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Part of me can't quite believe what this government is trying to put over on the mass of the American people. People are fed up with what they see as legalized political corruption. This White House is on its way to being the most corrupt in the history of the country. The nerve they have to try if they're having some success. I'm amazed at that. And I'm confident. I really am that in a very short time and I'm counting in terms of weeks and months this is going to come back what they are doing to bite them in the rear end in a way that will be even more amazing to folks like us than what they've already done.
China developed an economic system trying desperately to do what every other poor country in the world has been trying to do at least for the last century if not much longer and that is to stop being poor. 50 years ago, China would been at the top of the list of the poorest places on this planet and they wanted to get out of it. And one of the things they did is look long and hard at the United States as an example because the United States began as a pretty poor country, an unimportant corner of the British Empire. And look what it became over the 200 years of its independent history. And that impressed the Chinese as it has impressed people around the world. And for good reason. The standard of living in this country was raised remarkably in those 200 years that are just over now.
But the Chinese, unlike the other parts of the world, actually figured it out. They figured out how to raise the standard of living of their people. And here comes the part Americans have so much trouble with. They figured out how to do it better than we did it. Which, by the way, shouldn't upset you. That's the history of the world. The new generation hopefully learns from the older generation. The later effort learns from the earlier effort how to do it better. We used to call that progress. And that's what it is.
The Chinese figured out don't have an economic system in which everything is run by private enterprises because they mainly do what's good for the profits. they're in business to get. You've got to have a whole bunch of ways of doing things that are not held hostage to profit. There are a lot of things society needs that aren't profitable to produce. And if you don't have some solution to that, you do without those. And the argument of the Chinese is that's why we have the state sector. We have the government own and operate enterprises. Why? Things that are not done efficiently and effectively or not done at all by people who are interested in profit can be done by the government because it doesn't have to run on the basis of profit. The government can take a step back and say for example we need this. I give you an example. The Chinese said we need a modern rapid transit system. Airplanes have a lot of problems. We need fast, efficient rail. There was no way that private enterprise in China 20 years ago was going to invest in that. They weren't going to do it. China was too poor. It said they had all their usual reasons. So the Chinese government said, "We see that a powerful, fast, rapid transit system for trains is crucial to the growth of the Chinese economy as a whole." So even though it isn't privately profitable, by making the society more cohesive through a train system, we will develop. They made it. They now have the greatest train system on this planet. We're not even close to what the Chinese already have and they're building it out. They found this mixture state and private enable them to do stuff you can't do with something that's either private or state. It's that hybrid. It's that mixture that they have mastered. And we could learn from them which we would like to do every bit as much as they learned from us. Unless the political crap gets in the way. Unless the people who are making a private bundle are so afraid of what might happen if the government had the right to do the things we need that the private sector doesn't do. The private sector runs the railroads. That's why they ran them into bankruptcy. That's why the government took over Amtrak. Come on, let's be a little honest here. Have a little self-criticism. Stop being lost in that we're the good guy. data to bear is childish and we ought to learn to outgrow it and not be prisoners of an outdated ideology.
Here comes the irony. Where does the private sector go to bail us out of a critical moment when the economy looks like it's on the verge of collapse? They turn to the same government. They ridicule every other chance they get. Where else are they going to turn? And so the thought might occur if you weren't ideologically blinded. If we call the government in to bail out the failures of the private sector when it crashes, gee, maybe there's a role for the government all the time so we don't have the crashes. Whoa, what a new idea. But it isn't new. It's only new in a country that has been too afraid to look in the face of what's happening.
Look, let me put it another way, and I don't mean to scare anyone. Everybody knows that the majority of the people in the world to this day live in poverty. They are not wealthy. They are hoping to get to a point where they can count on food, clothing, shelter, medical care, education, the basics of a good life. and they are asking themselves a fundamental question just like Americans once did. How do we get out of this situation we're in and lift ourselves up to do better? Who's been doing that? Who can we learn from? And over the last 30 years, here's the one statistic I'll bore you with. As a professor, it's my job to know these statistics. the average annual growth of the American economy, percentage growth of the GDP, gross domestic product, which is just a measure of the goods and services uh the economy produces in one year. Every year for the last 30 years, it has grown in the United States on average about 2% 2 and a half% if you want to fudge the numbers a little bit 3%. What has been the experience of the People's Republic of China over those 30 years? They have grown on average 6 to9%. Friends, that's it. That's why they caught up. That's why they are now out producing the United States on many, many items with more added to that list each day. This has nothing to do with that. They don't have problems. They do. Big ones, important ones. They're struggling in many ways. But when it comes to growing up out of poverty, which is the number one concern of the people of this planet, they're looking now to China. The way they once did to the United States, but they don't anymore. And all the pretending in the world will not change that hard reality.
this business of heaving tariffs at everybody in the world, threatening and demanding that they come just as Mr. Lula refused to do and as the Chinese laugh at every time he does it as if the world wants to come and get on its knees and beg the dear Mr. Trump to give them a break. I understand why he loves it. That's who he is. That's his politics. That's what the people who support him like to see him do. But in terms of an economic policy, let me give you just a little idea if you haven't figured it out for yourself of what's going on here. First of all, you should have noticed by now, even if you don't think there is a world outside the United States, that Mr. Trump has attacked in economic terms every other country on the planet. Nobody does that. Nobody ever has done that. It's off the wall. It means, let's be real clear, if you put a tariff on, that's a tax. Never mind the funny story we ought to be telling each other here in America, where we've watched the Republican party be the party against taxes for the last century. The party that prides itself on always cutting them or lowering them or opposing them. A tariff is a tax, which means the leader of the Republican party is slopping the whole world with taxes. That's what this is. This is the anti-ax party having made an absolute to uturn to be the big tax party. And in case again people are a little fooled by his rhetoric when he says I'm going to hit China with a tax, be very careful here. The tariff that Mr. Trump creates doesn't hit China. US tariffs are paid by US businesses, not by Chinese businesses or Chinese people. None of that. Every one of the taxes, no matter what country, it is thrown up against in his language is a tax on American businesses. It's payable when you bring anything produced outside the United States into the United States to be sold. And that's 90% companies that do that. There are some individuals, but it's mostly a company business.
So then the real question is these companies now have to pay the overseas source of whatever they bring in plus the tariff to Uncle Sam and it's now in the billions of dollars. Well, then the logical question, just ask yourself, what is the American business that has to pay the tax to Uncle Sam going to do about the fact that their profits are hurt? Because in addition to buying whatever they sell in America from abroad, they have to pay Uncle Sam a brand new tax once that tariff is in effect. Well, I'll tell you what the American corporation is going to do. It's going to try to shift the burden of that tariff onto somebody else just like they try to shift every other cost that they have onto whoever they sell the output to. And you know who that is? You and me. We are going to be stuck with rising prices just as soon as Americans have used up all of the inventory they built up over the last 6 months watching Mr. Trump threaten tariffs on the whole world. Once they've used up those goods bought before the tariffs hit, then you're going to see the rising prices and they're going to hurt Mr. Trump because remember he campaigned on promising the opposite lower prices. They're not going lower. Have you seen a lot of them go lower? You haven't cuz they don't. You're going to see them go much higher as the businesses offload the burden of those tariffs. It is amazing to watch the nonsense being spoken about how wonderful these are without anyone simply taking the public through the simple economics of what a tariff is and how it works.
It's like again asking yourself, gee, why would the United States attack every other country in the world with tariffs? Threaten them. Tell them, "Look, you're going to have a hard time because American businesses are not going to want to have to pay a tariff. So, they won't buy from you. They'll go somewhere else." And don't think they're going to all produce here in the United States. That's another makeelieve Mr. Trump specializes in. I'm going to bring business back to America. No, you're not. You haven't done it yet. You didn't do it in your first presidency, and you're not going to do it now. And the reason again is simple. If Mr. Trump is enraging leaders around the world, and believe me, he is. Every one of them, some of them have the courage to stand up and say so. Like Mr. Lula in Brazil, most of them say it to each other, say it to their local citizenry. every leader on earth discovering that the country is subject to a tariff which will make it harder for the producers in that country to sell in America because Americans have to pay the tax on what those countries sell. They know it'll hurt them. They'll lose some business. And you know what every leader is going to do in the world? What they're already doing? good leaders, bad leaders, those in between. They're doing exactly what you would expect. They're blaming the United States for their economic troubles, even if that's only part of the reason. They now have a scapegoat. Mr. Trump has handed them that on a platter. So we have the world's leaders every day explaining to their people why the economic problems they face are caused by the United States. The cost of that to the future of this country exceeds by far everything Mr. Trump has promised. In short, it's all a con.
I don't think people are born stupid and live their lives that way. I think it's it's a problem. If people are behaving in a way that strikes us as stupid, the logical next question in my mind is why are they behaving that way? What what's producing it? And there I have an enormous feeling of empathy and sympathy for the American people. They have really been sold a bill of goods for a long time now. They've been told that the American dream, the idea that if you work hard in school and do reasonably well, you will get a good job and you'll be able to start a family and raise a family and live a decent life and retire and have time for yourself. All of those things, you know, the car in the garage, the chicken in the pot, the vacation uh by the lake, all of those things. I remember as a child, I was born in Ohio, I grew up there. These are the things we thought we would get if we played by the proverbial rules. Well, for most of the American people, the statistics are crystal clear. That promise that you would have that you can look forward to it. It would be the reward for your work, your study, uh your applying yourself, all of that. That was a lie. they haven't delivered. It's not that somebody was bad to you. It's not that. It's that the system in which you live doesn't provide that anymore. Not to you and not to most of the people. The top 20% in this country live that story. That's why they believe it's still true and they don't want to face the fact that for 80% of the people it isn't true anymore and there's no prospect of it coming back. I think for the American people to put it in a nutshell it's been a shock a shock to face that that was even possible. No one told them, "You might not be able to get a job or you might not get a job that pays you enough to ever settle down. You can't have a family. You can't have children." At every turn, even if no one says it in your face, you face it anyway. And that's a shock. And I'm not surprised that people who are in a shock don't pay close attention to that barker you talked about who says, "I know what the problem is." For example, the problem is those immigrants. Oh my god, we're going to have that one run against us again. country after country for centuries gets itself into a difficulty and blames whoever is the latest arrival, the immigrant.
As I like to remind Americans, we are a nation of 330 million people. That's pretty big. The total number of undocumented immigrants in this country, according to Mr. Trump's own figures, are about 11 million at the most. There is no way. I'm a professor of economics. Take my word, please. There's no way that 11 million of the poorest people in the world are shaping the economy of 330 million Americans. Anyone who says that is, I'm going to be real nice, out of touch with reality. That's make believe. But you know, if you're shocked, if you're really upset that you haven't been able to give to your children the kind of future you and everyone else promised them, you might be tempted to believe that if only you could get rid of the immigrants. Why, then everything will change. Let me assure you, you can deport every poor soul that the ICE folks beat up and you will not change the economic problems of the United States. Not only that, you'll probably make them worse. And you know why? Because the immigrants do the work of this country. They pick the fruits. They wash your car. They do the things at the bottom as immigrants always do. And they get paid very poorly. And if you don't have 11 million of like those people doing those jobs, which is what most of them do, well, you're going to have to pay real money to American citizens to do it. And you know what happens to the price of the banana you eat or the apple that got picked for you? You're going to have to pay more for it cuz the wages are going to go up. Hello. Have you thought about that? Deporting immigrants is an inflationary act. It may look good on TV. It may get Mr. Trump the votes of shocked, upset people looking for something they can do, but it is not a problem solver. And it will come back to haunt us in many ways as the story of our cruelty right now to immigrants will be told and retold in the future of this.