I don't have very high regard for Donald Trump as anyone who reads these letters knows, and he has confirmed my negative opinion daily since he was inaugurated. He has ordered renewal of plans to build the Keystone XL pipeline though he obviously doesn't even know what it would be for or where it would run. He has reiterated his ill-founded determination to build a wall between us and Mexico, overseen the silencing of the EPA's scientists, persisted in his false claims about Hillary Clinton's margin of victory in the popular vote, moved to prohibit immigration of Syrian refugees despite the fact that no Syrian has been involved in any terrorist act in this country, and on and on. But I have to admit that I agree with him in principle about one thing.
I'm no Nostradamus epigone. I don't even claim to be the second coming of Baba Venga or Jean Dixon. But I have recounted before what I consider to have been a prophetic conversation I had with a friend as we walked to lunch in Boston in about 1976. The UAW was negotiating with the car companies on its next contract, and the goal was $25 an hour in wages and benefits. That was a lot of money back then, and I said to my friend as we walked that such demands were effectively exporting our standard of living; "nobody is going to pay an American $25 an hour to put lug nuts on a Ford when he can pay someone $15 an hour to put lug nuts on a Toyota," I said. And sure enough, over the past forty years, most of our manufacturing--ironically not automobiles though as even the Japanese make many of their cars here--has gone abroad, to countries that pay less, and often times not nearly enough, to workers. Manufacturing has become international, and it has cost us in terms of jobs, but in other respects as well. It used to be the case that saying that something you owned was "imported" was a form of braggadocio, but now, it tends to mean that the quality of the thing probably isn't quite what it should be. "Made in China" now means what "made in Japan" meant after World War II: this thing is junk. And it's not much different when it comes to things made in Bangladesh, Vietnam, Pakistan, India or several other manufacturing giants that pay children and their parents bare subsistence wages to work in unsafe conditions to make our one-size-fits-all socks, our dress shirts with sleeve lengths measured in two inch increments from one size to the next instead of one inch, shoes that come in only one width as if all of our feet were the same, and pants with waist sizes that reflect non-standardized American self-delusions about our weights rather than actual measurements in inches. We have not just exported our jobs, we have exported our commitment to quality as well, and it hasn't been well maintained in many, many cases.
So now comes Donald Trump with his border tax plan. It is directed at American businesses who manufacture things abroad and then sell them here. He wants to tax every manufactured good that crosses our borders to be consumed here after being made abroad no matter who made it, and I applaud the idea. It isn't popular among the experts who all see world trade as talismanic in economics these days, but the fact is that we run a trade deficit in the billions of dollars every month, and it isn't as if we get anything for it. The quality of the goods available to us has declined since I was a kid, and I think that anyone born before 1955 would agree with me, and it is mainly our fault as consumers. We buy cheap, and as a result, we have in our homes tables made in China that we brought home in boxes and put together ourselves rather than tables made in North Carolina and delivered whole. And that is understandable in light of the fact that our real wages didn't significantly rise from Ronald Reagan's presidency until just a few months ago under Barrack Obama. But those tables could be competitively made in pieces and put into boxes here just as well, if only the Chinese, or the Indians, or the Vietnamese would pay their workers a fair share of the money being made on them. That's where Trump's plan to tax manufactured goods coming into our country across our borders makes sense. American made goods could compete in terms of price with those made in countries that keep their industrial workers impoverished, and we could then begin to reclaim our standard of living and our standards of quality. If there were no longer a price advantage to settling for something less, we would stop buying something less and demand what we used to get: quality. And we wouldn't have to rely on unfair labor practices to do so either.
The consequence would certainly be a more isolated economy as internationally made goods would become less competitive with goods made domestically. And we would still need to do something about the disparities in our wealth and income between the 1% and the rest of us who make their money for them, not to mention what they wear and drive. But an import tax that induces American companies to stay home when they build manufacturing facilities would be a good start, albeit at the expense of the rest of the world, and I'm not unmindful of that. We still need to think about the people who need to work somewhere in order to keep body and soul together, but the best solution to that problem is probably to make "imported" mean something admirable again..."made in America" too.
Your friend,
Mike
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