Clueless Trump Demands You Pay More For Less: He Says So Himself

-edited

In another absurd Tweet, Trump lashes out at the Fed and a US dollar that supposedly buys too much

Pay More and Receive Less

https://twitter.com/realDonaldTrump/status/1138427450927529984

Trump is clearly upset that the US dollar buys too much stuff.

Those on fixed income, those wanting to buy a home, and anyone with an ounce of common sense knows Trump is an economic illiterate fool.

Standards of living rise when people get more for their money. Over time, things that only the wealthy can afford become more affordable when the dollar buys more than it used to.

Trump proposes economic stupidity at its finest.

Since the Fed generally agrees despite the Tweet, it explains the demise of the middle class.

Trump is as at least as economically clueless as the Fed he rails against.

Mike "Mish" Shedlock

Comments (26)
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2banana
2banana

And a higher dollar makes US exports noncompetitive.

And one of Trump's goals is to bring back manufacturing (and the decent jobs in that sector) back to America.

So stop with the name calling.

And PS.

Those "those wanting to buy a home" were absolutely destroyed by obama's QE and ZIRP and the asset bubbles that went along with it. Funny, I don't remember you calling obama clueless.

And this is where you show your ignorance.

"Standards of living rise when people get more for their money."

No - standards of living rise when a country/population can CREATE wealth. As in more mining, farming, manufacturing, R/D, utilities, productive infrastructure, etc.

Shuffling papers, taking out home equity loans (due to asset bubbles), buying Chinese crap and using slave labor of other countries to make things does not raise standards of living.

Hard work, sacrifice, creating wealth, savings and a government not bent on socialism raises the standard of living for it's non 1% citizens.

RonJ
RonJ

Edge of the double sword.

"Standards of living rise when people get more for their money. "

The standard of living has been declining. An unemployment check does not pay as well as a factory job that disappeared when it moved to China.

Esclaro
Esclaro

I can see Mish really got Trump’s cult members riled up. Logic and reason will never change the mind of a true believer. If Trump told them to run into traffic there they would be!

Carl_R
Carl_R

All a country can do is try to run it's economy efficiently, and let the free market do the rest. In that case, the jobs you don't want (toxic pollution, low economic value) get exported, and the high value jobs (e.g. medical research) get retained. The US does many things well, and thus we have a high standard of living. We also do a few things that make no economic sense.

The first obvious thing that make no economic sense are to continually raise the minimum wage. That makes small businesses non-viable, stagnating the job creation, innovation, and creativity that usually originates in smaller businesses. It also forces businesses to export jobs whose value is below the minimum. In the absence of a minimum, jobs would be retained in the US until demand for workers raised the price of labor higher, and only those jobs which had a value less than the market rate for labor would be exported. Furthermore, if a company in one part of the country could not produce something economically, they might move the production to another part of the country where labor was more readily available. That used to happen all the time, but now there is no reason to do that, because the labor rates are the same, so instead they have no choice but to send the job overseas, or be put out of business.

The second economic insanity is to have a non-integrated welfare system. For whatever reason, the US has an ad hoc welfare system that is cobbled together from countless parts that don't work together, some at the state level, some at the Federal level, and others at the local level. The result is that Low Income workers often hit welfare cliffs where they have an effective income tax of >100%. If they make more money, they lose more in benefits than they gain in income, and have less spendable income. There are unemployment programs, AFDC, food stamps, housing assistance, Medicaid, energy assistance, childcare assistance, and who knows what other programs, and none of them are connected to any other. Welfare and assistance is a necessary part of an advanced civilization, but there should only be one program, and it should all be tied together uniformly so that it makes economic sense.

If you fixed these two economic insanities, then the free market would be more efficient, and the US would only export jobs we really don't want. With the insanities, we export far more jobs than we really should. Tariffs and jawboning won't bring them back, given that we've created economic inefficiencies that caused them to be exported in the first place, and especially since we continue to expand the inefficiencies rather than addressing them. For example, given the low level of economic understanding in the US, it is inevitable that we will increase the minimum wage to $15, and the result will be to dramatically increase the exporting of jobs. The same with piling on medicaid expansion without ever considering whether you are creating additional welfare cliffs; it will create additional cliffs, and more people will withdraw either partially or completely from the work force, leaving us with more jobs exported, even as we have people would could do them, but won't because of economic disincentives.

davebarnes
davebarnes

As someone planning a vacation to Europe, I want the dollar to become stronger against the euro. Not that I am selfish in any manner.

Webej
Webej

Trump has launched a dangerous trend, consistently portraying the country that spends more on offense than the rest of the world combined as ... The VICTIM.

Europe and Japan have export surpluses with the USA because they pay workers slave wages and give them 4 weeks mandatory vacation leave? China has an export surplus because it devalues its currency by having higher interest rates than does the USA? Europe and Canada keep America out with high tariffs ... O wait, the weighted tariff rates are virtually equal and the USA has a surplus on services. Simple solutions are the solution to simple problems, but issues don't become simple by trotting out simple solutions (bombs, sanctions, threats, tariffs).

For all the simpletons ... America is not the victim of the rest of the world.

Mish
Mish

Editor

"I can see Mish really got Trump’s cult members riled up. Logic and reason will never change the mind of a true believer. If Trump told them to run into traffic, there they would be!"

Excellent comments by Esclaro, CarlR, and Webej

Thalamus
Thalamus

Trump is talking in the context of trade it's cheaper to buy foreign products and more expensive to sell ours with a strong dollar--the opposite of what you need to reduce the trade imbalance.

Realist
Realist

Strong economies beget strong currencies. Wanting both a strong economy and a weak currency is incompatible.

Trump believes he can have both if he can get the Fed to lower interest rates to manipulate the US dollar lower. I'm sure he will also want the Fed to print as many dollars as possible for the same reason.

However, natural economic forces will override Trumps currency manipulations.

Strong economies beget strong currencies. Both of which make the country wealthier and raise living standards. This extra wealth allows the country to spend more on imported goods, which will raise the trade deficit.

This can go on forever, provided the country continues to innovate in creating the industries and jobs of the future. Then the country always has a competitive advantage in these new areas. The cost is that you lose your competitive advantage in some of the old economy industries and jobs.

The only way forward is to focus on the industries and jobs of the future. Trying to bring back the industries and jobs of the past is a losing strategy.

TommyTo
TommyTo

Mish, is there a reason that you are constantly calling politicians clueless. Could it be that u r clueless?

Has it ever occurred to u that politicians and the elites personally profit from "nonsensical" policies? Of course they do, thats why fiat currencies exist in every country. Keynes said so himself. Clueless implies that they don't know what they are doing. They know exactly what they are doing. They are not concerned with inproving the economy. They are concerned with lining their pockets with real weslth while creating the illusion of a nominal economy.

They are evil. You are clueless.