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The merits of Trump's economic agenda



The relentlessly negative depiction of Donald Trump in American, Australian and other English-speaking media is as fascinating as it is suspicious. It is one subject where there is not even a pretence of journalistic balance.

Donald TrumpTrump is depicted as offensive, bigoted, racist, sexist, psychologically unbalanced, an enormous threat to democracy, a security threat, a puppet of the Russians, the 'Siberian candidate' and worse.

Google the words 'Trump' and 'Hitler' and 23 million hits come up, including images of the Republican presidential candidate with a photo-shopped moustache. The Daily Beast opines that he is not really a 'Hitler'; he is more 'like Goebbels'.

Trump certainly has some troubling attitudes. But a different perspective emerges when his utterances are examined from a financial and economic perspective. Although his message is far from consistent, there is a semblance of good sense.

To understand, we need to start with the famous speech by President Eisenhower in 1961. 'In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.'

More than half a century later the military industrial complex Eisenhower feared would emerge dominates the globe. America spends more on its military than the rest of the world combined. Meanwhile, the nation's physical and social infrastructure is crumbling, in part because almost all of the Federal Budget is taken up by military expenditure and Medicare (health care for people over 65).

America has almost 1000 bases around the world compared with Russia's three and China's two (it is planning to expand the number in the Middle East).

The disastrous war in Iraq, fought on a false pretext, was hugely expensive. Economists Joseph Stiglitz and Linda Bilmes calculated that the true cost of the second Iraq War was $US3 trillion, not the $50 billion projected by the White House at the start of the war. The waste in lives from America's wars is well documented; less examined is the massive financial waste.


"Trump is on solid ground when suggesting that heavy military investment is bad economics and a major factor in what he calls America's 'decline'."


Trump represents a serious threat to those who thrive in this military-industrial system. He persistently questions why America spends so heavily on NATO, has suggested that a good relationship with Russia might be economically beneficial and has implied that excessive militarism is linked to the decline in the living standards of working Americans. This is in stark contract to Clinton. As the economist Jeffrey Sachs noted: 'There's no doubt that Hillary is the candidate of Wall Street. Even more dangerous, though, is that she is the candidate of the military-industrial complex.'

Trump is on solid ground when suggesting that heavy military investment is bad economics and a major factor in what he calls America's 'decline'. Military investment does not have what economists call a multiplier. If you spend $1 million on a tank, the best thing that can happen is you never use it. If you spend $1 million on infrastructure, health, education — or pretty much any other area of the economy — it will lead to more economic activity, usually at least another $1 million.

It is one subject on which economists, from all over the political spectrum, agree: Sachs, Stiglitz, Paul Krugman, Alan Greenspan, Ludwig von Mises, Larry Summers, Dean Baker, Chalmers Johnson, among others. Even the claim that military spending for World War II is what got America out of the Great Depression has been shown to be false.

More remarkably Trump has proposed that something be done about the policies that led to the global financial crisis (GFC), whose effects persist. The main legislative catalyst for the GFC was the repeal, in 1999 by Bill Clinton, of the Glass Steagall Act, which had prohibited commercial banks from engaging in the investment business. This allowed the investment banks to indulge in the debauch of financial invention that almost destroyed the world's monetary system in 2008. Trump, in a startling initiative, has made the reinstatement of Glass Steagall official Republican policy. Should that happen, it would arguably be the most beneficial development in the global financial system for decades. Little wonder that all the big money is going to Clinton.

Trump's move reverses right wing ideology, which, although nominally socially conservative, has for decades been financially and economically radical. It is a rare example of genuine conservatism and a threat to the neo-cons

As commented, the big money is backing Clinton; she will be outspending Trump on advertising by a ratio of about 100 to 1. This may be one reason — another is that it is the easy story to produce, a version of celebrity gossip and melodrama — why the mainstream media seems to have taken leave of its collective senses (if it ever had them). The media will receive much of that ad spend. Trump will no doubt end up looking like Hitler, Goebbels, the Devil, a racist, a bigoted boor, a Russian spy or worse.

But it is worth looking a little closer at what he is saying and wondering exactly why the presentation of his candidacy is so extreme and who benefits. It might also be worth asking why Clinton deleted tens of thousands of email messages from her private server — and why she needed a private email server in the first place. And it might be interesting to know where that $US250 million in the Clinton Foundation came from.


David JamesDavid James is the managing editor of businessadvantagepng.com

Topic tags: David James, Donald Trump, Hillary Clinton



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Existing comments

An excellent point about what Trump's people have floated; but it is silly to pick on the media for lambasting this candidate. I need not go into the thicket of idiocy, lies, insults, and more lies that draw such attention; the attention is what he craves. There would be no serious candidate at all if the media did not sprint toward him when he opens his mouth; but there are billions to be made for media coverage of this wonderful actor.

Brian Doyle | 09 August 2016  

Hitler too must have made the odd good point, but overall was a monster. Trump is not in Hitler`s class but he does seem hate-filled, prejudiced, bigoted, and potentially unbalanced and politically dangerous. His overtures to Russia have merit too, but one also has to remember the Putin runs a nasty kleptocracy which supports Trump financially. Hilary is flawed but surely must be the better of the two, even by a landslide?

Eugene | 09 August 2016  

Most of us might require more than a "semblance of good sense" in a candidate's policies before ignoring the multitude of idiotic, cruel and destructive remarks and intentions publicly stated as part of his platform.

Steve Daughtry | 09 August 2016  

I beg to differ regarding David James support for Donald Trump. While no doubt the media has had a field day attacking his various speeches, the content of those speeches reveals a man who seems to have a grandiose opinion of who he is. His intolerance of anyone who disagrees with him , even to an unsettled baby upsetting his speech, shows a persona who represents a real danger to the wellbeing of the world as we know it. While Clinton is not an ideal alternative and represents the political elite, at least she has been exposed to the reality of high Office , as the wife of a President and as a senior member of the an Administration . What worries me about Trump is his unpredictable behaviour. As I mentioned to my family, last night, I would hate to work for him in one of his enterprises. I doubt you would know form one day to the next if you still have a job! I thought Ronald Regan was a great actor but a lousy President. God know what to make of Donald Trump!

Gavin | 09 August 2016  

These remarks are at least as selective as the coverage of Donald Trump's utterances which the author criticises.The fact that some things Trump says might have 'a semblance of good [economic] sense does not in any way justify the argument here, which suggest some sort of conspiracy to ignore his valuable contributions and, instead, depict him in a negative light. Actually, much of the media coverage this candidate has received uncritically conveys his often bizarre and grotesque views. The mass media have given this candidate such attention that he has, so far spent very little on publicity. It is Donald Trump who expresses extreme and offensive views, providing fodder for sensationalism media coverage. His numerous misstatements, contradictory, inconsistent speeches, tweets etc gain him immense attention. Thoughtful commentary is available in serious media but there is very little policy substance from Mr Trump to which they can apply analysis. So far, Hillary Clinton has been subjected to much harsher scrutiny than has Donald Trump.

Myrna | 09 August 2016  

You are quite correct that the Depression did not end as a direct result of WWII. It ended because people finally recognised that self interest wasn't working and that cooperation, creativity, and compassion were better options. Sadly, to paraphrase Lloyd Bentson, Trump is no FDR. Your points about military spending are valid but I'm not sure that Trump has ever said anything remotely similar. I'm having a bit of trouble picturing Trump redirecting money tagged for new tanks into state education somehow. Call me cynical but there you go.

Tony Thompson | 09 August 2016  

As James points out, Trump's boldest and most attractive idea is to challenge the military-industrial complex. The problem is, once he gets a whif of the truckloads of money that global industrialists are ready to dump in his lap (funding Clinton to the tune of over $600 million so far) will he be able to resist? To do so would require integrity. And if you don't acquire personal integrity as a value growing up, you can only learn it by being undone by your own hubris. After three personal bankruptcies, countless failed business ventures and over 3,000 personal lawsuits Trump doesn't seem to be heading that way just yet. Why would any serious commentator expect Trump to find it on the way to the White House? Wouldn't a victory reinforce all his negative traits? Encouraging people to vote for Trump because he can follow a teleprompter is not a great idea. I think the military industrial complex would be relishing the thought of a a narcissistic, avaricious megalomaniac in power. He speaks their language.

Tom | 09 August 2016  

It's also worth noting here that Trump's Detroit speech marched right back to the usual Republican economic idea that taxes should be cut on the wealthy alone. I also might observe that a man who claims to be a billionaire who refuses to show his tax returns, who has been sued repeatedly for fraud and deceit and nonpayment of bills, is not a man I would bother to listen to on any economic or financial idea at all.

Brian Doyle | 10 August 2016  

A few decades ago, the globalization agenda was pushing free-trade and privatization as the panacea of all economic ills. Opponents to globalization were painted as neo-socialist throwbacks. But opposition to globalization brought together some former bitter enemies, Bob Santamaria and ALP firebrand Clyde Cameron, with Cameron writing several articles for Santamaria’s Newsweekly magazine. Globalization has been a boon for countries like China and Vietnam which rejected their centralized economies and embraced the market economy, and for many Western multinationals. So who lost from globalization? A recent report from McKinsey Consulting has found that real incomes have stagnated or declined in 65 to 70 percent of households in the developed world. That is, the developed economies suffered by the destruction of their manufacturing bases. Donald Trump is threatening to throw out all trade deals which have disadvantaged American workers. Opposing Trump are multinationals and the wealthiest citizens—Bill Gates, Warren Buffett, Larry Ellison, George Soros, and the wealthiest foundations like Mellon, Bloomberg and MacArthur Foundations. Reading today that the worth of the Commonwealth Bank is around $134 billion, when it was sold for around $5 billion, one can see why the wealthy would oppose changing the status quo.

Ross Howard | 10 August 2016  

Some good points made in your article. It appears then that citizens of the USA have to choose on the principle of "the lesser of two evils." If only Trump was not such a loose cannon making extraordinary statements about building walls on the Mexican border for example. I sympathise with my American friends: seems to me they have little choice if they want a coherent policy maker and experienced politician as their next President.

Ern Azzopardi | 11 August 2016  

Eisenhower recognized military expenditure was an issue but his comments have to be seen in the light that he wanted military defence to rely on a 'cheaper' option of strategic air command using nuclear weapons rather than conventional arms which could not match the Soviets in Western Europe. It must be remembered during Eisenhower's time both Iran and Guatemala were destabilized by the Americans. In fact, one could argue Eisenhower planted the seeds that would lead to many bitter fruits in later American foreign policy.

Nicholas | 12 August 2016  

Thank you for the FIRST balanced article that I've read on Trump!

Michael | 12 August 2016  

Many people keep forgetting that Americans do hot have to vote for Trump or Clinton. Both are very flawed candidates. Hilary is considered as a war criminal by progressive Americans who want their nation to play a more peaceful and fairer role in international affairs. Jill Stein, the US Greens presidential candidate, is standing on a platform for peace, justice, human rights and the environment. Americans should be encouraged to vote for such a positive candidate, but many people do not even know that she is a candidate because the western media - especially in the US - is not publicising her.

Andrew (Andy) Alcock | 13 August 2016  

I am not sure that's true, that the US media isn't publicizing Stein (or the other serious non-Republican or Democratic candidate, Gary Johnson); it's just that it appears past obvious that neither will get anywhere near the vote necessary to unseat the major party candidates. The media here as everywhere is interested in drama, conflict, rage, sin, stupidity, greed, arrogance, and flash; those things get more clicks and views and buyers than do things like sense, reason, humility, grace, and patience. I'd guess that US media have made more money on this election than on any other ever, because the major candidates are so controversial; one a roaring colorful idiot and the other widely distrusted. Poor Romney and McCain -- either of them might have easily defeated Hillary this year, but...

Brian Doyle | 24 August 2016  

It sounds like Bernie Sanders' ideas for the economy, only much more daring. All very confusing. Can't trust what you see or hear or read anymore & all too soon when you start getting personalised ads and news coming off the walls at you as you go down the street what'll you do?

Jillian | 05 October 2016  

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