That’s the title of an opinion piece in Finance and Development by former CEA member (2025-26) and UW Madison economics professor Kim Ruhl:
The world is now reevaluating the role of economic interconnectedness in global affairs, mindful that more interconnection means more dependencies that adversarial nations can leverage to get their way in other areas of international relations. Resilient economies must be the response. A country must have access to the resources it needs to fight a protracted war. It must have a reliable supply of medicines, microchips, critical minerals, and other vital inputs, regardless of changing global alignment. And it must be able to rapidly increase production in response to an emergency such as COVID-19.
In the United States, President Donald Trump’s administration is working to de-risk supply chains and build domestic capacity in key industries to enhance economic resilience. This implies a modification of the policy of near unconditional openness that characterized the past.
These policies will, in some cases, reduce economic efficiency relative to a world in which we ignore geopolitical risk. These are the necessary costs of resilience. Economic modeling that recognizes the trade-off can guide policymakers. The challenge is to minimize the costs and ensure that crude protectionism is not enacted in the guise of national security.
The piece continues:
Strategic state direction, subsidies, financial repression, protectionism, and regulatory arbitrage are political forces, not economic fundamentals. These policies are particularly dangerous when deployed by large adversarial countries. Economic thinking must account for more of these forces, and economists can increase their engagement with them.
Policymakers need frameworks to analyze the strategic considerations of their choices. Does a policy build leverage for the US or vulnerability? How can we identify which goods should be controlled for national security reasons while avoiding unnecessary protectionism? Which goods must be sourced domestically, and which can be imported from allies? How do we restart a domestic industry as efficiently as possible? Perhaps most important is the development of tools that clearly identify the trade-offs between economic efficiency and strategic objectives.
Economists already have many of the analytical tools needed, and these can inform decision-makers about the trade-offs and unintended consequences of policies. Tariffs and sanctions are perhaps the most studied policy levers, but price floors, stockpiles, export restrictions, and investment agreements are just some of the relevant policy instruments available. Tax policy, industrial policy, and regulatory infrastructure may appear to be domestic policy, but they are instruments of economic statecraft as well, and should be studied in that context.
The entire piece is here.
That is a lot of lipstick on that Pig. Can’t even se what is front and back end of it. Sure there are well-considered and sensible tariff policies like the Biden administrations. But Trump is putting tariffs on things for all the wrong reasons or no other reason than being upset with someone or something in a country. GOP has always been saying (in other words) “to hell with the country just put money in the pockets of big business. Trump has been saying (in other words) “to hell with the country just put money in the pockets of ME”. The right way to protect domestic production of critically important products is to mandate that government buy exclusively domestically produced products. That way you avoid jacking up prices – even as you keep a domestic pipeline alive. If need be subsidize domestic producers.
Wow, that Koolaid must be tasty! And what Ivan said!
Clearly, Ruhl understands his topic well enough to be useful at the fringes of the right-wing echo chamber. Equally clearly, he is pandering to the felon-in-chief. His uncritical mention of the felon’s policies – policies which Ruhl had a hand in crafting – gives the game away:
“…President Donald Trump’s administration is working to de-risk supply chains and build domestic capacity in key industries to enhance economic resilience.”
“These policies will, in some cases, reduce economic efficiency relative to a world in which we ignore geopolitical risk. These are the necessary costs of resilience.”
Ruhl makes two implicit claims, both of which are false. One is that, before the felon showed up, U.S. economic policy did not engage in strategic thinking. The other is that the felon’s shift toward autarchy represents “the necessary cost of resilience.” Balderdash. The felon’s love of bullying and of personal enrichment drive U.S. policy right now: renewable energy adoption slowed; Mexico and Canada, where supplies are relatively assured, alienated; Brazil faces an additional 25% tariff because of Lula da Silva’s “ego”? Sorry. Whose ego? The felon’s self-aggrandizement and self-enrichment are not necessary to U.S. resilience. They are harmful to it.
The felon misunderstands the world, has no head for complexity or detail, refuses the advice of specialists and is utterly capricious. The felon’s weaknesses do not lead to policies necessary to U.S. resilience. They lead to uncertainty, corruption, rent seeking and slower growth.
Rethink U.S. strategic economic policy. Yes, every day, all the time. Policy change under the felon regime? Disaster. Ruhl is a tenured shill.
“President Donald Trump’s administration is working to de-risk supply chains and build domestic capacity in key industries to enhance economic resilience.”
Joseph Stiglitz was saying this 30 years ago. And Biden was the one that set policy in motion. Sorry lady but your guy is very late to this game.
Interesting blog post about on-shoring nitrile gloves and generic drugs
https://www.science.org/content/blog-post/chemical-onshoring-all-kinds
Excellent link.
Ruhl might want to look at some economic history from about 100 years ago. It might be instructive.
Ouch.