Trump's debate quip about China 'using US as a piggybank' wrong, out of date

Four quotes from the first Clinton-Trump debate, explained.

Democrat Hillary Clinton and Republican Donald Trump faced off for their first debate at Hofstra University yesterday. We asked a group of scholars to listen to the often heated exchange and react to just one quote related to their area of expertise. Here are those picks.

Emily Blanchard, Tuck School of Business at Dartmouth College

“They’re devaluing their currency… they’re using our country as a piggy bank to rebuild China, and many other countries are doing the same thing.”  – Trump

It is not surprising that trade, trade agreements and especially trade with China came under heavy fire in tonight’s debate. Trade – together with technology – has undeniably reshaped the American labor market over the past decade, partly at the expense of middle-class workers.

But with this line about Chinese currency policy, Trump struck wide of the mark. First, the devaluation accusation leveled against China is out of date. While most economists agree that earlier this century the Chinese central bank artificially depressed the value of its currency (which made Chinese exports more competitive in world markets), the opposite has been true for more than a year, as China has faced mounting pressure to prop up its currency in the face of outward capital flight.

Second, the idea that China is using its trade surplus with the U.S. “as a piggybank” to rebuild its economy demonstrates a fundamental misunderstanding of balance of payments accounting. When a country runs a trade surplus, it is by definition acting as a net lender to the rest of the world. Likewise, when a country runs a trade deficit, it is a net recipient of saving by the rest of the world. By using its trade surpluses to buy US assets (mostly T-bills), China has helped to keep U.S. borrowing costs phenomenally low for more than a decade. If anything, it is China that has been serving as the piggybank to rebuild the US.

Blanchard’s work centers on the economics and policy implications of globalization.

Valerie Hudson, Texas A&M University

“So let’s have paid family leave, earned sick days.” – Clinton

“As far as childcare is concerned and so many other things, I think Hillary and I agree on that.” – Trump

While it was gratifying to see the first female presidential candidate from a major U.S. political party on stage tonight, what was perhaps even more gratifying was that for the first time, both candidates – one of whom will be our next president – agreed that paid family leave should be the law of the land. We are now one of only two nations in the world that does not provide paid maternity leave (Papua New Guinea is the other), despite the fact that research has shown that such leave decreases levels of postpartum depression and increases levels of breastfeeding. Even with the Family and Medical Leave Act’s provisions, the leave is unpaid, and it is also unavailable to 40 percent of American workers. No matter who is elected, we will apparently finally have paid leave, and our children will not have to face the heart-wrenching choices their parents faced.

But there’s more that must be done, as positive a first step as this would be. The larger issue of the invisibility of (largely) women’s unpaid caregiving labor goes beyond paid family leave, and includes issues of workplace fairness for home health care workers, of the massive shortfall in quality daycare in our nation, and of the persistently high poverty rates of caregivers in their old age. Those who represent the social safety net for the vulnerable in our society should not be forced to operate without a net themselves. And when important economic decisions are made for our country, primary caregivers should have a seat at the table to represent this critical element of our economy that would otherwise remain invisible.

Hudson is the coauthor of The Hillary Doctrine: Sex and American Foreign Policy.

Chad Williams, Brandeis University

“I say nothing.” – Trump

Republican presidential candidate Donald Trump delivered this blunt answer to debate moderator Lester Holt when asked about racial healing and what he might say to Americans who found his continued claims that President Barack Obama was not born in the United States racist.

Trump, instead of offering any semblance of remorse for his actions, took this opportunity to congratulate himself for compelling President Obama to produce his birth certificate and boasted that he was proud of his accomplishment.

Trump has recently gone to great lengths to paint himself as African-Americans’ best friend. He has done so in part by depicting a hellish picture of black inner-city communities, exploited by Democratic politicians and ravaged by violence, disease and poverty, which only he can remedy by enforcing “law and order.” The false sincerity of Trump’s outreach was fully exposed by his callous disregard of the damage wrought by his birtherism campaign.

Trump launched his presidential aspirations by declaring the first African-American president of the United States illegitimate. This was not just a personal attack on Barack Obama, but also an attack on the millions of black people who supported him and understood what it meant to have their American citizenship questioned.

Trump promises to be president for all Americans. He brags that African-Americans are flocking to his campaign. Yet recent polls still place his support among black voters at between 3 and 6 percent. This is not an accident. When it comes to being a president that will care about the true concerns of African-Americans and address the nation’s deep-seated problems of racial injustice, Trump says nothing and offers nothing.

Williams is coeditor of Charleston Syllabus: Readings on Race, Racism and Racial Violence.

Richard Painter, University of Minnesota

“I have no reason to believe that he’s ever going to release his tax returns, because there’s something he’s hiding. …I think the question is, were he ever to get near the White House, what would be those conflicts? Who does he owe money to? Well, he owes you the answers to that, and he should provide them.” – Clinton

Clinton and Trump went back and forth on his refusal to disclose his tax returns. The exchange seemed to reveal that, on the whole, he has paid relatively little tax, but that cannot be verified without the returns.

Trump said that the returns were not being released because they were under audit, but Clinton did not follow up with him as to what that has to do with public disclosure and how disclosure could in any way interfere with the audit.

More important, there was not a detailed discussion of what we could learn from the tax returns that we cannot learn from his Form 278 Financial Disclosure that he did file as a candidate. He said that there is relatively little we could learn from the tax returns, but tax returns have very different information than Form 278, so his claim that the two overlap is not true. First, the tax returns disclose what tax provisions he benefits from, which is an important issue. Are they loopholes or intended tax benefits that Congress has put in the code?

He should not be embarrassed about paying less tax if that is the way the tax code is structured, but he should be up front about that and how as president he would either change the tax code so people like him pay more or whether he would keep it the same.

Second, he talks a lot about businesses making money by sending jobs overseas. Tax returns would tell us a lot about how much income he earns overseas (generally income is taxed where it is made). The Form 278, by contrast, does not require significant disclosure of the geographic location of income and assets. Many of the LLCs [limited liability companies] and corporations on his Form 278 may be organized in the US but have assets and income overseas. His tax returns would provide some information about this.

There is nothing inherently wrong with Trump or anyone else investing overseas and deriving income overseas or even creating jobs there, but he should be open about how his own business practices relate to the issues he is talking about. We need the tax returns in order to do that.

Painter served as chief White House ethics lawyer during the George W. Bush administration.

Chad Williams, Associate Professor of African and Afro-American Studies, Brandeis University; Emily J. Blanchard, Associate Professor, Dartmouth College; Richard Painter, S. Walter Richey Professor of Corporate Law, University of Minnesota, and Valerie Hudson, Professor of International Affairs, Texas A&M University

This article was originally published on The Conversation.