‘This American carnage stops right here, right now’ – Trump’s inauguration speech in brief
Buy American, Hire American, and Make America Great Again. Here's the economics behind Trump's first speech as President of the United States
"January 20th, 2017, will be remembered as the day the people became the rulers of this nation again." So said Donald Trump in his first speech as President of the United States today.
Trump's speech pretty much reflected what he said in his campaign: America's economy is geared towards the rich, and towards foreign countries; Trump's America would be all about American jobs for American people. He's basing his promises on economic ideas like protectionism, and the rejection of things like globalization. We'll be watching the next four years to see how he plans on making this happen, and what kind of economics he uses to do it. For now, here's the crux of this very first speech.
Trump opened with a bit of context: The Washington elite has, he says, been reaping all the wealth of America for itself for too long.
Trump really laid into the Washington elite, hammering home the accusation that a small group of people – politicians, first and foremost – flourished in Washington without sharing their wealth with 'struggling families' across the nation.
His evidence? Poverty rates, factory closures, and a failing education system.
Trump spoke of ‘mothers and children trapped in poverty in our inner cities’, of ‘rusted out factories scattered like tombstones across the nation’, and of ‘an education system flush with cash but which leaves our young and beautiful students deprived of all knowledge... This American carnage stops right here, right now.”
...all knowledge? American carnage?! Seems a little overboard. But the point Trump seems to want to make here is that all the areas of the economy that governments should be taking care of – basic economic wellbeing, industry, education – they’re not. (It’s worth noting that he hasn’t specified which governments exactly are to blame for this – none of the previous presidents were looking too happy…)
So where is all that money going, other than in Washington’s pockets? Says Trump: Abroad.
Trump’s attack was two pronged here. First culprit: Governments which spent money on industries abroad instead of American ones, “subsidized the armies of their countries while allowing for the depletion of our military, [and] spent trillions overseas while America's infrastructure has fallen into disrepair and decay.”
And the second? Private businesses: "Factories have shuttered and left our shores, with not even a thought and the millions and millions of American workers left behind. The wealth of our middle classes has been ripped from our homes and redistributed all across the world.”
What Trump is really opposing here (aside from the US’s enormous defence budget) is what’s called ‘
– the movement of companies’ production processes to different parts of the world, usually to keep prices down and to increase markets for sales.
Trump saw it as his responsibility to ‘protect’ America from the ‘ravages’ of other countries...
“We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.”
...and put the American people first, by buying American, and hiring American.
This was at the core of Trump’s campaign, and it was at the core of this speech too: “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers, and American families...We will follow two simple rules: Buy American, and hire American.”
In economics, the idea Trump is proposing here is called ‘protectionism’ – building up your economy within national borders, where pricing is less competitive than on a global scale, to give yourself the space to develop industries without being undercut by other countries.
He also made some perhaps slightly overblown promises to rid the world of all its troubles and solve all of the universe's mysteries…
We’re not sure this is in his job spec, but nonetheless, Trump was determined: his administration, he said, stands ready to “unlock the mysteries of space, to free the earth from miseries of disease, and to harness the industries, energies, and technologies of tomorrow.”
That’s a pretty overwhelming to do list.
...and ended by repeating his most famous of promises:
You guessed it: “We will make America strong...wealthy...proud...safe..and yes, together, we will make America great again."