Did you hear what the president just said to Congress? During his latest address, this leader said what free-market advocates have been wanting to hear from a world leader for years. Unfortunately, the president I’m referring to here isn’t the one you might think it is, or who you might want it to be. Let’s take a look at this leader’s words, with the identifying country language omitted for the moment.
“We need to give back to [name omitted] the freedom to trade with whomever they wish, so that goods and services can enter the local market and everyone can freely buy better quality products at a better price. For decades, under the premise of protecting a handful of jobs, the cost of living was deliberately made more expensive for millions of [name omitted].
“In many cases, even forcing them to purchase goods of dubious quality at completely distorted prices. It is not fair that only those who can afford a trip abroad can buy what they want at international prices. It has to be for everyone. Opening markets will also open the doors of the world to [name omitted] companies so that they can sell our products to 8 billion people, in an international context where what [name omitted] has to offer will be in great demand.
“I also want to put an end here to another fallacy, which they have been using to lie to us for almost a hundred years, and that is the issue of the infant industry, an infant that is at least 90 years old. Or, let’s say, to protect industry X, because it generates jobs. That is also another lie. Because if in the process of opening up the economy, a better quality or better-priced product enters and a company goes bankrupt, it is also true that consumers now have more money in their pockets and can spend it in other sectors of the economy.
“Therefore, employment will be reallocated and will go to sectors where it is more productive and where there are higher wages and, therefore, there is greater welfare for all. Therefore, enough of the protectionist lie, because, in the end, it is nothing more than a scam between politicians and rent-seeking businessmen.”
Now, can you guess who said these beautifully profound and eminently pro-capitalism, pro-free market words?
If you guessed President Trump in his address last night to Congress, you would be wrong. In fact, our president said nothing of the sort. Instead, he said much of the opposite, proclaiming:
“Whatever they tariff us, we tariff them. Whatever they tax us, we tax them. If they do non-monetary tariffs to keep us out of their market, then we do non-monetary barriers to keep them out of our market.” The president then said, “We will take in trillions of dollars and create jobs like we have never seen before.”
Now, I’ve written in detail about how this idea of “taking in” money from foreign governments is just factually incorrect. It is American companies who pay tariffs on imports, not foreign governments. Yet, what is troublesome from my laissez-faire standpoint is that the person who said the profoundly beautiful things about tariffs and trade is who President Trump describes as his “favorite president.”
That president is Javier Milei of Argentina, who has emerged on the world stage as a force for freedom, fiscal responsibility, free markets and free minds. Milei knows what most rational economists know, and what countless economic analyses and centuries of trade history tell us about tariffs and protectionism: They are destructive and bellicose forces that hurt everyone.
Hey, there is a reason why they call it a trade “war.”
In a counterfactual world where freedom reigns supreme, President Trump would be well-advised to emulate his “favorite president” and start telling Americans: “… enough of the protectionist lie, because, in the end, it is nothing more than a scam between politicians and rent-seeking businessmen.”
Fortunately, President Trump did talk about things that are very positive and pro-markets, such as the need for permanent tax cuts and the reduction of government bloat.
On the tax front, the president reiterated his tax-reduction proposals and he repeated his campaign promises to kill taxes on tips and overtime. Mr. Trump then did something that we all need more of, and that is the identification of wasteful spending to be cut in the service of a smaller, more rational and more fiscally sustainable federal government.
More of this, please, Mr. President, and less trade war nonsense.
(Note: Thanks to Ian Vásquez of the Cato Institute for the translated excerpt from Milei’s speech to his country’s Congress).
**************************************************************
A Master Aphorist and a Chosen Exit
“The present time has one advantage over every other — it is our own.”
–Charles Caleb Colton
Ever heard the aphorism, “Imitation is the sincerest form of flattery”? Or, how about this slice of profundity: “When you have nothing to say, say nothing.” Both of these famous quips, along with the above thoughts on the advantage of the present, come to us from the writer and cleric, Charles Caleb Colton.
The eccentric Colton was known for being both brilliant and self-indulgent. For example, he was an investor in works of art and he had a large and enviable private collection of valuable paintings. He also collected wine, and he was a renowned marksman. So far, he sounds like my kind of guy!
Unfortunately, Colton’s eccentricity led him to frequent the gaming salons of the Palais Royal in Paris, where he both gained, and eventually lost, his fortune. Sadly, Colton chose to end his own life rather than undergo surgery for an illness. And while this isn’t a final outcome that I think most of us would choose, this kind of exit is, in my view, both admirable and rational. The way I see it, if you own your own life (and I think we all do), then you get to live that life on your own terms. And the way you choose to exit is part of that life.
Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.
In the name of the best within us,
Jim Woods
