You could say Donald Trump has a lot going for him: his eponymous
buildings grace the New York skyline and the Las Vegas Strip. The potential 2012 presidential candidate will
even soon follow in the footsteps of Flavor-Flav and David Hasselhoff in
getting roasted by Comedy Central. But the billionaire just received a piece of bad news: he's no longer in the good graces
of Forbes Opinions editor John Tamny.
"You're Fired," Tamny has informed
Trump, borrowing the Donald's signature line from his hit reality TV
show, The Apprentice. The grounds for dismissal? Trump's stance on
China: "Your musings reveal a shocking lack of knowledge
about how rich and poor economies work, the purpose of currencies, and
the role of comparative advantage in lifting all economic boats," Tamny declares.
The first "fireable offense" Tamny raises is Trump's assertion that China is artificially weakening its currency:
Since 1994 China has pegged its yuan to the dollar. Basically China has done what countless other countries do, and that's been to measure its currency in dollar terms.
In short, China's yuan is weak because the dollar is weak. If the dollar were strong, so would be the yuan. All currencies are concepts in the unfortunate world we live in of fiat money, and the Chinese currency is way too cheap precisely because the two presidential administrations since 2000 have successfully and wrongly overseen the dollar’s devaluation.
a series of building analogies in an effort to speak the real-estate mogul's
language, Tamny goes on to refute Trump's claim that a weakened yuan
renders Chinese goods more attractive on the world market. Which brings
him to Trump's second offense: the suggestion that the U.S. impose a
25% tariff on Chinese goods.
Thanks ... to Chinese imports that raise our standard of living, Americans are able to save and invest more of their earnings on the way to eventually having the means to buy from you. To put up barriers to Chinese goods is not only to rob Americans of their liberty, but it’s to also take from them a greater ability to amass wealth ...
Basically, we could make in America what you want, but to do so we’d have to consign much of the country to Chinese levels of poverty to get there. In short, your "Buy American" program would put you out of business more quickly than you could exclaim, "You're Fired!" Trump properties won't sell in a poor America.
This article is from the archive of our partner The Wire.