Smoot-Hawley-Trump

OK, now he's scaring me. There is a possibility that Donald Trump could become President of the United States. He was on the news yesterday in an interview saying that as president he would undo the trade arrangements we have negotiated over the years, starting with NAFTA. He would adopt protectionist policies reminiscent of the Smoot-Hawley Act of 1930, emblematic if not the primary cause of the Great Depression. Whether the rest of the world would follow suit as it did after Smoot-Hawley is doubtful. They recognize the importance of trade to their prosperity if Mr. Trump does not. But it would certainly retaliate, pitting the United States against the world and isolating us as we have never been before. Whether a President Trump could get the necessary legislation through congress is also doubtful but, oath of office not withstanding, presidents don't necessarily uphold laws they don't like. We live in dangerous times. The scary part is that so many of us are listening to this man. We are so angry we would fight fire with fire. Rather than insisting on a return to the rule of law we would fight lawlessness with lawlessness. Stick it to the Chinese, and the Japanese, and the Mexicans. That will show them. Deport the illegal immigrants, all twelve million of them. Don't ask how, just do it. Build the wall. Mexico will pay for it, even if we don't trade with them any more. We all need to take a deep breath, remember a little history, and do a little critical thinking. NAFTA would be a good place to start. Yes, there were winners and losers but most economists agree that Canada, the U.S., and Mexico all benefitted enormously from the agreement, as we have from the steadily improving trade environment generally since the end of WWII. Mexico is emerging as a middle class country. Net immigration from Mexico has been zero or negative for several years now, in part because of NAFTA. NAFTA can be improved but any improvement should encourage more trade, not less. The Trans Pacific Partnership, which includes Canada and Mexico and is currently awaiting congressional approval could be an enormous improvement if it does what it's backers say it does. One can only hope TPP gets a thorough and informed airing. Right now it is being heavily demagogued with Mr. Trump leading the charge and Mrs. Clinton joining in, if with softer language. It's not encouraging. The World Bank recently announced that global extreme poverty has declined in absolute terms to its lowest level in years, and in percentage terms to its lowest level in history. A huge new middle class has appeared, not just in Mexico but in much of what was once the third world. It is worth asking why. Improved governance, lower corruption, technology, globalization, and trade all play important roles. A Trump presidency could set that process back decades, though in fairness draconian measures championed by many democrats to reduce carbon dioxide emissions could do even more damage, perhaps stop it entirely. But my focus here is on trade. Interstate commerce has always been one of the principle drivers of American prosperity. The individual states cannot interfere with it. We can thank the founding fathers for including the commerce clause in the constitution. For more than seven decades, beginning with the Bretton Woods Conference in 1944, international commerce has been a driver of the greatest economic boom the world has ever seen. The United States has been a prime mover in that. It would be a profound tragedy for us to turn our backs on it now. As I said. Donald Trump is scaring me.