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Sunday, December 4, 2016

An Open Letter to Generalissimo Trump

Do you truly not understand the destructive nature of your protectionist policies?

Mr. Trump:

Like a despot drunk and delirious with power, you bellowed recently that “[c]ompanies are not going to leave the U.S. anymore without consequences.”

Even if we ignore much that oughtn’t be ignored – such as your unconstitutional promise to use the office of the president of the executive (note: not legislative) branch of the national government to dictate how private companies conduct their business – you reveal appalling economic ignorance.

How do you anticipate business executives will respond to your bullying threats?  Are you truly so stupid as not to understand that among the results of your intimidation is that fewer firms will open in America?  That fewer businesses here will expand?  That those that do open or expand will use a higher ratio of capital to labor because they fear that the greater the number of workers they employ the more likely they are to be victimized by your arbitrary diktats?  That no matter how much you cut the monetary taxes they pay, the uncertainty and absurdity of your promised autocratic rule drastically raises firms’ costs of starting and growing on U.S. soil?  And that each of these inevitable responses to your imperious fulminations will be slower job and wage growth for Americans?

Donald J. Boudreaux

Republished from Cafe Hayek.

  • Donald J. Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, and a professor of economics and former economics-department chair at George Mason University.