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:
[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.

5 comments:

  1. Krugman was happy to go to trade war with China before Trump came along:

    Krugman calls for 25% tariff across the board on Chinese goods!
    http://www.nytimes.com/2010/03/15/opinion/15krugman.html?src=me

    "It’s true that if China dumped its U.S. assets the value of the dollar would fall against other major currencies, such as the euro. But that would be a good thing for the United States, since it would make our goods more competitive and reduce our trade deficit."

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    Replies
    1. This blog used to criticize Krugperson. Now it cites him to bash Trump!

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  2. Well, apparently unlike you, I am not cultish. When someone speaks relevant truth, I cite it. What do you do? What cult do you follow?

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    1. It does indicate that Krugman knew the truth all along and he simply ignored it to push the political agenda he and those who pay him hold.

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    2. +1

      That accurately sums up Krugman over the last decade plus.

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