[Trump]sees international trade the way he sees everything else: as a struggle for dominance, in which you only win at somebody else’s expense.
His Inaugural Address made that perfectly clear: “For many decades we’ve enriched foreign industry at the expense of American industry.” And he sees punitive tariffs as a way to stop foreigners from selling us stuff, and thereby revive the “rusted-out factories scattered like tombstones across the landscape.”
Unfortunately, as just about any economist could tell him — but probably not within his three-minute attention span — it doesn’t work that way. Even if tariffs lead to a partial reversal of the long decline in manufacturing employment, they won’t add jobs on net, just shift employment around...Taken together, the new regime’s policies will probably lead to a faster, not slower, decline in American manufacturing.
Friday, January 27, 2017
Krugman Blasts Trump's Fundamental Ignorance of Basic Trade Theory
New York Times Keynesian economist Paul Krugman is correct when he writes:
at 7:20:00 AM