Sunday, June 25, 2017

Trump's Failure to Understand Superior Knowledge in the Field of Economic Policy

During a rally in Iowa on Wednesday night, President Donald Trump responded to criticism about his choices for top economic jobs, including billionaire investor Wilbur Ross for Commerce secretary and former Goldman Sachs President Gary Cohn for chief economic advisor.

Trump contended on Wednesday that wealthy people can better run the U.S. economy because they do not need money.

"I love all people, rich or poor. But in those particular positions, I just don't want a poor person," Trump said. "Does that make sense? Does that make sense? If you insist, I'll do it. But I like it better this way, right?"

He went on to say that the U.S. would not be taken advantage of because his appointees were also very shrewd businessmen,

This is just silly on many fronts.

First, in observing super wealthy people, I have noticed they are always interested in money, It does not matter how much they already have. So that they already have a lot of money does not mean they are not going to try to finagle even more money. It means they are likely going to be focused on finagling more.

Second, poor people may be relatively poor by choice and just not be focused on more money. This does not mean they can not be valuable economic policy advisers. Arguably the greatest economist ever, Ludwig von Mises, told his wife:
I am writing about money, but will never have much of my own.
Second, just because someone is rich does not mean they are knowledgeable about economics.

Ross has already made numerous asinine comments about international trade.

Just because Michael Jordan could jump high on the basketball court, it doesn't mean you should rely on him for knee surgery. Just because a person is rich, it doesn't mean you should rely on him for economic policy advice. And especially when it comes to former Goldman Sachs investment bankers, Economics teaches that investment banking firms have more incentive to get next to the seat of power and maneuver crony deals than any other sector. And history has borne out that of all the investment banking firms, Goldman Sachs likes to have its employees near the power center.

You are never going to drain the swamp when the alligators are providing the advice.

Finally, there is nothing to negotiate with foreign governments from an economic perspective, You just open up trade: Free trade, beginning, and end of story, Anything else is a crony deal.



  1. Bob, I have not read a more cogent, astute, or better example of what spews out of the mouth of Trump on a regular basis that, horror, many people get all excited about, compared to the reasoned response you have made which drips of truth. Keep up the good work Bob to Make America Smart Again (or maybe for the first time).

  2. You are absolutely correct on these points, however, my reading of what he said was that he was more so responding to the left and their moronic reasons for wanting poor people, which are different from the reasons you give. The left wants poor people in because they want govt to do whatever poor people want, in the same way the want govt policy on free birth control and stuff to be determined by women almost exclusively because women are 'affected by it', as if people who are affected by a situation make unbiased determinations of the morality of govt or private actions.

    This is my speculation, however. He didn't say any of this so just my guess as to what he meant, who knows.