Friday, June 5, 2020

Top Trump Adviser Calls For Shrinking of American Economy

Peter Navarro
In a Wall Street Journal op-ed President Trump's economic adviser, Peter Navarro, writes:
 To be both prosperous and secure, America must bring its manufacturing and supply chains home, particularly from countries that mean to do us harm. That’s how we become too prosperous to hate.
This would do nothing but shrink the U.S. economy. If work isn't off-loaded to other countries, it means that work must be done domestically and limits the ability of American workers to take on more complex and sophisticated work.

This is Economics 101.

It is remarkable that Navarro is advising the President. I doubt he could even pull a Gentleman's C grade in a Greg Mankiw course with the advice he is giving,

As for a threat to "secure" supply chains because of overseas manufacturing, that is for every consumer and business to determine on an individual basis. If certain consumers and businesses do believe there is a real threat to an important supply chain, they can stockpile supplies or take other measures.

Navarro's one size fits all "block foreign trade" to secure all supply chains is blunt instrument central planning.



  1. "Secure the supply chains!" if we're at war, and these are supplies of war materiel for an overly-extended, invading army or something. lol.

  2. We are at war. And we need to be ready for war war at all times.

  3. Automating a process and keeping the production domestic has the same effect with regards to allowing people to move on to other things. Also, there will always be a segment of the population that cannot move on to more complex things. It's an IQ distribution problem. There will be some tasks that cannot be automated even if 90% of them are. With such production remaining in the USA then there will be honest productive work for these people to do that is far more productive (higher paying) than the service industry. This then serves to reduce the welfare state.

    Welfare is a horrible solution to IQ distribution problem on so many levels.

    Furthermore the goal of China's government has been to have the means of production located within the territory it controls. Many of the reasons for this should be obvious. To them it is a war of sorts. To ignore that is silly.