One shows that they are economic fraudsters over and over, with discredited ideas, but they keep on coming back. From WaPo:
…his top economic advisers … to map out a trade-focused economic plan for his presidential bid…. including former senior White House officials Larry Kudlow and Brooke Rollins, as well as outside advisers Stephen Moore and former House speaker Newt Gingrich…
Two observations:
- The main “big idea” seems like a pretty bad idea.
“I think when companies come in and they dump their products in the United States, they should pay automatically, let’s say a 10% tax.” (Business Insider)
If you feel a sense of deja vu, you could be excused. Did the imposition of Section 232 and Section 301 tariffs “win the (trade) war”? Just a reminder of what happened to the non-oil trade balance/net exports (the total trade balance looks similar):
Figure 1: Net exports ex-oil, in billions $, SAAR (blue, left scale), and as ratio to US GDP, % (tan, right scale). Light orange denotes imposition of Section 232 and Section 301 tariffs. NBER defined peak to trough recession dates shaded gray. Source: BEA 2023Q2 advance release, NBER, and author’s calculations.
For discussion of the other counterproductive aspects of the Trump tariff war, see for instance here.
2. If the idea was to run on the lousy economic performance under the Biden administration (maybe lousy to come), this might be a hard slog. Consider the latest forecasts and nowcasts of US GDP.
Figure 2: GDP (bold black), SPF median (red), WEO forecast (orange square), and GDPNow of 8/16 (teal square), all in bn Ch2012$, SAAR. Source: BEA 2023Q2 advance release, Philadelphia Fed, IMF July WEO, Atlanta Fed, and author’s calculations.
As noted elsewhere, negative GDP growth quarters have dropped out of consensus views as time has progressed. Obviously, since all data are going to be revised, perhaps substantially especially when considering GDP data, the fact that the outlook is improving as more data comes in (and inflation falls) indicates that a really hard landing scenario is less likely (conditional upon no big negative surprises).
What about the negative term spread. That indicator is still signalling a recession. Interestingly, the implied negative y/y growth rate of industrial production is stil pretty modest for mid-2024.
“Trump vows massive new tariffs if elected, risking global economic war
Former president floats 10 percent tax on all foreign imports and calls for ‘ring around the collar’ of U.S. economy”
If one goes back a few year, Kudlow and Moore was advocates of free trade. Yea – they would sell the only principled argument they ever had for a couple of Junior Mints.
Brooke Rollins was president and CEO of the Texas Public Policy Foundation, an Austin-based free-market think tank, from 2003 through 2018?
Wait – tariffs are part of the free market agenda? She is worse than Kudlow and Moore.
Biden hasn’t exactly shown any courage in walking back the Trump tariffs. It seems the China hawks prevail in the administration.
I would have liked Biden to say on day one that he’s throwing out the 4000 page tariff book for every one. America is not afraid to compete in the world market and is wide open for business.
But it didn’t happen.
It is true that Biden didn’t remove most Trump-imposed tariffs. It is not at all evident that this is a matter of courage. Biden did not make lifting of tariffs a part of his campaign platform.
As a Senator, Biden voted in favor of removing tariffs just half of the time in a 15 year period and for eliminating subsidies in just 3 of 11 chances to do so:
https://www.cato.org/blog/joe-bidens-so-so-record-trade
Biden simply isn’t a big anti-tariff guy. Courage doesn’t come into it.
Our good man Mr. Krugman called this “Zombie Economics”. That’s my personal favorite descriptor, but it has earned many monikers over the years. And I never get tired of these style posts, as it appears these zombies will always be with us. Or they are the cognitive version of “sticky prices” (If you believe in “sticky prices”, I don’t for the most part, but I think it’s a useful analogy for the moment).
Her greatest and very undeserved honor in life appears to have been being the predecessor to Susan Rice. Would love to have been a fly on the wall during that office turnover between administrations. Do you think Rice had to work extra hard to talk to Rollins in monosyllables??
“I think when companies come in and they dump their products in the United States, they should pay automatically, let’s say a 10% tax,” he told Fox News on Thursday. “That money would be used to pay off the debt. It’s a massive amount of money.”
Massive? The highest ever level of imports was $1 trillion per year (2022QII). And tariffs tend to reduce imports. So a 10% tariff would raise less than $100 billion per year. Massive maybe but still short of Trump’s deficits.
Problem is that if you are dumb as a door and don’t know how to think critically – then tariffs sounds good. Even worse, they can in some cases both be justified and a good idea.
In cases of dumping they can be a needed as a defensive measure. If critical supplies end up dependent on less reliable sources, then there is a strategic argument for using tariffs to preserve domestic production.
The fact is that Biden has dealt with those problems effectively, whereas Trump failed miserably. I hope Biden will avoid trying to argue against tariffs and instead just point to his success (and Trumps failure) in getting jobs back to the US. He may point to how Trumps tariffs increased the US cost of steel and aluminum and made our factories less competitive on the world markets (tough it has to be simplified). Ask why didn’t Trump “fix” the economy in his first term when he had the power. I mean if you are a competent President then you don’t just talk about fixing stuff, you get it done – and you don’t whine about all your failures being someone else’s fault.
kudlow’s expertise permits him to lead the russian moon landing program. that is about it. he is another example of old white man speaking with authority entitlement syndrome. nothing but foolishness spouts from his mouth these days. it has been that way for decades now.
In an earlier comment I used FRED in a weird sort of way but double checking with Census, it seems we imported $3,277.3 billion of goods in 2022. So if we imposed a 10% tariff on all imports of goods, there is still no way that eliminated those Trumpian government deficits all by itself. Even if the demand curve were perfectly inelastic (which is not true), the tariff revenues would be less than $330 billion.
Now I’m sure the team of Kudlow and Moore is going to spin this differently. They always do whatever the boss wants.
Who on Earth could have foretold of these events, and say for example, stated it about 200 times on his favorite economics blog?? It’s all a “grand mystery” isn’t it??
https://www.wsj.com/finance/stocks/wall-streets-china-dreams-slip-away-f68ac708?mod=hp_lead_pos1
But all of our MBA geniuses running these corporations are “Masters of the Universe”, aye??? And American TBTF CEO’s are good at providing jobs to grandkids, nieces, and nephews of CCP members so they can go on Bloomberg as “analysts” and stutter in horrific English that they think China’s next GDP will come in “at 6%, easy”. “So American bank capital is dispersed in an efficient way, to the most talented workers”. Entertaining in a carnival freak show kinda way.