A Very Dumb Idea

Eventually, the incoming ‘data’ will tell you something. But only when it is too late. And now if Trump’s tariffs are implemented, we will wait for the data to tell us what we knew all along.

“Why Trump Unleashed Tariff Chaos” is still a popular headline at Bloomberg.

Search for ‘Trump tariffs’ on Google and you will get “about 357,000” results.

The Wall Street Journal can be counted on to be fairly reliable on economic issues. It recognizes that the government is generally incompetent and malevolent — at home. But when it goes abroad, somehow it becomes an angel…doing good by forcing the foreigners to bend to its will.

On ‘Trump Tariffs’ the WSJ might have gone either way. As an economic policy, tariffs are clearly foolish. But as a foreign policy tool, they can be used to bludgeon friends and adversaries alike.

As it turned out, the WSJ has come up with a remarkably sensible view. Phil Gramm and Donald Boudreaux write:

Trump’s Tariffs Are as Bad as BidenomicsBoth models of state-directed capitalism misallocate resources and make the nation poorerNot since Herbert Hoover signed the Smoot-Hawley Tariff has a president chosen to disregard a larger body of informed opinion than President Trump did when he instituted his protectionist trade policy. Based on a series of verifiably false grievances — wages haven’t grown in 50 years, manufacturing has been hollowed out by imports, countries with trade surpluses are “ripping us off” — Mr. Trump used constitutionally questionable powers to abrogate Congressionally approved trade agreements and undermine the world’s trading system.

we just look for patterns — historical, political, economic.

Many people think you just have to keep your focus on the incoming ‘data.’ Even the Fed claims to be ‘data-driven.’ But the data is mostly noise and nonsense…without melody or rhythm. It’s like the background hum on an airplane…everything from A flat to E sharp is there. You hear what you want.

(Our aged mother thought once she heard English hymns on Air France. She was so sure of it, she asked a stewardess where they got the soundtrack. The young lady humored her…thinking she must be crazy. After all, France is a secular state!)

Eventually, the incoming ‘data’ will tell you something. But only when it is too late. And now if Trump’s tariffs are implemented, we will wait for the data to tell us what we knew all along — tariffs are a very dumb idea.