Sunday, December 23, 2018

Steve Moore’s Disappointing Performance

Stephen Moore
A Don Boudreaux letter to The Hill:

Stephen Moore’s defense of Trump’s punitive taxes on Americans who buy goods assembled in China reads like a defense-lawyer’s brief for a guilty client (“Trump will win the China trade war,” Dec. 18). It’s disappointingly devoid of serious analysis and marred with logical contradictions.
Any serious assessment of Trump’s tariffs would recognize the harm that these tariffs impose on American consumers as well as on American producers who use tariffed goods as inputs. Yet Moore ignores these harms. Any such assessment would warn against the cronyism that is inevitably uncorked by belligerent protectionism. Yet Moore writes as if the Trump administration is a council of saints utterly immune to the pleadings of special-interest groups.
Any such assessment would point out that nearly all of the complaints that Trump, his lieutenants, and Moore have with Chinese trade practices are ones that could and should first be brought before the W.T.O. Yet Moore mentions neither the W.T.O. nor the fact that the Trump administration is undermining the legitimacy and efficacy of that organization – one with a good track record of settling trade disputes.
Any such assessment would also not feature the doozy of an error that Moore commits when he asserts that the buildup of China’s military “is financed by our one sided trade relationship with China.” To the extent that China has a trade surplus with the U.S., the Chinese are financing activities, not in China, but in the U.S. – including, when the Chinese buy U.S. Treasuries, U.S. military spending. Dollars invested by the Chinese in the U.S. are dollars not spent to acquire resources for use in China.
Finally, any such assessment would not, in one place, suggest that China’s own trade restrictions are an unfair advantage for China, while, in another place, recognize that the “ultra protectionist policies out of Beijing have denied their one billion citizens a higher standard of living.”
The fact is that, as Moore’s essay inadvertently proves, Trump’s trade policies have neither facts nor economic logic on their side. All that remains to defend these policies is legerdemain.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
The above originally appeared at Cafe Hayek.

1 comment:

  1. --- It’s disappointingly devoid of serious analysis and marred with logical contradictions. ---

    Not only devoid of serious analysis, professor. Moore's piece begins explaining why the U.S. will "win" this trade war by an appeal to hope: the hope that the president is as good a negotiator as one would presumably understand he is if one reads Trump's book 'The Art Of The Deal'.