President Trump’s view of global trade is so bizarre, risky, uninformed, misguided, and self-destructive that I periodically try to maintain my sanity by reviewing the wisdom of one of America’s greatest presidents.
- Ronald Reagan’s remarks in 1985 about the self-destructive impact of trade barriers.
- Ronald Reagan’s remarks in 1988 about the economic benefits of trade liberalization.
Today, let’s travel back to 1982 for more wisdom from the Gipper.
What’s especially remarkable is that Reagan boldly defended free and open trade at the tail end of the 1980-82 double-dip recession that he inherited.
Many politicians, facing an unemployment rate above 10 percent, would have succumbed to the temptation for short-run barriers.
But just as Reagan did the right thing on inflation, even though it was temporarily painful, he also advocated good long-run policy on trade. He understood Bastiat’s wise insight about “seen” benefits vs “unseen” costs.
Trump, by contrast, has a very cramped and limited understanding of trade. Which is why almost all economists disagree with his approach.
…on Trump’s other point — that protectionism offers Americans the road to riches — most specialists in international trade would beg to differ. “Even by Washington standards, Trump’s tweet was profoundly wrong,” said Daniel J. Mitchell, a conservative economist. In a recent column criticizing Trump’s tweet, Mitchell wrote, “The last time the United States made a big push for protectionism was in the 1930s. At the risk of understatement, that was not an era of prosperity.” …said Lawrence White, a professor at New York University’s Stern School of Business…”tariffs, like any tax, generally introduce an inefficiency and makes the two sides of the trading relationship poorer — not richer.”
I appreciated the chance to be quoted in the story, and I also was happy a link to one of my columns was included.
Though I gladly would have traded that bit of publicity if Politifact instead had shared my “edits” to Trump’s infamous “Tariff Man” tweet.
I’ll conclude by noting that Reagan’s record didn’t always live up to his rhetoric.
P.S. I winced when Reagan positively cited the International Monetary Fund in his remarks. Though maybe the IMF in the early 1980s wasn’t the pro-tax, anti-market, bailout-dispensing bureaucracy that it is today.