Trump’s Economic Beliefs vs. Economic Theory
The former U.S. President, Donald Trump, does not adhere to the principles of exogenous variables or diminishing marginal utility.
According to Trump, economics can be managed through executive orders—a viewpoint more aligned with autocratic rule than free-market dynamics.
Marginal Utility and Tacos
Consider a group of young individuals on a late night out. The first taco from their local taqueria brings them significant satisfaction, while the ninth might leave one of them in pain—evidence of diminishing marginal utility. For Trump, however, this concept could be dismissed through sheer willpower.
Comparative Advantage in Trade
David Ricardo demonstrated that specialization is key to international trade success. If country A can produce strawberries more efficiently than apples, and vice versa for country B, mutual benefits are achieved through exchange rather than isolation.
Trump disregards the reactionary nature of financial markets, claiming future reversals despite current downturns. His belief in absolute control over economic indicators overlooks the influence of information and expectations on market dynamics.
The Allure of U.S. Capital
Despite a trade deficit, the United States maintains global economic dominance due to its appeal for foreign investment, not by restricting trade.
Arbitrary Tariffs and Inexperience
Trump’s reliance on tariffs reflects a misguided attempt to mask his political inexperience. His actions—such as undermining soft power and displaying economic ignorance—underscore this point.
Conclusion
Trump’s economic strategies, rooted in personal whim rather than sound theory, have eroded U.S. global influence in just 72 days. His actions contrast sharply with the nuanced approach of past leaders.
Related Articles
- Las cajas negras del poder: ¿Quién manda aquí?
- Bukele, ahora en el papel de patiño de Donald Trump
