Donald, I May Be A “Stupid” Person and a Fool, But You Are About to Screw Up the World Economy Bigly

Donald, I May Be A “Stupid” Person and a Fool, But You Are About to Screw Up the World Economy Bigly

Having a good relationship with Russia is a good thing, not a bad thing.  Only “stupid” people, or fools, would think that it is bad! – Donald J. Trump on Twitter, January 7, 2017

The GDP of the US economy is $17 trillion.  The European Union’s GDP is about the same size (absent the UK, it will be about $15 trillion) and it is our largest trading partner (we do about $700 billion in trade with it annually).  China’s economy is $11 trillion and we do almost 600 billion in trade with it.  Mexico GDP is only $1.1, but it is our fourth largest trading partner after the European Union, China and Canada. 

All of the growth in the world economy for the last 40 years has come from international trade and the removal of barriers to trade.   Our economy and the world economy revolve around a strong Europe (yet, Trump has vowed to relinquish our Nato obligations).   A stable US relationship with China, the world’s fastest growing economy, is necessary as they own $1.3 trillion of US debt and will need to buy more to fund the US’s infrastructure rebuilding plans (yet, Trump’s done everything imaginable to rattle their cage).   Then, there is Mexico.  Trump has not only vowed to build a wall, but to close the border with Mexico and destroy its economy (I see only a nightmare here for Mexico, and sovereign liability down the road for the US for breech of our treaty obligations, plus the cost of rebuilding Mexico down the road in order to recreate a prosperous market to our South). 

Mr. Trump, if you continue to back away from our NATO commitments, to antagonize China and/ or pursue your stated objectives to destroy Mexico, you will destroy the US and the global economy.  You are playing with fire.     

Russia, by contrast, is inconsequential to the US economy and virtually inconsequential to the global economy.  Its GDP is only slightly bigger than Mexico.  The only US company with any real upside to removing sanctions there is Exxon (your Secretary of State’s old company) that has interests currently impaired in the Caspian and in Sakhalin.   Russia has pricing power when oil and gas prices rise, but otherwise there is virtually nothing that can happen economically in Russia that affects the global economy (Russia’s economy is determined by oil and gas prices).   Innovation in Russia ended in 1917, or long before.

Russia is a nuclear power that threatens its neighbors.   As a result, we have correctly pursued a policy aimed at containing the global aspirations of the autocrat who runs it and keeping things somewhat stable.   Otherwise, truth be told, it doesn’t really matter whether we have good relations or bad with them.   

So, I am prepared to concede that I am “stupid” and a fool.  But, you are terribly dangerous, lacking the most fundamental understanding of the world and the US’s role in it.  Maintaining positive relations with the rest of the world – Europe, China, Mexico – is so much more vital to our economy and our security in 2017.

About the author: The author’s certainty that Russia is inconsequential is based on his experience practicing law in Moscow in the mid-1990s.

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