The Dow Industrial Average fell by 358 points on Thursday and 531 points on Friday. Yesterday, after plunging more than a thousand points, it recovered to a “mere” 588 point loss.  Economic growth has been slow, and another recession appears to be on the horizon.  Could a President Donald Trump get the economy going again? So far he has only laid out the bare bones of his economic plan. But it has the makings of an excellent program.

Balancing Trade

First and foremost, he plans to negotiate balanced trade agreements and even threatens taxes on imports as a way to move trade into balance. If he moves trade toward balance, that would provide a tremendous boost to the economy. In the short term, demand for American made products would immediately increase. In the long-term, manufacturers would build many new American factories that incorporate the latest in production technologies.

These is a simple way to balance trade, explained in a book of which we are co-authors, a single-country-variable-tariff, the so-called Scaled Tariff that is explained in the book, Balanced Trade (Lexington Books, 2014).

The tariff goes up as a significant chronic trade deficit with a trading partner increases but diminishes as the trade deficit is reduced, disappearing completely when trade is brought close to balance.

Countries with whom trade is close to balance would not be affected. Only large countries with significant chronic surpluses in their trade with us would be affected. The tariff would raise the price of imports from the country to which it is applied but would yield substantial tariff revenues that would more than compensate for the high prices.

Jobs for the Unemployed

Over the last 8 years, an increasing percentage of American workers have left the workforce or have reduced their working hours. Meanwhile, the new jobs that have been created have mostly gone to immigrants, some legal and some illegal.

Trump plans to build a wall to keep out illegal immigrants and plans to deport illegal immigrants, which would open many jobs to unemployed Americans. This would increase the opportunities for unemployed and under-employed Americans.

If he increases the participation rate of the American workforce, he would provide a huge boost to the economy. But in order to do so, he would have to take down the system of work-discouraging, means-tested benefits that Washington has been creating. Former Pennsylvania secretary of public welfare Gary D. Anderson put together a chart of these benefits. It shows that poor people are often better off when they work less.

Trump could also encourage work by eliminating the Department of Housing and Urban Development which keeps blacks in ghettoes that are often far from the available jobs.

Cutting through the Regulations

Trump has resisted attempts by reporters to get him to endorse a higher minimum wage. Such a rate hike would be extremely racist, for it would make it ever harder for black teenagers to get their first jobs, as Thomas Sowell recently explained with an example from his own experience (Minimum-Wage Laws: Ruinous Compassion):

Looking back over my own life, I realize now how lucky I was when I left home in 1948, at the age of 17, to become self-supporting. The unemployment rate for 16- and 17-year-old blacks at that time was under 10 percent. Inflation had made the minimum-wage law, passed ten years earlier, irrelevant.

But it was only a matter of time before liberal compassion led to repeated increases in the minimum wage, to keep up with inflation. The annual unemployment rate for black teenagers has never been less than 20 percent in the past 50 years and has ranged as high as over 50 percent. 

Destructive regulations also include laws requiring all government contractors to pay union wages on federal contracts, barring the export of American-produced oil, requiring ethanol in gasoline, and the actions of a host of regulatory bodies including those created by the Dodd-Frank bill, not to mention the Community Investment Act which forced banks to make the sub-prime loans that compounded the severity of the Great Recession.

Tax Reform

Trump wants to simplify the U.S. tax code. The high U.S. corporate income tax rate has encouraged U.S. corporations to move their production and headquarters abroad.

The simplest solution would be to eliminate the corporate income tax entirely by treating corporate income the way partnership income is currently treated. Income from partnerships is taxed by the personal income tax.

After all, what is a corporation but a partnership that enjoys limited liability. The elimination of the corporate income tax would be a real boost to restoring the U.S. as a manufacturing nation.

Putting America First

Above all, Trump is a patriot, in contrast to the internationalists that dominate Washington. Take Obamatrade, for example, which Republican congressional leaders supported, but Trump opposed. Not only would it enable currency manipulation, but it would also set up international commissions with the power to force changes in U.S. labor, immigration and environmental laws.

Unlike McCain and Romney, the last two Republican candidates for president, Trump has not been taken in by the man-made global warming myth. In December, Obama will negotiate a worldwide climate change agreement. He will commit the United States to a huge reduction in carbon emissions of 26% -28% from 2005 levels, but will let China, already a much larger carbon emitter, continue to expand its carbon emissions until 2030.

Whatever plan Trump adopts, it will be pro-American. If he moves toward balanced trade, work for the unemployed, reduced government regulation, simplifying the tax system, and protecting America from unfair climate change restrictions, he could indeed get the economy going. Doing so would go a long way toward making America great again.

The Richmans co-authored the 2014 book Balanced Trade: Ending the Unbearable Costs of America’s Trade Deficits, published by Lexington Books and the 2008 book Trading Away Our Future, published by Ideal Taxes Association.