2 February 2016

The lesson of Donald Trump’s hats


Donald Trump is a loser.

That is the overwhelming consensus this morning, as Ted Cruz basks in the glory of his 28 percent Iowa win, while Hillary Clinton and Bernie Sanders continue to battle it out with almost 50 percent each. Trump, the self-proclaimed ultimate winner, has yet to break his twitter silence, but must be regretting his 2013 tweet: “No one remembers who came in second”.

But in all the articles flooding the web this morning, analysing where The Donald went wrong in Iowa, and if this marks the beginning of the deterioration of his campaign or just an embarrassing blip, one number stood out in particular for me: $1.2 million.

That is the amount the Trump campaign has spent on hats.

This is, I admit, one of the higher estimates for the intriguing Hat Spending Figure. The Guardian puts it at a remarkably exact $325,699.88, while the Independent goes for $450,000. Meanwhile Politico reporter Kenneth P. Vogel, who co-authored the article referring to the $1.2 million figure, tweeted last night:

Clearly Trump has spent a small fortune on a horde of iconic Make America Great Again hats, which I can only assume will shortly become essential attire for thousands of college costume parties. It’s an amusing fact, but in the scheme of analysing his meteoric rise and humiliating second-place last night, what does it tell us?

Two of Trump’s most popular policy proposals (excluding his moronic statements on banning Muslims from the US) have been his commitment to deporting 11 million undocumented Mexican immigrants and imposing a 45 percent tax on Chinese imports. Both of these have garnered much ridicule from economics and political pundits alike, but for a real life experiment into what effect these would have on American enterprise, look to the hats.

The Independent gleefully reports that the Californian company which made most of the Trump campaign hats is staffed mainly by Latino immigrants. Clearly the cheap labour provided by immigrants (both documented and undocumented) proved irresistible to a business mogul funding a presidential bid. And there would be nothing wrong with that, except for the hypocrisy of playing up to panic about immigrant labour by proposing a $200 billion deportation plan and a giant $15 billlion wall paid for by the Mexicans, while taking full advantage of the great benefits immigration has to offer. It seems that, according to Trump, Mexican labour should be banned, but only by companies making things other than Donald Trump hats.

Still, at least Trump isn’t importing his hats from a factory in China. Other Americans, however, most certainly are. Heather Timmons at Quartz reports that “US businesses are buying thousands of ‘Make America Great Again’ hats from China”. And they’re selling them at a discount:

“Sold by Qingdao Jeff Help You Industry & Trade, the 100% cotton embroidered ‘trucker hats’ come in customized colors. The minimum order is 50, and if you order more than 1,000, each one will only cost you US$0.90. (Official Trump hats from his presidential campaign go for $30 each.)”

So far over 10,000 of these Chinese knock-offs have been sold, and, Timmons points out, most of the buyers are US businesses. The highest price (for 50-99 hats) is $4 per unit. Even with Trump’s proposed 45 percent surcharge, Qingdao Jeff Help You’s hats would cost just $5.8, six times cheaper than the authentic version.

But then, that’s capitalism for you. Trump fans want Trump hats, and if the official merchandise is too expensive, the market will provide.

All in all, the microeconomics of the Trump hats industry serves as an allegory for Trump’s disastrous economic platform. It sounds so easy, but look beyond the bluster, and it turns out our interconnected world is a bit too complicated for a simplistic slogan that can be branded onto a cheap baseball cap. And while this doesn’t fully explain why he lost in Iowa, it does reveal the gaping flaws with his countless outrageous proposals and overall candidacy.

Only one question remains unanswered. We know who is making the hats, how they are being sold, and how much was spent on them. Who is buying them remains a mystery.

Rachel Cunliffe is Deputy Editor of CapX.