The Cranberry Economy
The Cranberry Economy
When I teach Macroeconomics to my students the first concept that we discuss of course are the basics such as Factors of Production, Supply and Demand, and of course TANSTAAFL.(There ain’t no such thing as a free lunch)
One of the major topics in my classes is the rise of Economic Populism and how Donald Trump won the 2016 election by focusing on GDP, jobs, growth, bad trade deals and the harmful effects of globalism.
I’ve also had several discussions with my fellow liberal friends over the same topics. Yes, I do have liberal friends. Anyway, in my many discussions concerning economics with the myopic Trotskyites I had an epiphany one day of giving them a pre-holiday primer of how to understand the economy. I thought hey let’s talk Thanksgiving, let’s talk cranberries.
First let’s look at the formula for GDP. It is GDP= C+I+G + (X-IM) Pretty simple even for my liberal friends to remember. There are other ways to measure the economy this is just one. Some like GNP numbers but I don’t have all day so GDP it is.
C = stands for consumer spending
I = stands for investment capital
G = stands for government spending
(X-IM) = exports minus imports
Now for holiday Thanksgiving fun I will use the economics of cranberries. I first tell my liberal friends that it starts with C for consumer spending. People need good jobs with decent wages to buy cranberries in the first place. There must be a healthy demand and plenty of producers to supply that demand. In order to buy and sell goods in an economy we must protect the cranberry producer from government regulations and give them the ability to expand operations with the infusion of more capital.
Workers will flock to healthy unregulated businesses that are flourishing because they can pay better wages. When consumption is up from increased pay people receive they will in turn buy more cranberries not just at Thanksgiving but to eliminate issues like bladder infections. This is diversification of the product line by the way. Then the entrepreneurial spirit will kick-in and production increases in order to meet demand with more supply. To do so the producer must buy more capital or anything that can help him produce more of the product. This in turn gives us the I in the formula which is to invest in more capital. Purchasing machinery, technology, processing equipment, etc. This will lead to economic growth and the rise in GDP.
At this point my liberal friends are saying to me, “we believe in this too.” Well not exactly because then I talk about the G in the formula which is government spending. This is where the main separation exists between liberals and conservatives. The government has business interest and they’re buying and selling within the economy too. The problem however is that they compete with the private sector and most of the time they interfere and make matters worse. The cranberry producer like Ocean Spray now has a public-sector competitor as well as increased government regulation. The government wants to compete but they also have the advantage of regulating their competitor. Liberals regulate to gain power to make the G in the formula become so massive. Democrats want the G to be the biggest part of the formula. They will in turn micromanage the economy through regulation to where we become more like a command economy.
Finally, I explain to my liberal friends (X-IM) that our exports should be larger than our imports which essentially means that we are manufacturing more cranberries here rather than importing them from some distant land. We should also negotiate fair trade agreements with blocs such as the EU, who usually give better terms to other cranberry producers like Canada or Chile. They’re the biggest competitors for U.S producers of cranberries to Europe. The cranberry producers also have to look at a 35-39% U.S. corporate and small business tax along with competition from other nations. This is the Democrat Venezuelan model of no growth.
President Trump has been trying to bring down the high corporate and small business taxes which will allow our cranberry producers and many others like them to compete with other countries. Hopefully the Republican Senate can finish the deal. So overall this will lead to increase profits which lead to more purchasing of investment capital which will help other industries grow and expand. Hey liberals maybe that’s where the word capitalism comes from… more capital.
At this point my liberal friends are fast asleep with other fellow Americans on Thanksgiving thinking it’s tryptophan from the turkey when in fact it’s our countrymen finally getting a day off. They’re exhausted from being over-worked, overtaxed and over-regulated. It’s the liberal economy tearing down the American producer and worker. It’s one reason why Trump won in blue collar states like Wisconsin, Michigan and Pennsylvania. So, the next time you’re watching the Cowboys play another Thanksgiving game, and you’re munching down on a turkey cranberry sandwich, remember to share one with your liberal friend and explain the great GDP formula and show them what growth actually looks like. Please tell them about the Cranberry Economy and how we might achieve it. They might thank you one day as they wake-up from the tryptophan coma with a good paying job courtesy of a free-enterprise system.
Written by Patrick Flenniken
First published in the Boerne Star