Am I a Trumpist?

After hearing me talk about New Brunswick’s trade deficit and the risk of both losing export markets and becoming more reliant on imports, someone commented that I sound a lot like Donald Trump.

I assume he meant in concept not tone or style. I’m not suggesting Ontario was created to screw over the Maritime Provinces (although, come to think of it….). JK!

Like everything in life, it is important not to boil complex ideas down to simplistic binaries - either all good or all bad.

I put up the inflation data on LinkedIn not that long ago showing clearly that consumers have benefitted from free (ish) trade - computers, electronics, clothing, etc. - just about everything we import has seen price increases well below the goods and services that we don’t import.

My point is that at a provincial and national level, free (ish) trade should force a jurisdiction to buckle down and develop export industries for which it has a strong value proposition (comparative advantage). The reason for the buckle down is that if an economy moves too much from producing to just consuming goods imported from elsewhere it does make it hard to have a strong and growing economy over time. And without a strong and growing economy it becomes hard to support high cost public services such as health care.

And I do believe this is a particular risk for small places like New Brunswick. If people resist natural resources development and immigration, coupled with a push for even freer interprovincial trade, New Brunswick could end up with an even weaker economy even more reliant on Ottawa to fund basic public services.

That doesn’t make me a Trumpist.

It’s important to reiterate that Trump is deceiving the Americans on many levels when it comes to trade. He doesn’t tell his fellow Yanks that the US has a huge trade surplus in services. He doesn’t tell them that, on average, US exports are much higher value than imports (exporting defence kit and importing Old Navy tee shirts). He doesn’t talk about investment flows which have been very favourable to the US. He doesn’t talk about the thousands of US companies that have a global footprint but their head offices in the US - Walmart, etc, and the many high paying head office jobs.

He just looks at poor Indonesia and thinks he can extract money from that country to pay down the federal government deficit because they can’t get their public spending under control.

What will likely happen is a combination of inflation and possibly weak or negative economic growth (stagflation). Because no one has ever really tried something like this - who really knows? It’s unlikely textile producers in Indonesia or diamond mines in Botswana will move to the United States.

I think it is fair to say I am not a Trumpist in tone, style or content.