Donald Trump, Courtesy Of The Federal Reserve

A Benjamin Cole post

America’s chattering elites cannot say enough bad things about GOP presidential candidate Donald Trump, the billionaire celebrity real-estate developer. He is decried as xenophobic, economically clueless, a buffoon.

Among his cardinal sins, Trump bashes Chinese imports and 13 million illegal immigrants, most of whom are in the U.S. seeking work, but who lack protection of law.

Meanwhile, the Federal Reserve has suffocated the U.S. economy for at least eight years, while all along some Fed officials rhapsodized about zero inflation. Tens of millions Americans lost jobs or left the labor force.

So what see the American middle- and working-classes? They see Wal-Mart full of Chinese goods, foreign cars clogging the roads, weak job markets, feeble economic growth, and (at least) 13 million Third Worlders who want American jobs. The Rust Belt is so old it is passé to mention it.

Then average Americans hear from established party leadership how wonderful immigration is, and that even illegal immigration must get a free pass as it is impossible to do anything about it, and that free trade makes your life better. Why, a wall across the border would cost $6 billion, too much money. (BTW, federal outlays in last fiscal year were $3.59 trillion).  The GOP party hails tight money.

Then Mr. and Mrs. America see Donald Trump.  Egads, the question is not, “What is propelling Donald Trump?” but rather, “Why hasn’t Trump effectively won this election already?”

If a central bank chooses asphyxiation as the norm, are voters wrong to seek the protection of socialism from unfettered free markets? Or a candidate who talks about what they see?


Trump should be winning easily, but he has kneecapped himself at every turn. Instead of legitimately questioning the role of illegal immigrants in U.S. job markets, Trump denigrates the motives of Mexicans border-hoppers, most of whom only want jobs. Trump pointlessly belittles women, a huge voting block, to say the least. He alienated natural ally of Fox News. He wantonly castigated Sen. John McCain’s war record. Trump’s latest miscue, of course, was to advise Moslem immigrants be kept out of the United States. And lastly, Trump has dropped only faint come-ons to the big GOP-bloc of evangelical voters, a mysterious blind spot.

And yet Trump still dominates the GOP field.


Because Trump gets it: Tight money, large-scale immigration and free trade have not resulted in higher living standards for a big swath of Americans, certainly not if the Fed is going to perma-suffocation as their default mode. You have to be blind not to know illegal immigrants work for the wealthy, as maids, nannies, gardeners, in restaurants, and for agri-business. The middle class can’t afford such luxuries, and rarely owns farmland. Immigrants have crowded the U.S. unskilled and semi-skilled job markets—a world invisible to the chattering classes.


The Fed has helped bring about Trump, but unfortunately Trump seems to understand little about monetary policy, even though he is a real estate-developer. He might understand city zoning and its effects on housing costs, but again he has not said as much. It is sad to see such an irreverent and potentially positive national character gut his own campaign through ugly, hurtful, pointless and divisive barbs at one voting group after another.

It is even sadder to consider that the other contenders for America’s highest office offer less.

PS Yes, Kevin Erdmann’s pioneering work on housing costs is very important. Yes, Trump is a bit of a “Trumpenstein”—the right-wing has scare-mongered for generations about overseas threats and terrorism. So, Trump says he will answer the terrorists with steel. But at the core of Trump’s appeal is that he appears to offer a solution to weak job markets (suffocated by the Fed).

3 thoughts on “Donald Trump, Courtesy Of The Federal Reserve

  1. For no other reason, I respect Trump for putting himself out there, even if all of the things he wants to do are the wrong things. I really have no clue of what it is like to run for President, but it seems like it takes far more than I have in any sense. Somebody has to do something about the miserable state of affairs, and with all of the excuses of being being well meaning I’ve heard, the criticism of Trump is somewhat shocking to me. He is a dunce, completely. There is no doubt about it. I don’t plan on supporting him in any way or voting for him – ever. But nobody has been able to convincingly prove malice on his part, which appears to be a prerequisite for understandable utter disdain in the MM blogosphere. Trump hasn’t hurt anyone, and I fail see the difference between him and somebody like Jeffrey Lacker with the exception that Trump put himself out there to try to solve real problems, not made up ones.

  2. Dajeeps–thanks for reading. Unfortunately, Trump has made a lot of ill-considered ecommentary. He has not said much about monetary policy. But for some reason I would prefer Trump to Cruz.

  3. Nice post! I salute you for presenting a cogent and measured critique of Trump, most of the econ blogosphere just points and sputters.

    It’s obvious the vast majority of Americans are harmed by illegal immigration, seems unfair to me to ask people to bear that cost, so for this reason I support Trump despite everything else. Trump has both shamed the Fed for “keeping rates low” while also saying he wants a weaker dollar. So try and figure that one out. Cruz seems to be the only one who understands monetary policy.

    A lot of econ types get bent out of shape by Trump’s frequent economic sophisms on trade. However, I don’t think mild protectionism really matters a whole lot either way, and wouldn’t completely dismiss the idea that the Federal Government could increase domestic employment, and ‘improve’ the shape of the income distribution through mild protectionism in a big market like America, even if it knocks little off RGDP growth.

    I still can’t believe what he ‘gets away with’. Saying he’s going to “take care of women” sets off my New England public school conditioning even while I laugh. Would never has guessed he’d get away with the Islam thing. Anyway, I’m hoping for Trump-Cruz 2016 or Cruz-Trump 2016.

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