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Trump’s rhetoric on trade highlights the irrelevance of trade deficits and balance of payments accounting when businesses operate independent of national economies. We have relatively open economic borders, inherently unregulated contracts, and millions of business transactions every day that no central authority can track. Yet the president nurses constant resentment that other countries take advantage of the United States.

When every business transaction needs a winner and a loser, you construct economic fantasies where you sound illiterate at best, or worse, your ideas partake of lunacy. Read the president’s tweets to see for yourself. Do not read too many, though, lest you find yourself in the same confused mental state.

Yet the president nurses constant resentment that other countries take advantage of the United States.

Four short dialogues illustrate how this kind of thinking works: (1) I pay $150 for a hotel room this weekend. (2) Someone pays me $5,240 for my services last month. (3) Two neighbors exchange machines for home maintenance. (4) We discuss fairness and fantasy in the international economy.

Weekend away

“I went for a trip this weekend. $150 covered my hotel room.”

“$150!? That’s too much.”

“That was for two nights. I actually got a good deal.”

“But you paid him!”

“So what?”

“When you pay out, that means you lost money.”

“But I got a nice warm room in return.”

“That lasts for one weekend. He gets to keep your money forever.”

Services delivered

“My client just sent me a $5,240 check for my last invoice.

“Not bad. What do you charge?”

“Sixty-five dollars an hour.”

“Alright, you stuck it to him.”

“No I didn’t. That’s the going rate for the work I do.”

“Yeah, but now you have his money.”

“I worked a whole month for it! It’s just compensation for my time and services.”

“Don’t you see? He’s constantly paying out. You have a great racket going.”

“But he sells my work product for a great deal more than he pays me. Isn’t that a racket?”

“In any deal, follow the money downstream. The port city is always bigger than the village at the headwaters. The fat cat sits on the money pile.”

Home maintenance

“I have good relations with my neighbor. He borrows my snow blower in the winter. I borrow his lawn mower in the summer. We have a pretty short winter, and the grass only grows from May until the Fourth of July, so it’s a good deal for both of us.”

“How do you know he’s not taking advantage of you?”

“Advantage?”

“He could be screwing you over. To start with, a snow blower costs twice as much as a lawn mower. So when both machines wear out, you’re out an extra three hundred bucks!”

“But we don’t know when they’ll wear out.”

“That’s the point! If you don’t monetize the exchange, you’ll never know who has the better deal.”

“What difference does it make? We both have our driveways cleared in the winter, and we have nice looking lawns in the summertime.”

“You will never climb to the top of the heap with a mindset like that. He could be leeching on you. Just wait till you have to pay out for a new snow blower.”

“Climb to the top of the heap? What are you talking about?”

“You can’t ever be number one if you let people take advantage of you.”

“But we’re neighbors! We just want to help each other out.”

“No, don’t you understand? One of you is a winner, and the other is a loser. You don’t know which one is which until you make that trip to Home Depot to replace the equipment. Plus I’ll bet you don’t even know how much gas the two machines use.”

“Good God. Next thing, you’ll tell me we should charge each other to rent the snow blower and lawn mower to each other.”

“That’s exactly what I’m saying. Then you know who’s coming out ahead. You never want to come out behind.”

“So you’re saying we should have two separate rental contracts.”

“With provisions for liability, breach, and failure to pay. What if your machine breaks while he’s using it?”

Fairness and fantasy

President: “If you’re a winner, you do not let people take advantage of you.”

“How do you know when someone takes advantage of you?”

“When someone takes your money, when you ship jobs overseas, or when you do something for the sake of good will. All of that makes you a loser.”

“I don’t understand. If I form a business relationship – call it a contract – with someone, and I pay the person for a product or service, the other person takes advantage of me?”

“That’s correct, but only if the other person doesn’t come through.”

“Come through?”

“Then you don’t get what you paid for. That’s why you don’t trust nobody.”

“You want to run the economy like a Robert de Niro character? Besides, governments don’t run economies. Business corporations arrange these transactions.”

“Yes, but the corporations have to follow my rules.”

“They do? Alright, they do. So what?”

“So I tell them what they have to do, to make our country great.”

“But they’re in business to make a profit for their owners, not make one country or another great!”

“How about you’re full of shit?”

“Don’t try profanity, Mr. Schoolyard Bully. Let’s go back to the contractor who charges by the hour. If I underpay him, so he does not clear anything on the contract, wouldn’t I take advantage of him in that case?”

“No.”

“Why not?”

“Because it depends on who gets the money.”

“Why doesn’t it depend on whether the price he charges and I pay is fair?”

“You can’t measure fairness. You can only measure how much money changes hands, and which direction it goes.”

“So if you pay a lot of money for something, the other guy has the advantage.”

“Yes.”

“What if the other guy says, ‘I’ve decided to sell my services to your neighbor. He’s willing to give me a better price.’ Does that mean he’s now taking advantage of your neighbor?”

“Yes.”

“Even though your neighbor now has benefit of his services, and you don’t.”

“Good riddance. He didn’t do a good job anyway.”

“You wrote a book called The Art of the Deal.”

“Sure. Good book, isn’t it? It topped the best seller lists.”

“I’m sure it did. Didn’t you say in that book that you have to squeeze the other guy until his armpits perspire and his scrotum shrinks up?”

“No, I didn’t say that. I don’t like to be that obvious. I did say you have to make people excited about what you’re selling.”

“That’s right. Here’s what it says about your salesmanship:

The final key to the way I promote is bravado. I play to people’s fantasies. People may not always think big themselves, but they can still get very excited by those who do. That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It’s an innocent form of exaggeration, and a very effective form of promotion.

I guess you apply those principles to politics, as in business. Wouldn’t you say someone who thinks that way takes advantage of people?”

“Like I said, if enthusiastic people with fantasies support me, why should I stop them? We all want to be a prince or princess for a day. If I don’t give people an opportunity to think big, then look who screwed himself.”

“I don’t think people want a fairy godfather to lead them. Or a flim-flam man.”

“Are we done?”

“One more question: By your reasoning, we don’t want businesses in the United States to sign contracts with businesses located in other countries, unless we account for these exchanges, to make sure we don’t pay out more than we take in. Especially, we don’t want U. S. businesses to pay overseas workers. Is that right?”

“That’s right.”

“That’s fair trade?”

“It’s fair trade when the other guy doesn’t take advantage of us. You want to make the other guy a loser. Then you can do business with him.”

Related tweets

Donald J. Trump (@realdonaldtrump)

Read the Donald’s latest Twitter tirade about U. S. relations with countries south of the border: