Dear Mr. President-Elect Trump,
We would like to begin by congratulating you on your recent
election as the 45th President of the United States of America. You
have promised to ‘make America great again’, referring perhaps to a time period
after World War II and before the 1970s when the U.S. was an uncontested
superpower, incomes were rising and the middle class was growing. To be sure,
there were many problems during this time period including the struggle for
civil rights domestically and the conduct of a highly questionable military
action in Vietnam. Nevertheless, you have highlighted a number of approaches to
recovering this perceived ‘greatness’, almost none of which is based in fact
and if implemented would most certainly send not only the U.S. but possibly the
world in the opposite direction. We wish to offer you some advice regarding
several of your proposed policy positions.
Let us begin with your plan to build a wall along the
U.S.-Mexican border. We believe that this will not only be ineffective but send
the wrong message regarding people of colour. In a survey regarding
discrimination of Mexican immigrants, 40% said that they felt discrimination
because of their heritage and 30% said that they were physically attacked
because of it. A wall would support such actions and attitudes. We do not
believe that your country will be made great ‘again’ through the perpetuation
of hateful and racist behaviour. In general, immigrants accept jobs that
citizens will not, with citizens perhaps fearing being trapped in a cycle of
low-paid poverty. If you want Americans to take up these jobs, you might
consider instituting a guaranteed income for all citizens. This would then
encourage people unwilling to work for sub-subistence wages, to perhaps take on
these jobs.
Evidence from Finland suggests that this would be the case.
Second, let’s talk about your America-first approach to
trade and production. You believe that globalization has hurt American
industry, and taken jobs and money away from your people. Globalization is not
going to disappear. Neither is the trend toward regional trading blocs, such as
NAFTA and the proposed TPP, that have arisen in response to globalization.
Mexico is your 3rd largest trading partner. In 2015, U.S. imports
from Mexico were $295 billion and exports were $236 billion. A lot of this
trade is intra-company movement of goods and services, so really benefiting
U.S. industry. U.S. foreign direct investment in Mexico amounted to $107.8
billion in 2014 alone, constituting a 5.3% increase over 2013. Canada is
America’s 2nd largest trading partner, with two-way trade totalling
roughly $575 billion in 2015. These flows are a direct result of NAFTA. The
off-loading of many low-skilled manufacturing jobs by U.S.-based multinationals
to places like Mexico and China is not to be blamed on your trading partners.
It is a function of companies responding to changes in the world economy. As
these jobs have been lost, U.S. manufacturing value-added has actually
increased quite dramatically over the last 30 years, from $700 billion in 1990
to $1,966 billion in 2012. This is due to a combination of mechanization and
the recovery and retention of high-skilled manufacturing jobs across the
country. A huge proportion of America’s wealth is dependent upon international
trade and investment flows. Sure, the U.S. percentage of global trade has
dropped over time, just as East Asia’s has risen. But the rise of Japan, China
and so on is due in part to the behaviour of both U.S. corporations investing
and producing in Asia (Mexico and elsewhere) and U.S. citizens consuming these
products. At the same time, China has invested a great deal of its new wealth
in the U.S., so helping America maintain its powerful economic position in the
world. We are sorry to have to point out this obvious fact to you, Mr.
President-Elect, but we are the world. The answer to perceived unfair practices
due to regional and global agreements is to revisit and revise, not to scrap
and try to go it alone. Remember how the world lurched into two World Wars?
This was partly due to trade wars and hyper-nationalist policies. Do you really
want to go in that direction?
Third, let us focus on your desire to get government off of
the backs of the people. You have pledged to cut corporate taxes drastically and throw out two regulations for
every one regulation that you introduce. Aside from being a rather odd thing to
say, let us focus on what ‘deregulation’ entails in your view. You have
suggested that you will scrap the Affordable Care Act, commonly known as
Obamacare, and privatize the health industry because you think more competition
will reduce overall costs and prices. You think Obamacare unevenly helps poor
citizens and increases the overall cost of health care. You want to replace it
with ‘Trumpcare’, but this is estimated to cost $550 billion, while 20 million
people would lose health-care coverage, including a large percentage of those who
voted for you. How will you pay for this if you further shrink the tax base, particularly among that group of people most able to pay more tax in order to build a better society? An active state is essential for equitable development, and
pulling out of essential services like health care will simply shift the burden
onto those least able to help themselves and most in need. Is this the sort of
America that you feel is ‘great’, Mr. Trump? You have also suggested
deregulating the banking industry. Have you forgotten the housing crisis and
the great financial crash of 2008? Canada, despite its proximity and reliance
on the U.S., managed to keep its head above water because of tight regulations.
We know that you have made much of your wealth by building casinos, Mr. Trump.
But in our view, a primary problem with the world today is that current
economic approaches toward the free flow of finance capital treat the world as
a casino. We need to reign in the bankers, and to bring the financial world
back into line with the world of actual economic production. There are tools
out there, such as the long-proposed Tobin tax on capital flows. The answer to
our current economic malaise, Mr. Trump, is not to turn your back on the world,
but to embrace it with all its faults and to make it better through better
laws, policies and practices. As you take up the position as ‘leader of the
free world’, we hope that you will consider what we have said here and join us
as part of the solution, not pull apart from us and become a large part of the
problem. What we need is a thoughtful and considerate partner, not a new bully
on the block.
Sincerely,
Larry Swatuk and the Class of INDEV 200
School of Environment, Enterprise and Development,
Faculty of Environment, University of Waterloo
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