigration policy and would be better able to control population influx at the local level.

Historically, Germany’s past has much more in common with a decentralized political landscape than with a unitary state. From the disintegration of the Roman Empire until Napoleon wantonly abolished the Holy Roman Empire in 1806, Germany was an amalgam of different political units – kingdoms, duchies, confederacies, free cities, etc. With no grand central state, there was considerable freedom and economic growth as each sovereign entity was largely able to conduct its affairs on its own terms.

Decentralized political power is also conducive for the advancement of culture. Music, the highest art form, found some of its greatest expression from the German peoples. And, the monumental figures of Western music were financed in large measure by German princes, kings, and emperors. Johann Sebastian Bach’s sublime Brandenburg concertos were underwritten, so to speak, by Christian Ludwig, Margrave of Brandenburg while Beethoven received support from Archduke Rudolph. Mozart was funded no less by the Austrian emperor himself, Joseph II.

Political decentralization provides an important mechanism as a check on state power. A multitude of governments prevents individual state aggrandizement as oppressed populations can “vote with their feet” and move to safer and less repressive regimes. A unitary state, or just a few, throughout the world would negate such an advantage.

Naturally, if nation states are a constant threat to the liberties and economic well being of their citizens, global organizations and states are that much more of a danger and should always and everywhere be opposed. The European Union, largely based on the principles of the US Constitution, has pressured nations under their sway, such as Germany, to accept the migrants and has threatened members such as Hungary and Poland with penalties if they do not do their fair share.

The empirical evidence is overwhelming in regard to political decentralization and economic growth. Since the level of taxation and government regulation are crucial factors in an economy’s ability to produce, the limitation on taxation and government oversight tend to be significantly lower if there are numerous states since there would be amble opportunities for producers to go to more conducive areas to set up shop. This can be seen in the US as thousands of oppressed businesses and firms have left California to lower tax and restrictive climes such as Texas and Nevada.

If Germany is ever to get a handle on the migration crisis before the country is completely demographically dismembered, its only hope is to return to its decentralized political roots. Let Bavaria lead the way!

*https://www.rt.com/news/396600-bavaria-independence-germany-poll/

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Pope Francis and Angela Merkel: Enemies of European Civilization

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Merkel & Pope

Two of Europe’s greatest contemporary enemies recently got together to compare notes and discuss how they were going to further undermine and destabilize what remains of the Continent’s civilization. Pope Francis and German Chancellor Angela Merkel met on June 17, in the Vatican’s Apostolic Palace to discuss the issues which will be raised at a Group of 20 summit meeting in Hamburg, from July 7-8.

The Vatican said that Frau Merkel and the Pope discussed the need “for the international community to combat poverty, hunger, terrorism and climate change.”* Ms. Merkel, in an obvious swipe at US President Donald Trump, said that “we are a world in which we want to work multilaterally, a world in which we don’t want to build walls but bring down walls.” The reference to “walls,” of course, was to President Trump’s promise to construct a wall on the Mexican-American border. The pope, too, has been critical of Mr. Trump’s proposed plan.

Ms. Merkel also lamented about the Trump Administration’s decision to opt out of the 2015 Paris climate accord. Pope Francis urged President Trump to remain in the accord and gave him a copy of his encyclical, “Praise Be,” when they met earlier this spring. The encyclical elevated “climate change” and protection of the environment as “moral obligations” while it criticized “perverse” economic development models that “enrich the wealthy at the expense of the poor.”

As has been the case since the Second Vatican Anti-Council (1962-65), popes have spent most of their time on secular concerns in which they have little competency and less on matters of the Faith. Pope Francis has taken this to a new level and rarely preaches on doctrine. This, in one sense, is good because when he does speak on religion, he usually spouts out some heresy or falsehood which scandalizes the Church. His many blasphemies and heresies, plus the fact that he was never ordained as a priest in the traditional Catholic rite or traditionally consecrated as a bishop (neither was Benedict XVI), makes him ineligible to be a true Catholic pope.

The latest fraud that these two cretins are now pushing is the supposed threat of global warming. The idea that “climate change” has had some nefarious effect on the environment has long ago been debunked by legitimate scientists and scholars. Climate change is a ruse used by global elites to further tax, regulate and enslave humanity.

Facts and sound theory, however, do not bother the collectivist minds of Pope Francis and Angela Merkel. What they are interested in is power and control and they intend to keep it through lies like global warming and by coercive massive migration which will fundamentally alter Europe’s demographics to their New World Order masters’ advantage.

Had it not been for the likes of Pope Francis and Ms. Merkel, it is unlikely that Europe would be under a deluge of mostly Mohammedan “asylum seekers.” The claim that the invasion was “spontaneous” due to the turmoil in the Middle East from US and Western nation-states military intervention is implausible. The region has been unstable for decades. Why all of a sudden is there a mass exodus and why it is mostly of young single Muslim men?

The invasion of Europe was carefully orchestrated and planned by the world’s power elite whose goal is to eliminate what is left of the Continent’s white Christian heterogeneous male population. Pope Francis and Ms. Merkel are the New World Order’s puppets carrying out their marching orders.

While the outlook for Europeans may currently appear grim, it is not hopeless. While Pope Francis and Angela Merkel cannot at present be deposed for their crimes, they can be defeated in the court of public opinion. For Europe to become once again the center of human civilization, the ideals of multiculturalism and the fraud of global warming must be slain on ideological grounds.

This is the duty that confronts those that seek a return of Europe’s previous glories. While the task appears monumental, it must be remembered that the pagan Roman Empire was eventually converted by the teaching of twelve men and one indomitable former Pharisee from Tarsus.

*Merkel Says Pope Francis Urged Her to Fight for Paris Climate Accord.” New York Times. 17 June 2017. https://www.nytimes.com/2017/06/17/world/europe/merkel-pope-francis-paris-climate-accord.html?_r=0

Antonius Aquinas@AntoniusAquinas

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Donald Trump is an Economic Ignoramus!

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Trump & Trade II

Not surprisingly, Donald Trump has followed in the infamous footsteps of his presidential predecessors in the transition from candidate to chief executive. Invariably, every candidate for the presidency makes a whole host of promises, the vast majority of which are horrible and typically only exacerbate the problems they attempt to resolve. Among the proposals, however, there is an occasional bright spot. Yet, once elected the stupid polices are eagerly pursued while the good ones are quickly discarded.

What was somewhat unique about Donald Trump was that he was the first candidate in a long while who had a number of refreshing and much needed proposals – border wall, “drain the swamp,” criticism of Ma Yellen and the Fed, rapprochement with Vladimir Putin and Russia, a deescalation of U.S. imperialism. There were bad ones, too, but the good ones were enough to lead him to a smashing win over the Wicked Witch of Chappaqua.

Even before being sworn in, however, the president-elect began to downplay his most positive positions and emphasize the worst. At the top of this list, and what Trump has been consistently wrong about since the inception of his political career, and even prior to it, has been “trade.”

Trump considers himself an “economic nationalist” in the mold of Patrick Buchanan. Both, however, are simply wrong in this regard demonstrating that they do not have a grasp of the most basic of economic principles.

The latest Trump tirade on trade was reported during his recent trip to Europe and a meeting with high-ranking officials. Trump is reported to have lashed out at German auto makers who the President accused of being “very bad” because of the “millions of cars that they sell in the U.S.” The Donald bemoaned, “Terrible, we’re going to stop that” and added “I don’t have a problem [with] Germany, I have a problem with German trade.”*

Such talk makes Trump sound like a fool. What is “bad” about providing American consumers with first-class automobiles that they apparently want in large quantities and are voluntarily willing to pay for? And what of American workers employed with Mercedes Benz, BMW, and Volkswagen? What is so horrible about the jobs and income that is provided by German firms to these workers?

Instead of berating German car manufactures, Trump should direct his ire at the immigration policies of psychopathic politicians like Frau Merkel. Candidate Trump was very vocal about this and criticized European leaders for allowing their countries to be turned into multicultural cesspools.

The benefits of free trade and the baneful consequences of protectionism have long ago been elucidated by right-thinking economists, while the historical record has shown that lands which engage in “free trade” are decidedly richer than those that do not. That Trump could spout off such nonsense about the evils of German trade shows how far the level of economic understanding has fallen.

Not only does free trade allow for the extension of the division of labor and specialization, but it has very important non-economic fruits. When trade is unregulated, there is less of a tendency of trading partners to engage in bellicose actions toward each other. Free trade and peaceful coexistence among nations are synonymous. It is when trade is prohibited, skewed by governments to “protect” favored industries, which creates tensions among peoples.

Free trade does not require measures such as NAFTA or negotiated deals by politicians. Instead, producers of one region are free to sell their goods at whatever prices or quantities to consumers of other areas that agree to buy them. Ultimately, trade is up to individual producers and consumers in what they contractually agree to exchange, there is no need for political involvement.

Trump’s lambasting of the German auto makers, however, underscores a more fundamental problem with the U.S. economy. America no longer produces goods that the world’s consumers desire, but instead, produces military hardware that it sells to despotic regimes which enables them to remain in power and wreck havoc on their enemies. Predictably, this escalates tensions abroad while, domestically, the standard of living of Americans fall as scarce resources that could have been used in the production of useful consumer goods are diverted to the creation of murderous military armaments.

Trump has repeatedly boasted about his and his appointees’ abilities to negotiate great trade “deals.” His bashing of the German auto makers right after his multi-billion dollar arms sales to the Saudis show not only that he is clueless in regard to the immense benefits of free trade, but that he is just another adherent, like his predecessors, to the ideals of crony capitalism.

*Tyler Durden, “Trump Slams ‘Very Bad’ Germans for Selling Millions of Cars in US: ‘We Will Stop This.'” Zero Hedge 26 May 2017. http://www.zerohedge.com/print/596683

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