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Posts Tagged ‘Donald Trump’

Since I called Trump a big-government Republican during the 2016 campaign and just condemned his capitulation to a spendaholic budget deal, it goes without saying that I’m not a huge fan of the President.

Heck, I also recently criticized his protectionism, warning that additional barriers to trade could offset the pro-growth effect of lower tax rates.

But I like to think I’m fair in my criticisms. I stay away from the personal stuff (other than for humor purposes) and and simply focus on whether liberty is increasing or decreasing.

Today, though, I want to quasi-defend Trump because a professor from the University of Richmond wrote a really strange column for the Washington Post with a very bizarre assertion about Juan Perón, the populist post-World War II president of Argentina.

It’s en vogue for enraged liberals to compare Trumpism to Argentine Peronism, wielding the analogy as a warning about the potential apocalypse that they fear is about to engulf us. …Like so many familiar historical cliches, however, this one is incomplete, if not downright wrong.

The professor who wrote the piece, Ernesto Semán, wants us to believe Perón is someone to admire, sort of the Argentine version of Bernie Sanders.

…the core of Peronism was a vision that is the exact opposite of Trumpism. Peronism led a process of expanding economic equality, collective organization and political enfranchisement. …Juan Perón presided over a process of massive wealth redistribution on behalf of the emerging working classes. …his government increased its intervention in the economy and provided…free public health care and education for everyone, as well as a wide array of union-managed social services. Peronism enacted strong regulations on private capital… Argentina’s social transformations resembled in some ways those that took place in the United States during the New Deal. Perón certainly thought so…in 1946 quoted entire paragraphs from President Franklin Roosevelt’s second inaugural address.

And he says that today’s Democrats should embrace Perón’s policies.

…comparison of Trumpism to Peronism…ignores how in fundamental ways the two are polar opposites… Instead of fearing Latin American populism, …Democrats should look to it as offering a potential path forward for a more equal and fair country.

Wow. This isn’t quite as bizarre as arguing that Venezuela should be a role model (looking at you, Bernie Sanders, Joe Stiglitz, and others), but it’s close.

Here’s everything you need to know about Peronism, from a 2014 article in the Economist.

The country ranked among the ten richest in the world…its standing as one of the world’s most vibrant economies is a distant memory… Its income per head is now 43% of those same 16 rich economies… As the urban, working-class population swelled, so did the constituency susceptible to Perón’s promise to support industry and strengthen workers’ rights.

Takes a look at this chart from the article showing Argentina’s per-capita GDP relative to other nations. As you can see, the country used to be much richer than Brazil and considerably richer than Japan. And all through the first half of the 20th century, Argentina was not that far behind the United States and other wealthy nations. But then look at the lines starting after Perón came to power in the late 1940s.

In other words, Peronist policies reduced the comparative prosperity of the ordinary people.

Just like similar policies have reduced the comparative prosperity of ordinary people in Venezuela.

What makes these numbers especially powerful is that convergence theory assumes that the gap between rich nations and poor nations should shrink. Yet statist policies are causing the gap to widen.

I put together a chart back in 2011 showing the relative rankings of both Argentina and Hong Kong. As you can see, Argentina used to be one of the world’s richest nations. Indeed, it was the world’s 10th-richest country when Perón took over. And Hong Kong was relatively poor. But look at what’s happened over time. Perón’s statist policies produced a steady decline while Hong Kong’s laissez-faire approach has now made it one of the richest jurisdictions on the planet.

Yet Mr Semán says we should copy Perón. Go figure.

Let’s conclude by circling back to Trump. Semán is upset because some people are equating Trump (who he despises) with Perón (who he admires).

I’m vaguely sympathetic to part of his argument. He’s right that Trump’s version of populism is not the same as Perón’s left-wing version of populism (basically the Bernie Sanders agenda).

But since I care about the less fortunate, I have nothing for disdain for Semán’s assertion that Perón’s policies should be adopted in America.

P.S. Given his remarkable level of  economic illiteracy, you won’t be surprised to learn that Pope Francis was influenced by Peronism.

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I’ve received several emails and Facebook messages asking me why I haven’t written about Trump’s recently unveiled budget proposal for the 2019 fiscal year.

My answer is that I don’t want to waste my time.

Let me explain what I mean. I wrote during the 2016 campaign that Trump was a big-government Republican.

But when he got elected and appointed some good people to fiscal positions, I decided to partially suppress my concerns. After all, maybe I was wrong.

So I wrote last year about his budget and praised specific provisions (dealing with government-funded media, food stamps, government-funded art, foreign aid, OECD subsidies, community development block grants, and Medicaid).

And I even outlined the strategy that was necessary to achieve success, at least with regards to so-called discretionary spending. But I included a very important postscript as part of that column.

P.S. I’m not convinced that Trump actually wants smaller government, but I hope I’m wrong. This upcoming battle will be very revealing about where he really stands.

Well, that battle occurred and the result was a disaster for taxpayers. The budget caps were busted again, with the net effect being even worse than the big-spending agreements back in 2013 and 2015.

But it’s not that the Trump Administration lost. They never even tried. The folks I know on Capitol Hill said the White House didn’t lift a finger to urge spending restraint, much less fight to limit budgetary growth. Never.

And the painful experience of the profligate Bush years taught me that most Republican Senators and Representatives will partake in a spending spree when they sense the White House is soft on the issue (the common excuse I get from them is that “the floodgates have opened, I can’t do anything to stop it, so I may as well get a chunk for my voters”).

What’s extra depressing is that Trump’s fiscal incontinence is actually par for the course for Republican presidents, at least in recent decades.

I recently crunched the numbers for every president since the 1960s who served at least one full term, and I measured the average annual growth of government spending (adjusted for inflation) for the years they held power.

Moreover, I sliced and diced the numbers in several ways. I wanted readers to understand what happened to total spending (the combined growth of defense and domestic outlays), as well as what happened to domestic spending.

And the bottom line is that Republicans generally do worse than Democrats. Not just on total spending. They’re even more profligate on domestic spending!

The only exceptions to this pattern are Reagan (the only good Republican) and LBJ (the only really awful Democrat).

By the way, I’m not claiming that Clinton, Carter, or Obama were fiscal conservatives or that they believed in small government. I’m simply pointing out government grew slower when they were in office, at least compared to the growth of government under Nixon, Bush I, or Bush 2. The numbers don’t lie.

I suspect these counter-intuitive results are because of two factors.

  1. Presidents try to deflect and/or preempt criticism, so that leads Democrats to be cautious about spending money (they don’t want to be called “big spenders”) and it leads Republicans to squander a lot of cash (they don’t want to be called “heartless” or “mean”).
  2. The party controlling the White House often loses seats in mid-term elections and that subsequently limits the ability of presidents to push an agenda that is opposed by the other party, or even leads them to acquiesce to initiatives pushed by the other party.

Needless to say, this is rather depressing for those of us who want to limit the size and scope of government. It’s quite likely that Trump will spend the next three years or seven years instigating and/or accepting bigger government. And then we’ll probably have a Democrat in the White House who will – at least for the first two years – push for even more government.

But I get more upset when Republicans are big spenders because they should know better. Most Democrats actually believe it’s a good idea to make America more like Greece. Republicans, by contrast, make us more like Greece because they put short-term politics ahead of the national interest.

Let’s close this depressing column with some anti-GOP humor, starting with a look at how libertarians see Republicans (h/t: Reddit‘s libertarian page).

Reminds me, for obvious reasons, of my “Charlie Brown Award.”

Next we have a gathering of Republicans who actually believe in smaller government (h/t: Reddit‘s libertarian page).

I guess you would say “like father, like son.”

Last but not least, here’s some very clever satire from Babylon Bee.

During a budgetary discussion Friday, Republican lawmakers announced a plan to pretend to be fiscally conservative again if a Democrat takes office again in 2020 or 2024. The GOP said it would begin to decry deficit spending and the $20 trillion debt in order to win votes as soon as political power swung back to the opposing party. “The second a Democrat is back in the White House, we will once again start yelling about fiscal responsibility,” Speaker Paul Ryan said in an address to the House of Representatives Friday. “For now, we will continue to vote for unsustainable and irresponsible budgets that your children’s children’s children will pay for for centuries to come.” At publishing time, Republicans further announced they would pretend to oppose giving Planned Parenthood a half billion dollars year after year once they need conservative voters’ support to regain their offices.

Good dig about Planned Parenthood, needless to say.

But as we laugh about these jokes, just remember that the recklessness in Washington is going to come back to bite us at some point. No, we won’t have a Greek-style fiscal crisis in the next five years. Or even in the next 10 or 20 years.

But more spending and more dependency is not a good recipe for long-run economic health. Republicans understand that and I despise them for putting politics first and country second.

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On the one-year anniversary of his inauguration, I graded Trump’s overall record on economic policy and specifically observed that his trade rhetoric was worse than his trade policy. But I added a caveat about the North American Free Trade Agreement.

…he’s been doing a lot of saber-rattling, but fortunately not drawing too much blood. That being said, he is threatening to pull the United States out of NAFTA, which would be a very big mistake.

Unfortunately, this is not an idle threat. So let’s look at what some experts have said about the value of NAFTA to the American economy.

We’ll start with a column from today’s Washington Post by the CEO of Union Pacific. He worries that the good news on taxes will be offset by bad news on trade.

Freight railroads are the bloodstream of U.S. business, supporting the livelihoods of employees in nearly every sector of the economy. …From my vantage point, it is clear that the recently adopted tax-reform law will provide meaningful stimulus for the U.S. economy. …our economy is on the rise, and tax reform will help generate even more momentum. But America’s potential exit from the North American Free Trade Agreement threatens to undo much of that progress. …About 60 percent of U.S. imports are intermediate goods for U.S. production, so raising costs through what will be functionally higher taxes on production would make U.S. businesses less competitive — thwarting tax reform’s goal of allowing people and businesses to invest their money as they see fit. …executives who are excited about the economic benefits of the tax cuts are facing equal, if not greater, economic losses if NAFTA is eliminated. …At Union Pacific, …nearly 40 percent of our shipments now have an international component — coming from or headed to Canada, Mexico, Asia, Europe and beyond. …it will be critical for the United States to strengthen its most important trade partnerships, not abandon them. …the recent tax legislation is clearly a strong tail wind for future growth and expansion. Let’s not ruin the momentum by abandoning NAFTA.

I fully agree. It’s worth noting that trade policy is just as important as fiscal policy according to Economic Freedom of the World.

Which is why it makes no sense for Trump to undermine his achievement on tax reform.

Here are some excerpts from a study by a Dartmouth professor. He starts by outlining some of the benefits that have been produced by NAFTA.

U.S. trade in goods and services with Canada and Mexico has nearly quadrupled under NAFTA—from $337 billion in 1994 to about $1.4 trillion in 2016. …NAFTA partners have become the largest destination for U.S. small-business exporters. In 2014, more than 125,000 small and medium-sized businesses (SME) exported to Canada and/or Mexico: this was over 95 percent of all U.S. exporters into the NAFTA market. For these small U.S. exporters that year, Canada and Mexico were the top two export destinations. The total value of these 2014 exports was $136 billion, fully 25 percent of all U.S. SME exports. Under NAFTA, cross-border investment among the three member countries has surged as well: from $126.8 billion in 1993 to $731.3 billion in 2016. …A reasonable conclusion from…studies is that NAFTA in its entirety has elevated U.S. GDP by somewhere between 0.2 percent and 0.3 percent of GDP. …boosting U.S. GDP by between 0.2 percent and 0.3 percent means U.S. output and income is somewhere between about $40 billion to nearly $60 billion higher than it would be without NAFTA. …representative studies calculated that NAFTA raised average U.S. wages by somewhere between 0.2 and 0.3 percent–a boost to workers’ wages that, like the boost to national GDP, recurs every year.

Needless to say, wrecking NAFTA would unwind all these benefits.

…studies that have carefully modeled the United States withdrawing from NAFTA share a central estimate of withdrawal damages of about 0.3 percent of GDP. In 2017, a loss of national output approaching 0.3 percent of GDP would have been a loss of about $50 billion. …Withdrawing would reduce trade, lower national output and income, and destroy U.S. jobs and lower average U.S. real wages. In an increasingly competitive global economy, many U.S. companies and their workers would suffer, not win.

Another study had a similarly grim assessment.

…termination of the North American Free Trade Agreement (NAFTA) would have significant net negative impacts on the U.S. economy and U.S. employment, particularly over the immediate years after termination. Termination would re-impose high costs of tariffs on U.S. exports and imports, which would reduce the competitiveness of U.S. businesses both domestically and abroad. U.S. exports would drop, both to Canada and Mexico and globally, as U.S. output becomes more expensive and therefore U.S. businesses would be less competitive in these markets. Foreign purchasers would shift away from U.S. goods and services in favor of lower-cost goods and services made in other international markets, particularly those made in Asia.

This study calculated the economic damage in each state, including estimated job losses.

Mark Perry of the American Enterprise Institute put that data into a map.

Let’s close with Veronique de Rugy of the Mercatus Center, who echoes the observation that Trump may be about to sabotage the benefits of tax reform by throwing sand in the gears of international trade.

…for the first time in decades. U.S.-based businesses can now compete against their foreign counterparts without starting from an immediate disadvantage… The change should result in faster growth, higher wages and more jobs. Unfortunately, those gains may be undone this year with a wrong step on trade. …NAFTA has benefited American business. …But ramping up economic protectionism would undermine these gains and harm the economy. Many U.S. manufacturers have global supply chains, meaning they import materials and other inputs, even if the final product might then be exported. Raising the prices of these goods with tariffs makes it harder for U.S.-based businesses to compete. …Canada and Mexico are our top trading partners. If they were to increase foreign tariffs on U.S.-manufactured goods — absent a free trade pact or as retaliation for new tariffs imposed by Trump — that would significantly harm U.S. exporters.

So why is Trump threatening to do something so foolish?

Based on his public statements, he simply doesn’t understand trade. He thinks it is a contest between countries and whichever one has a trade surplus is the winner. And to fix this supposed problem, he wants to wreck NAFTA unless politicians and bureaucrats somehow have the power to dictate equal levels of trade (sort of like the way class-warfare advocates want to dictate equal levels of income).

This is wrong on many levels.

  • There is zero evidence that a trade deficit is an indication of economic weakness. Indeed, since wealthier people can afford to buy more goods and services than poor people, a trade deficit oftentimes is a sign that a nation has a prosperous economy.
  • Moreover, the flip side of a trade deficit is a capital surplus. In other words, foreigners who earn dollars by selling to consumers in the United States sometimes decide that investing in America is the best use of those dollars. That’s a positive indicator.
  • Last but not least, it’s worth noting that countries don’t trade. Instead, trade is between consumers and businesses and those transaction are – by definition – mutually beneficial. Interfering with those transactions is pernicious government intervention.

The bottom line is that I’m still waiting for someone to successfully answer my eight questions for protectionists.

P.S. Unlike the current president, Reagan had the right approach.

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The good news is that President Trump wants to boost economic growth, which is a laudable goal after the economy’s sub-par performance during the Obama years.

The bad news is that he may sabotage his good reforms of tax policy and regulation with protectionism.

In a column earlier this month for the Wall Street Journal, Robert Zoellick warns about the likely consequences.

The Trump administration has stacked up a pile of trade cases that will come tumbling down early in 2018. More important than any specific case is the signal of a strategy of economic defeatism. …Mr. Trump’s tactic will likely trigger retaliation from other countries. …“safeguards” to block imports of solar panels and washing machines…doesn’t even require a claim of unfairness. …these amount to an overture to the big show: likely withdrawal from the North American Free Trade Agreement, the U.S.-Korea Free Trade Agreement or both. …The president…relies on the support of economic isolationists who find it easier to blame others than to make America more competitive. Killing Nafta would fit the bill.

Charles Hughes addresses the same topic for Economics 21 and specifically explains that the net effect of trade barriers on solar panels will be to destroy jobs.

President Trump approved new tariffs on solar imports… Manufacturing of solar panels is only one component of the solar industry, which employs between 260,000 and 374,000 workers.  Out of this group, only 38,000 work in manufacturing. Even this oversells the number of people whose work would be insulated from competition from imports, as Solar Energy Industries Association estimates that only 2,000 of these solar manufacturing workers make the products covered by the tariffs.  Significantly more people work in installation. Their jobs would be at risk from higher solar panel prices that would reduce demand for installations, with one estimate that the tariffs would cost 23,000 U.S. jobs in the first year.

These numbers are not a surprise. There have been many studies looking at the impact of protectionism and lost jobs are the usual result, both because trade barriers create inefficiencies, reduce consumer buying power, and increase input prices.

As is so often the case, it’s a question of the seen versus the unseen.

But don’t take my word for it. Here’s President Reagan talking about trade shortly before he left office (h/t: Cafe Hayek).

By the way, some people try to justify Trump’s protectionism by citing some protectionist policies during the Reagan years.

As explained by Colin Grabow and Scott Lincicome in National Review, that is historical revisionism.

Trumpist efforts to save U.S. jobs through higher tariffs, bilateral trade deals, and lower trade deficits can find no “conservative” justification in Reagan-era trade actions. In fact, it’s just the opposite. The Reagan administration did indeed pursue unilateral import restrictions and foreign-trade “enforcement” actions, but history shows that — unlike protectionist policies proposed by Trump — such moves were intended to liberalize trade… Reagan also often sought to educate his fellow Americans on the U.S. trade balance, even extemporaneously (and correctly) explaining at a 1985 press conference that trade deficits often correlate with job growth and economic vitality. …Reagan negotiated and concluded the 1988 Canada–United States Free Trade Agreement — the basis for the North American Free Trade Agreement (NAFTA). …Reagan administration negotiators also helped launch the Uruguay Round under the General Agreement on Tariffs and Trade (GATT), which would in 1994 strike the single biggest blow for free trade in the last 70 years by establishing the World Trade Organization (WTO).

Amen. I may have to revise my assessment of Reaganomics and give the Gipper an even better grade.

So what would it mean if Trump’s protectionist push led to similar statist policies by other nations?

A World Bank study gives us an idea of the potential implications.

This paper quantifies the wide-ranging costs of potential increases in worldwide barriers to trade…a coordinated global withdrawal…from all existing bilateral/regional trade agreements, as well as from unilateral preferential schemes coupled with an increase in the cost of traded services, is estimated to result in annual worldwide real income losses of 0.3 percent or US$211 billion relative to the baseline after three years. …Highlighting the importance of preferences, the impact on global trade is estimated to be more pronounced, with an annual decline of 2.1 percent or more than US$606 billion relative to the baseline if these barriers stay in place for three years. Second, a worldwide increase in tariffs up to legally allowed bound rates coupled with an increase in the cost of traded services would translate into annual global real income losses of 0.8 percent or more than US$634 billion relative to the baseline after three years. The distortion to the global trading system would be significant and result in an annual decline of global trade of 9 percent or more than US$2.6 trillion relative to the baseline in 2020.

I wonder if those numbers underestimate the threat given how tit-for-tax protectionism caused much greater levels of damage during the 1930s.

Anyhow, let’s conclude with a very effective (and concise) video from Matt Ridley on the principle of comparative advantage. It’s about trade between two people, but the same principle applies to trade between nations. Simply stated, trade allows for specialization, which enables higher productivity (and therefore higher wages and living standards).

P.S. I also invite readers to watch excellent videos on trade and protectionism from Professors Tyler Cowen and Don Boudreaux.

P.P.S. I also encourage people to read Walter Williams on this topic.

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I gave Trump 50-day grades and 100-day grades, but those were largely speculative assessments.

Now we have a full year of data and that real-world evidence can be used to grade Trump’s first year in office.

But before I get into the details, allow me to start with a broad observation. William F. Buckley famously said that he would rather be governed by 2000 random people from the Boston phone book than by the faculty of Harvard University. Well, one can argue that he posthumously got his wish. The 2016 election was a choice between:

  • Hillary Clinton, a very well-credentialed leftist who would have staffed her administration with other well-credentialed leftists (the Harvard faculty in spirit), who nonetheless was defeated by;
  • Donald Trump, a novice politician who has random-guy-from-the-phone-book opinions (as I described him to a TV audience in New Zealand, he’s “your Uncle who spouts off at Christmas dinner”).

It’s not my role to say whether the American people made the right choice, but I am willing to analyze the economic consequences.

So let’s look at the five major policy areas that determine a nation’s level of economic liberty and see whether Trump is moving America in the right direction or wrong direction.

  • Fiscal Policy – It’s not easy to give Trump a grade because he’s like Dr. Jekyll and Mr. Hyde on the budget. On the tax side of the ledger, he pushed for and ultimately signed a better-than-expected tax bill featuring an impressive reduction in the corporate tax rate and some much-needed limits on the deductibility of state and local taxes. On the spending side of the ledger, however, the first year of Trump has been a disappointment. According to the Committee for a Responsible Federal Budget, he actually approved more than $250 billion (over eight years) of additional outlays. And we haven’t gotten any entitlement reform (though Trump supported the Obamacare repeal legislation on Capitol Hill, which included some reasonably good spending provisions). Trump Grade: B
  • Trade – Trump has moved policy in the wrong direction, though the first year was not as bad as feared. In other words, he’s been doing a lot of saber-rattling, but fortunately not drawing too much blood. That being said, he is threatening to pull the United States out of NAFTA, which would be a very big mistakeTrump Grade: D
  • Regulation – This is Trump’s best issue area. He’s rolled back some Obama-era regulations, and he’s made some very sensible appointments, which means there’s hope of ameliorating the statist orientation of bureaucracies such as the FDA and the FCCTrump Grade: A-
  • Monetary Policy – Trump hasn’t said much about monetary policy, so we can only grade him on the basis of the people he has appointed to the Federal Reserve. But even that doesn’t allow us much room for analysis since his picks have been very conventional. One hopes a Trump-influenced Fed will support a gradual end to artificially low interest rates, but that’s unclear at this stage. Trump Grade: C
  • Rule of Law – Trump has been aggressive with executive orders, which worries me even if I happen to agree with the underlying policy. The White House hasn’t tried to flout court decisions, however, so that’s a good sign. The appointment and confirmation of Justice Gorsuch also bodes well (assuming he doesn’t “grow in office” like Justice Roberts). Trump Grade: B-

Overall, I think economic policy has moved slightly in the right direction, and I’ll be curious to see whether my back-of-the-envelope grading is confirmed by Economic Freedom of the World.

Here’s some of what I wrote for the latest issues of Cayman Financial Review.

…his first year in office has been a net plus for the U.S. economy. The regulatory state has been curtailed and a semi-significant tax reform has been enacted. …Equally important, Trump has not destabilized global trade. His protectionist rhetoric has not (yet) translated into major anti-trade initiatives. Nor has he implemented any populist policies on immigration or the budget. In other words, we have dodged a bullet. …That is the good news. The bad news (or, to be fair, unsettling news) is that Trump still has at least three more years in office. …The fact that Trump’s first year has been characterized by a “normal” set of Republican policies is besides the point. Almost everyone assumes he is capable of doing something out of the ordinary.

I’ll close by making a second broad observation. The fact that economic liberty increased during Trump’s first year in office does not mean that his presidency will be a net plus. It’s possible that his personal unpopularity will trigger a backlash that makes it easier over time to impose statist policies (just as I suggested that a Hillary victory might have produced desirable long-run consequences).

Check with me in 2021 for a final assessment on whether picking a president from the Boston phone book (metaphorically speaking) was a good idea.

P.S. For what it’s worth, here’s a speech I gave back in Trump’s first month in office. I think my predictions were on target (mostly because I paid attention to what Trump was saying, not because of any special insight).

P.P.S. Whether you’re a left-leaning opponent of Trump or a right-leaning opponent of Trump, remember there’s always the silver lining of mockery.

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We joked about communism yesterday, so let’s stick with the humor theme and make Trump today’s target.

Months before the 2016 election, I shared a world-according-to-Trump map that had some very clever parts (I especially liked the portrayal of Eastern Europe and Canada, though I confess I’m not sure why China was labeled as the New England Patriots).

Now let’s look at three new Trump maps.

Lots of terrorists in this first version, as you can see. And maybe Trump will have China build the wall rather than Mexico.

And, compared to the 2016 map, Obama loses North Africa.

I’m not sure why all of Europe is considered Germany in this second map, but you won’t be surprised to see Russia portrayed positively.

The most amusing part is the “PROBABLY OK” for the Antipodes, which actually matches what I told a New Zealand TV audience last November.

Now let’s look at our final map, which is the best of today’s collection. It was sent to me by a Che-loving former significant other and it’s obviously a new map since it references “s***hole countries” and Norway also gets listed.

We also see an appearance by “Rocket Man” in North Korea and the “Election Non-Meddlers” from Russia. But I’m baffled that China is considered “Climate-Change Hoaxers.”

P.S. If you like humorous maps, you can click here to see how the Greeks, Brits, and Americans view Europe.

P.P.S. If you like Trump humor, previous examples can be found here, here, here, here, here, here, and here.

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I was not optimistic about a Trump presidency. Before the 2016 election, I characterized him as a “statist” and a “typical big-government Republican.”

I’ve also criticized his policies on entitlements, trade, child care, capital gains taxation, government spending, and infrastructure.

But one good thing about being libertarian is that I feel no pressure to spin. I will criticize politicians who I normally like and praise politicians I normally dislike.

So I’ve also applauded some of Trump’s policies, whether they are big reforms like a cut in the corporate income tax or small changes like killing Obama’s Operation Chokepoint.

Today, I’m going to give Trump some credit for what’s happening with regulation and red tape.

Wayne Crews of the Competitive Enterprise Institute measures the change.

The calendar year concluded with 61,950 pages in the Federal Register… This is the lowest count since 1993’s 61,166 pages. …A year ago, Obama set the all-time Federal Register page record with 95,894 pages. Trump’s Federal Register is a 35 percent drop from Obama’s record… After the National Archives processes all the blank pages and skips in the 2017 Federal Register, Trump’s final count will ultimately be even lower.

Here’s a visual that captures what has happened.

Wayne explains that the numbers of rules have dropped in addition to the number of pages.

…the Federal Register may be a poor guide for regulation… The “problem” of assessing magnitude is even worse this year, because many of Trump’s “rules” are rules written to get rid of rules. …There has also been a major reduction in the number of rules and regulations under Trump. Today the Federal Register closed out with 3,281 final rules within its pages. This is the lowest count since records began being kept in the mid-1970s.

Susan Dudley of George Washington University looked at what’s happening to regulation for Forbes.

…what has the administration achieved on the regulatory front in 2017? …President Trump issued Executive Order 13771 directing federal agencies to remove two regulations for every new one they issued, and to cap the total cost of new regulations at zero. …An Office of Management and Budget report…finds that during the first eight months of the administration (through September 30th), executive agencies issued 67 deregulatory actions and only 3 significant regulatory actions. …More meaningful is the report’s estimate that these actions will save Americans more than $570 million per year on net. …This was the year of the Congressional Review Act. Working with the Republican Congress, President Trump has disapproved 15 regulations, most issued at the end of the Obama administration.

She looks specifically at regulations that involve a lot of money.

The pace of new regulation has visibly slowed in the Trump administration. A search of OMB’s database reveals that, between January 21 and December 20, 2017, the Office of Information and Regulatory Affairs concluded review of 21 “economically significant” regulations—those with impacts (costs or benefits) expected to be $100 million or more in a year. As the chart below shows, that is dramatically fewer rules than previous presidents have issued in their first years.

Here’s an impressive chart from her column.

And here’s most impressive part. Some of these “significant” rules are actually designed to reduce red tape.

…a further breakdown of those 21 economically significant actions this year: …Three are classified as “regulatory,” including two from HHS and one from the IRS. …Four are “deregulatory,” including three HHS rules as well as the congressionally-disapproved FAR rule mentioned earlier.

So what does this shift in regulation mean?

Well, as the New York Times has just reported, less red tape is good for the economy.

A wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly. …the newfound confidence was initially inspired by the Trump administration’s regulatory pullback, not so much because deregulation is saving companies money but because the administration has instilled a faith in business executives that new regulations are not coming.

I fully agree with this point.

What seems to be helping growth is that companies are getting some “breathing room” simply because the regulatory onslaught of the Bush and Obama years has finally abated.

…in the administration and across the business community, there is a perception that years of increased environmental, financial and other regulatory oversight by the Obama administration dampened investment and job creation — and that Mr. Trump’s more hands-off approach has unleashed the “animal spirits” of companies that had hoarded cash after the recession of 2008. …with tax cuts coming and a generally improving economic outlook, both domestically and internationally, economists are revising growth forecasts upward for last year and this year. Even before it became clear that Republicans would pass a major tax cut, capital spending had risen significantly, climbing at an annualized rate of 6.2 percent during the first three quarters of last year. Surveys of planned spending also show increases. …business executives are largely convinced that the cost of complying with rules diverts money that could be invested elsewhere. And economists see a plausible connection between Mr. Trump’s determination to prune the federal rule book and the willingness of businesses to crank open their vaults. Measures of business confidence have climbed to record heights during Mr. Trump’s first year. …The Business Roundtable, a corporate lobbying group in Washington, reported last month that “regulatory costs” were no longer the top concern of American executives, for the first time in six years. …The National Association of Manufacturers’ fourth-quarter member survey found that fewer than half of manufacturers cited an “unfavorable business climate” — including regulations and taxes — as a challenge to their business, down from nearly three-quarters a year ago.

The bottom line is that Trump has out-performed my expectations on this issue.

But I don’t care about that. I’m more interested in a freer and more prosperous America.

So when you’re contemplating the shift in regulatory policy, here are a few factoids.

  • Americans spend 8.8 billion hours every year filling out government forms.
  • The economy-wide cost of regulation is now $1.75 trillion.
  • For every bureaucrat at a regulatory agency, 100 jobs are destroyed in the economy’s productive sector.
  • A World Bank study determined that moving from heavy regulation to light regulation “can increase a country’s average annual GDP per capita growth by 2.3 percentage points.”
  • The European Central Bank estimated that product market and employment regulation has led to costly “misallocation of labour and capital in eight macro-sectors.”

Red tape accounts for 20 percent of a nation’s grade according to Economic Freedom of the World. If the current deregulatory momentum is sustained, the United States will rise in the rankings and Americans will be richer.

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