Keep it “simple” for popular consumption (good politics, perhaps), ignore complexity (bad economics).
Which ever tariff equation was used ( robust or otherwise) this only addresses first-order direct effects.
Policy set by grown ups based on “best practice” would automatically consider second-order indirect effects (e.g. price inflation), and third-order induced effects (e.g. lower growth/recession). Yet more complexity! Simples.
I don't think you mentioned it in your text, but the explanation of the formula says that it aims to calculate the tariff rate needed to reduce the trade deficit with each country to zero. Let's assume for the sake of argument (1) that the formula makes sense on that basis (it seems to), (2) that the two estimated parameters have been set to reasonable values (more questionable), and (3) that reducing your trade deficit with each country to zero is a sensible objective (very dubious). Given those assumptions, we might say that the formula is reasonable. But it would remain the case that Trump lied (or was misled by his advisors) when he called these "reciprocal" tariffs and claimed that they were based on the given country's own tariffs and other barriers to trade.
Regardless of whether this administration's economic policies are broadly good ones, it must be a massive headwind to have those policies directed by a lawless, lying, chaotic, incompetent, vain president with no interest in facts. And not just the president. He has staffed his administration with yes-men and yes-women, many of them unqualified for their jobs, and even those who are qualified, such as Scott Bessent, know that they cannot speak too much truth to power if they want to keep their jobs. No wonder, then, that we see absurd errors like tariffs on uninhabited islands. How can business people, investors and trading partners have any confidence in such an administration?
Talking of Victorian ghosts, to what extent do you think Imperial arrogance played a part in all this, in the Brexiteers’ case the delusion that we are still somehow a global power broker? All the ‘holding all the cards’ comments always struck me as people cosplaying Victorian statesmen.
Interesting that the Wall Street Journal is Trump critical, while Fox News continues to be mainly pro Trump. What does Rupert really believe. I wonder?
Noam Chomsky once said 'The purpose of the Wall Street Journal is to tell businessmen what they *need* to hear. The purpose of the Wall Street Journal Editorial page is to tell businessmen what they *want* to hear
The Trump Slump should be great for reducing carbon dioxide emissions and thus slowing global warming.
Thanks Donnie.
Appreciated your article, Ben.
Keep it “simple” for popular consumption (good politics, perhaps), ignore complexity (bad economics).
Which ever tariff equation was used ( robust or otherwise) this only addresses first-order direct effects.
Policy set by grown ups based on “best practice” would automatically consider second-order indirect effects (e.g. price inflation), and third-order induced effects (e.g. lower growth/recession). Yet more complexity! Simples.
I don't think you mentioned it in your text, but the explanation of the formula says that it aims to calculate the tariff rate needed to reduce the trade deficit with each country to zero. Let's assume for the sake of argument (1) that the formula makes sense on that basis (it seems to), (2) that the two estimated parameters have been set to reasonable values (more questionable), and (3) that reducing your trade deficit with each country to zero is a sensible objective (very dubious). Given those assumptions, we might say that the formula is reasonable. But it would remain the case that Trump lied (or was misled by his advisors) when he called these "reciprocal" tariffs and claimed that they were based on the given country's own tariffs and other barriers to trade.
Regardless of whether this administration's economic policies are broadly good ones, it must be a massive headwind to have those policies directed by a lawless, lying, chaotic, incompetent, vain president with no interest in facts. And not just the president. He has staffed his administration with yes-men and yes-women, many of them unqualified for their jobs, and even those who are qualified, such as Scott Bessent, know that they cannot speak too much truth to power if they want to keep their jobs. No wonder, then, that we see absurd errors like tariffs on uninhabited islands. How can business people, investors and trading partners have any confidence in such an administration?
Talking of Victorian ghosts, to what extent do you think Imperial arrogance played a part in all this, in the Brexiteers’ case the delusion that we are still somehow a global power broker? All the ‘holding all the cards’ comments always struck me as people cosplaying Victorian statesmen.
Interesting that the Wall Street Journal is Trump critical, while Fox News continues to be mainly pro Trump. What does Rupert really believe. I wonder?
It might mean that Rupert feels that the WSJ needs to retain credibility, while Fox is preaching to the cult.
Noam Chomsky once said 'The purpose of the Wall Street Journal is to tell businessmen what they *need* to hear. The purpose of the Wall Street Journal Editorial page is to tell businessmen what they *want* to hear
Fox News, and all of the financial cable shows, are editorial.