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Donald Trump the businessman saw the world as an opportunity. Donald Trump the president sees it as a threat. For the man himself, these are contradictions. For the country he now leads, they are a choice: Which Trump model do we want to follow?
Business Trump licensed his name to high-rises in India, a hotel in Panama, and luxury developments in Indonesia and the Philippines. He owns two golf courses in Scotland. He pursued deals in the Middle East, South America, Europe, and Asia. In all of those cases, Trump followed a guiding principle for US corporations in the era of globalization: Go where the new customers are, then make money off them.
That strategy worked for Trump because the past half-century of economic liberalization around the world has created so much wealth in the world, and so many new customers, especially in developing countries. Trade with those countries has helped to create a market for Trump’s properties, not to mention provide sources of labor for his signature tie collection. In business, Trump embraced those trends.
In his first act as president, he repudiated them. He went beyond his campaign promises to renegotiate the rules of trade in favor of America — a view that some economists, at least, find to be a plausible depiction of the state of global trade regimes — and offered an economic vision that gazed decidedly inward.
“For many decades,” Trump said in his inaugural speech, “we have enriched foreign industry at the expense of American industry.”
He went on:
We've made other countries rich while the wealth, strength, and confidence of our country has dissipated over the horizon. One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind. The wealth of our middle class has been ripped from their homes and then redistributed all across the world.
But that is the past, and now we are looking only to the future. We assembled here today are issuing a new decree to be heard in every city, in every foreign capital, and in every hall of power. From this day forward, a new vision will govern our land. From this day forward, it's going to be only America first. America first.
Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.
There is a way to reconcile Business Trump and President Trump, but it only works for him, not the country. Economics journalist Adam Davidson, writing in the New York Times Magazine, flagged it nearly a year ago.
Trump’s worldview, Davidson wrote, is:
based on a rent-seeking vision of the economy, in which there’s a fixed amount of wealth that can only be redistributed, never grow. It is a worldview that makes perfect sense for the son of a New York real estate tycoon who grew up to be one, too. Everything he has gotten — as he proudly brags — came from cutting deals. Accepting the notion of a zero-sum world, he set out to grab more than his share. And his policies would push the American economy to conform with that worldview.
The problem, as Davidson (and nearly every intro-to-economics textbook) notes, is that economic integration isn’t a zero-sum game. There are winners and losers, for sure; millions of US factory workers who saw their jobs flow abroad in the past few decades can attest to that.
But the last half-century is filled with examples of stronger economic ties boosting the American economy and workers abroad, at the same time. Many consumer products, including clothes and electronics, have grown much more affordable for typical US families. It’s just that much of the country’s income gains from globalization have benefited a relatively small number of people — including highly educated engineers and, yes, the sort of Wall Street financiers Trump has stocked much of his cabinet with — while the costs of lost jobs have fallen disproportionately on blue-collar workers without college degrees.
Businessman Trump made sure he was on the winning side of that equation. Notably, no one told him he couldn’t be. You can bet Business Trump would have pushed back against a president who forced his suits to be made in New York, or protesters who demanded he open more golf clubs on the Oregon coast and not the Scottish one.
That strategy can’t work for every business in America under a Trump presidency, because business models are different. A lot of manufacturers — not to mention farmers — sell heavily to foreign markets. A lot of resorts cater to foreign tourists. Almost everyone wears sneakers made overseas, and by the way, they’re much cheaper than sneakers were a generation ago.
President Trump wants Americans to believe they can have all the benefits of those trends, with none of the costs. “Protection,” he said in his speech, “will lead to great prosperity and strength.” It’s a rousing line. But try it again, with “isolation” in place of “protection.” Ask yourself how strong that sounds.
