Sunday, November 27, 2016

What Economists Think About Donald Trump’s 100-Day Plan

On his way to becoming the president-elect of the United States, Donald Trump resolved to fix issues ranging from national security to economic growth. As part of his campaign, Trump proposed a 100-Day Plan that included “seven actions to protect American workers” from, among other things, the Trans-Pacific Partnership, currency manipulation, and energy drilling restrictions.

 Leading economists, polled by Chicago Booth’s Initiative on Global Markets as part of its Economic Experts Panel, overwhelmingly disagree with his seven-point plan.

Here are comments, from polled economists, that I agree with:

Christopher Udry, Yale“These seven actions are symbolism (5, 6), actions with trivial immediate but disastrous long-run consequences (7), or threats of trade war (1-4).”Response: Strongly Disagree 

José Scheinkman, Princeton“Most low-skilled workers would be hurt by higher cost of imports, disruption of global supply chains caused by tariffs and retaliations.”Response: Strongly Disagree
These are Keynesian responses that I disagree with partially, for their view that government stimulus will be somewhat beneficial when it is nothing but shifting resources into inefficient government directed make work programs:

Barry Eichengreen, UC Berkeley
“Short-term fiscal stimulus will be a plus for the middle class, but then the negatives (investor uncertainty, inequality, geopolitical risk) will dominate.”
Response: Disagree

Daron Acemoglu, MIT
“Increased infrastructure spending could help construction, but the overall plan won’t help workers and will likely reduce medium term growth.”
Response: Disagree

David AutorMIT
“Policies that raise import prices, deregulate dirty industries, and launch big infrastructure projects will boost non-college wages and jobs.”
Response: Agree



  1. He's going to protect us from currency manipulation? Maybe he'll bring back sound money then.

  2. A major problem with Austrians trying to explain reality to average people is that Austrians tend to explain things as if the “student” of their instruction was a grad student in econ.

    Every explanation of any Austrian analysis should begin with explaining that the Keynesians, Monetarists, MMTers and most average people think that “the economy” needs a “boost” or “stimulus” from the government to get it “going”, like a 6 year old learning to ride a bike with no training wheels. People with that view are going to be totally unreceptive to our message until it can be dislodged. And it cannot be dislodged unless and until we actively describe and explain that it is ludicrous.

    I’m constantly demanding that Keynesians point to that specific historical event where the market demonstrated it lacked “momentum” and failed thereby requiring “stimulus”. They cannot and will not do it. They will throw a hissy fit and call you names but they cannot identify that special time or event.

    Once people understand (or at least appreciate) the idea that the market does not have or lack “momentum”, they might be open to the idea that “stimulus” may indeed stimulate, but in a wasteful and unsustainable direction. But that cannot begin to happen unless we explain EVERY TIME that the market does not have or lack “momentum” that requires a “push”.