Springtime for Sycophants

Trump only wants advisers who treat him like a tin-pot dictator demands.

Comments: 253

  1. Navarro's statement regarding Trumpigula's " intuition is always right " is indeed gob-smacking; guess that's why the dictionary now just displays a photo of Navarro beside the word 'kakistocracy' that Dr. K. has so often invoked describing this rolling Trumpster fire of an administration.

    The most important thing for Progressives is making sure GOP'ers are strapped hook, line, and sinker to Agent Orange from KAOS - there should not be a smidgen of daylight between him, them, and their party, no matter how they try to distance themselves; if this was all going on somewhere else in the world, GOP'ers would be deriding the fiasco as banana republic politics.

  2. I am losing faith in my country. I am so sad. So many have become hateful ignorant stooges, easily manipulated by bombast and stupidity, and distrustful and skeptical of science. I hope some day soon we can repair the damage done to the world and our country by these hateful, ignorant, anti-democracy republicans and their leader d. trump.

  3. If you were an unknown and probably not well-paid academic, instead of a Nobel prize winning economist, professor, and NY Times columnist, you might tell the President of the United States whatever he wants to hear in order to advance your career.

  4. As a retired, moderately paid and definitely not Nobel Prize winning academic I can say that most academics would not tell Dear Leader what he wants to hear for career advancement. That would most likely be a career ending strategy.

  5. Barbara: Integrity is ALWAYS priceless. Without integrity, you are nothing.

  6. Here's what i found out about Navarro:

    "Navarro’s only job before joining the White House as director of the National Trade Council was as an economics and public policy professor for the University of California-Irvine, where he had a salary of $240,000.

    He has a variety of assets, including stocks, bonds and investment property. All told, the value is more than $1 million, but not by much. Most of his assets are tied up in his pension and investment properties, which have mortgages attached to them."

    If this factual, he hasn't done very well for someone supposedly an expert on investment. On the other hand UC retirement benefits are very generous, so he has a good income and isn't doing the Trump thing mainly for the money. Unless he can convince his boss or his kids to cut him in on a big deal.

  7. This is not going to end well for working Americans, retired Americans, and any American who is not rich. Trump is a failed businessman. He has stiffed people with whom he had contracts in terms of payments. He showed, even before he ever ran for office, a tendency to speak first and never look back, his interest in being always right, and an inability to accept advice from anyone. He's quick to disparage those around him. These are not qualities that will attract good people or keep anyone with any sense of self preservation around him for long.

    Trump failed to learn what most successful business people learn and what most of us learn before we get out of kindergarten: how to cooperate with others, how to deal gracefully when the answer is no, and how to accept not being the center of the universe. His obvious need to be flattered makes it impossible for him to hear what is being said unless it's beneficial to him. That does not make him a good president or businessman. It does open him up to being lied to, being manipulated by others to advance themselves.

    The GOP is enabling Trump and his fraud of a presidency. He is no more fit to be president than most of us are fit to win gold medals in an Olympic marathon. But most of us live in reality. The GOP and Trump are living somewhere far from the "second star to the right and straight on till morning."

  8. Ellen,

    How bitterly ironic you should bring up suicide rates right at this moment! The JAMA published a new study on the geography of suicide rates in the US. As you read it, superimpose the map of suicides on the 2016 electoral map...


  9. Rima,
    I wonder how the JAMA study you posted would corrolate with similar data (if it was ever done) on the "deaths by despair" that happened when secure jobs left after the break-up of the USSR. Deaths by alcohol there, mainly for middle aged white men who lost their place in the world - to oligarchs.

  10. It isn't just Krugman, though he had a very big influence on how unemployment was reported on and, later, how Senator Patti Murray secretly agreed to end long-term unemployment in her budget deal with Paul Ryan at the end of 2013. Now, we see the handiwork of the man who might have been Vice President. Tim Kaine will also vote with Republicans to roll back Dodd-Frank and allow for discrimination in lending. See: https://twitter.com/ddayen/status/973556377288302592

  11. Sloppy thinkers stick together. The Peter Principle. Who forgot to flunk this pair of heterodox in expensive suits in seventh grade when their aggressive ignorance and intellectual sloth was just sprouting facial hair? We kind of feel sorry for the lawyer who took out a home equity loan to cover Trump's porn fling. Guy didn't even have $130K spare cash to cover the tab.

  12. Trump don't need no stinkin' experts! He's to authoritarian oligarchs' what narcissus is to handsome men. Besides, he already told us what he was going to do, which is "grab, grab, grab," and fix trade to bring back all the jobs make Mexico pay for the wall. He had economic policy all figured out. He didn't need Navarro or Gary Cohn past getting the biggest tax swindle passed through Congress.All that's left now is catch up to Putin and Xi Ping in establishing himself as dictator for life.



  13. NA,

    My state voted blue, as did those states in which Hillary Clinton regularly visited during the general election. She didn't visit nearly enough states or alleviate the anxieties of many millions of disgusted voters. Absentee campaigns don't work, especially not in a change election. Today, we see this, from Tim Kaine.

    I sure hope Democrats learned their lesson.


  14. @Rima Regas: Those many millions of disgusted workers are in much worse shape now than before the election of Donald Trump. I hope by now they’ve learned the lesson that change for the sake of change is not in their interest. I haven’t seen a presidential candidate in person in decades. I don’t need to in order to come to an informed decision. And that was never truer than in 2016.

  15. NA,

    You're in NYC. She didn't bother with many of the states whose electoral votes she needed in order to win. Maybe you don't need to see someone in order to make up your mind, but you can't generalize your needs to everyone else. Her speeches were aimed toward a profile of voter that matches your state and mine and not much else. Even Bill Clinton was begging her to campaign in the middle of the country.

  16. So Trump rules by his intuition,
    To advise him, back his volition,
    The Con backs the Can't
    And his untutored rant,
    Also to Nuclear Fission?

  17. Good column, but the comments are better written. Copy editors should have cut 20 cliches. Count them.

  18. I took your advice and counted. You’re wrong.

  19. The Trump administration's attempts to undermine the EU play right into Putin's hands. They aid and abet Russian attempts to weaken western democracy and NATO. The State Department has been weakened to the point where there is no one in this administration to mitigate against these attempts. I think Trump is guilty of treason in his tacit support of Putanism. Hopefully the midterm elections will result in a congress that will hold this president criminally responsible.
    PS: Many states have a sales tax. This is the same as a VAT. There is a level playing field supported by many international trade deals, including NAFTA

  20. “…U.S. products sold in Europe have to pay VAT — for example, they must pay a 19 percent tax if sold in Germany…”

    …which is not a sales tax, it is on the “value added” only.

    For example, if the sales price is $20,000 and the cost of materials purchased is $15,000, the value added is $5,000 and the tax is $5,000 time 19% = $950 (not $20,000 times 19% = $3,800)

    Furthermore, the American producer can deduct the VAT from US income taxes due. Suppose labor, depreciation, etc. are an additional $1,000, then profit before taxes would be $20,000 - $15,000 - $1,000 = $4,000. US income taxes (which can be deferred indefinitely) at the old 35% rate would be $4,000 times 35% = $1,400. The taxes paid abroad can be deducted so that the US tax liability would be $1,400 - $950 = $450.

    In either case, the net profit to the American manufacturer is the same:…

    Sell in Europe: $20,000 - $15,000 - $950 - $1,000 - $450 = $2,600.
    Sell in US: $20,000 - $15,000 - $1,000 - $1,400 = $2,600

  21. The word that best describes this administration's grip on America is indeed sycophancy. Just look at the "Nunes Report" just released by the House that says not only was there no collusion but also, the Russians weren't involved specifically to help Trump. How can those folks hold their heads high when they walk the streets in this country? How can they parent their own children? The refusal to do one's job and instead, the willingness to suck up at all costs - this is just shocking.

  22. They are surrounded by like thinkers or should I say, like non-thinkers.

  23. He ran on the idea that "only I can fix all the horrible things that are wrong in America". Horrible things that only he could see.
    But enough voters bought the idea; and it seems the entire republican/fascist party has also bought the con.
    We the People had better get busy.

  24. The GOP sold their souls to the corporate devils a long time ago. No surprise that Trump's lackeys have lunatic fringe ideas at all. Anything to keep the bread and circuses rolling while they destroy our democracy.

  25. Does it really surprise anybody that Jared Kushner found Trump's go-to economic advisor via an internet search? After all, this the same White House that gave jobs to Omarosa, the Mooch and Betsy DeVos.

    We should probably consider ourselves lucky. Trump could have just as easily Googled "best lawyer in the U.S." and made the first name that came up in the search list our Attorney General. Or maybe he could have searched "Best spy in America" and made him head of the CIA.

    That's probably also how Trump decided on Scott Pruitt for EPA--he Googled "Guy Who Hates the Environment the Most in the U.S" and then gave him the job.

  26. And then there's Ben Carson at HUD . . .

  27. You're assuming that T knows what the internet is and/or how to use it.

  28. LOL and you are right!

  29. The idea of 'confirmation bias' is now officially quaint.

    With Navarro stating that his function "as an economist is to try to provide the underlying analytics that confirm his intuition. And his intuition is always right in these matters," we have taken a step beyond mere 'yes-men' sycophancy.

    What do we call this now? 'Bias' is just too weak a word.

    Maybe 'Confirmation Enforcement.'

  30. All associated with this shameless pathological liar, serial bankrupt, cheat, and scam artist, can only be disgraced. Trump's presidency will be remembered as the historical low point of the American presidency. What is really scary is that Trump believes the voices in his own head. They tell him he is the best ever, he won by a landslide, he is making America great again. He keeps sycophants around him because they reflect back what he believes. In contrast, every critic is an enemy (by extension, of Trump's America also). The media (other than Fox News and the extreme right-wing hate sites he tweets from time to time) are "fake news." So all around Trump are distorting mirrors in the make-believe world of this fake president. He has converted the Oval Office into a reality TV show accompanied by an incoherent, hate-filled Twitter stream. Navarro, Mnuchin, Ross, De Vos, Carson are all extras. Kelly and McMaster enable the show. Ryan and McConnell and the GOP they represent, funded by a few extraordinarily greedy billionaires, gave America this spectacle.

  31. "a lower level will be set. This has been the case consistently since Eisenhower, excepting Bush Sr."

    Likely true since tRump has shown them how to win in the primaries. And here I thought that Bush Jr. was the all time low!

  32. Anyone who doth protesteth as much as Trump and needs to surround himself with slavering yesmen and women doesn't actually believe what he says about himself, or he wouldn't need the constant reassurance.

  33. As Seinfeld character George Costanza said, "it's not a lie if you believe it"

  34. So what's new? We already have Comey who said dear leader wanted loyalty from the FBI. He who tweets makes snide, insulting comments about anyone who does not kiss his gluteus maximus.

    We see a whole White House full full of the faithful bending down to his derriere. We have Sara Slanders, and Kellyanne Coward channeling Joseph Goebbels, it is the congregation from hell, all trying to outdo each other to see who has the brownest nose.

    None of us that I know of, have ever seen in our lifetimes, such a collection of hominids with a yellow streak on their backs. Day after day we are confronted with a litany of misdeeds that would make a Mafia Don envious. It is not just sycophancy it is moral cowardice. And, as we see, it is aided and abetted by the Grand Old Perverts for whom the collection plate is more important than the decency and honesty of the country.

    A pox upon them I cry, let them be damned to rot in the inferno, their souls are already rotten, and that includes you, you fundamentalist preachers, and your self righteous flocks, you are beneath contempt, there are no words strong enough the describe your complicity.

    When history is written, your names will go down in infamy, rotten to the core.

  35. I did not realize I had so many readers, thank you for your kind comments, it gave me a big smile to read them this morning.

  36. Brilliant.

  37. "It is not just sycophancy it is moral cowardice."
    I don't know. I suspect that they they feel they are being morally courageous -- doing whatever it takes to defend the new order presided over by the orange king, whether that be lies, equivocations, or rolling on the floor and speaking in tongues. When I listen to Sister Kellyanne and Sister Sarah, they appear to be on a mission they believe in. I think that's what I find most disturbing.

  38. Access to power is however remarkably attractive, the question then is how to make standing on principle increasingly important.

  39. Standing on principle is much easier for mentally unathletic people if the principle is lowered. Two inches above the floor, perhaps; I don't want to add to the current administration's strain level.

  40. Amplifying the comment on import VAT — US firms can simply register in the EU country where they sell and get the VAT back. Well advised US companies either set up an EU subsidiary which allows them to get their VAT back, or they negotiate trade terms that require the local buyer to be the importer of record. It’s pretty simple for any tax professional to plan around so that the US company doesn’t end up paying a penalty.

  41. David J: This is not true, unless the subsidiary's activity is re-exporting those goods out of EU. Everything sold inside the union is subject to VAT.

  42. In applying a VAT, only the final consumer of the good or service pays the tax. Every company selling to consumers there gets it back - easily.

  43. Interesting--this seems an important point!

  44. He hates them for their freedom.

  45. The title inspired me to rewrite the song from Mel Brooks the Producers. I hope this is allowed.

    The GOP was having trouble
    What a sad, sad story
    Needed a new leader to restore
    Its former glory
    Where, oh, where was he?
    Where could that man be?
    We looked around and then we found
    The man for you and me
    And now it's...
    Springtime for Sycophants and the GOP
    Wall Street is happy and gay!
    We're marching to a faster pace
    Look out, here comes the master race!
    Springtime for Sycophants and the GOP
    America's a fine land once more!
    Springtime for Sycophants and the GOP
    Watch out, Europe
    We're going on tour!
    Springtime for Sycophants and the GOP......

  46. This reminds me of a college course I took on the economics of public decision making. We were given an issue and told to write an analysis and provide a recommendation. I asked the teaching assistant where to get the data needed to perform the analysis- and was told to first decide on the recommendation, then make up data justifying that recommendation. I dropped the course.

    It’s also reminiscent of the old accountant joke: Q: “How much is 2+2? A: “How much would you like it to be?”

    We’re seeing a complete disregard for reality in the Trump administration. Sooner or later, it will hurt not only the Trump Administration, but our whole country - and perhaps the world. When that day comes, Trump will undoubtedly step up - and blame Hillary’s e-mails...

  47. It has already hurt our whole country and the world.

  48. @John--It's okay to favor an idea. It's okay to support the idea by leaning on data that agrees with the idea as long as all data are laid out and considered. It's never okay to "make up" anything. The teaching assistant ought to have been fired.

    Actually, my worry is not the "how much would you like it to be" answer. Little in life is as simple and exact as the answer to 2 + 2. It's the "we don't even care, we're just going to do and say whatever we want and call everyone who doesn't agree with us a liar" answer that I find both troubling and prevalent now.

  49. Sooner or later, it will hurt not only the Trump Administration, but our whole country - and perhaps the world.
    It already has.

  50. Dr. Krugman won his Nobel Prize for his understanding of international trade, "The Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic activity."

    It is fair to assume he knows this stuff.

    However, he writes here about "average tariff" in the EU. The EU does indulge in targeted tariffs to promote specific industries, as part of its acknowledged larger industrial policy to shape industry and the development of specific industries in the EU. The EU goes so far as to allocate production inside an industry, and for example to close some of one nation's shipyards. That is part of how they run the place.

    So we also need to ask if the EU is harming any specific American industries with specific tariffs that target them. We know they do that in agricultural products, a heavily protected industry in the EU. Which others?

  51. Actually no. The Nobel Prize is awarded for past work, include work past its expiration date. It is also a highly politicized award, see: Mr. Obama's Nobel Peace Prize.

    Unless you're willing to say that past is invariably prolog, award can ruin a man by inflating his ego and rewarding him to run in place, so as not to risk being wrong.
    Finally, the world and its wiring has changed considerably since Dr. Krugman took home his honors. Another winner of the Nobel peace prize is Dr. Kissinger. Do you think his approach to "Realpolitik" is as humane or "real" as when he first peddled it.

  52. This is what bothers me: people like robert sawyer who are casting doubt on expertise itself. Experts in any field, who have graduated, or have awards for achievement, should be suspect. Even though all your vaunted republican leaders went to prestigious universities.

    So robert, you'll not seek a physician's help for your surgery, or a dentist. You'll just ask your neighbor; explain that you saw a diploma on the doctor's wall, and now you can't trust him. And the more diplomas, the more danger!? I'm guessing it's only liberal 'elitist' learned folk who will never earn robert's trust.

    Oh, and award of the presidency can, and has, ruined the current officeholder by inflating his ego and rewarding him to 'run in place' (you're fired!!) so as not to risk being criticized.


  53. Exactly. We have far too many people who know little to nothing about various fields of study and other individuals' attainment of expertise deciding that this same learning and expertise is suspect. When and how did becoming learned and being intelligent become a negative character trait and why did we surrender this definition to those who are so clearly ignorant about so many things?

  54. Protest, punch, and punishment are the legs of every Trump policy, from immigration to tariffs. Tax cuts come in for praise and pride since they are going permanently to the rich. A mature can take a beating. New plants take years to build, healthcare is lost one family at a time, retail jobs are expanding, the depression is finally over, thanks to Obama and Yellen. They steadily brought the economy back without shocks. Trump is a pinch runner entering the game on third, who thinks he won the game when he advances home on somebody's base hit!

    Political economies have narratives; the old school demand has been abandoned: check your work, test your answers. Learning the formulas fails this White House. It takes inverse relationships and makes them linear. Inverse relationships tells us raising prices reduces demand. Ultimately, higher prices eliminate jobs. But not today! Only the stock market feels his folly in real time. Trump kills growth and sales and calls it a win!

  55. "mature economy" (above).

  56. Well, that was entertaining.

    I would have thought that an extended “Springtime for sycophants” would have been timestamped by Jan. 26, 1998, when President Bill Clinton ended a televised speech by stating “I did not have sexual relations with that woman … Miss Lewinsky”; July 28, 1998, when Clinton launched missiles against al-Qaeda bases in Khost, Afghanistan and the Al-Shifa pharmaceutical factory in Khartoum, Sudan, while many here (and in other countries) believed that he did so to distract from his Lewinsky woes – bombing enemies is very presidential, even if in this instance it was reminiscent of “Wag the Dog”; and Aug. 17, 1998, when Clinton gave his famous “It depends on what the meaning of the word 'is' is” response to a grand jury.

    Or perhaps it could have been the famous explanation by the Obama administration, just as we were getting set to vote for or against his re-election in Nov. of 2012, that the Benghazi tragedy was caused by a poorly imagined Islamic religious satire in video form that had inflamed Muslims, instead of the truth that it was by terrorists doing what terrorists do, but that we had failed to anticipate it on the anniversary of 9/11, despite warnings by people on the ground.

    Who were the “shameless sycophants”? Why, the Democratic establishment, of course, that was willing to accept any statement or act by a Democratic president no matter how outrageous that exculpated him or his administration from unacceptable behavior or incompetence.

  57. Kevin, such vitriol - have you no compassion? If someone has had their right hemisphere removed (effectively removed at least, if not physically) I think treatment, rather than scorn, is the appropriate response!

    Check out the extensive well replicated research on conservative vs liberal brains (of course Richard insists he's not a conservative - yes, and I grew up in Shanghai and speak 18 languages fluently, but as we were saying). One particularly relevant finding is much lower activity in the anterior cingulate cortex - which translates into difficulties empathizing with those who are substantially different from you.

    Richard will say that is the case with everyone who criticizes him - did I mention that paranoia is also one of the frequent findings in regard to the conservative personality?

    There is a cure though, for conservative personality disorder. There is signifiant research suggesting that regular practice of mindfulness (not just in formal sitting but throughout the day) increases activity in the ACC.

    So there you go, Kevin - that's the start of a good treatment protocol. Now, how do we implement it?

  58. Let's say that I agree that your examples of democratic apologies for Clinton re Lewinsky and Obama re Benghazi are clear examples of shameless sycophantism (I don't, but let's pretend). Does this mean that you would apologize for any and all outrageous, inept, unproductive, ill-conceived, counter-productive, or self-serving behavior of any Republican President because he or she serves "your team"? If that's where you are at, by definition it would mean that you have no political values or commitments, only loyalty. That sounds like a sycophant to me.

  59. You are so stuck in the past and refuse to see what your great leader is up to these days. Reminds me of little boys always arguing : Johnny did it too, only worse. Wake up and dare open your eyes to trump and Co. . Stop living in the past .... even though it’s tempting to do that with the miserable presidency we are all living through now.

  60. So now that Steve Bannon is gone whose job is it to provide statistics on race and religion that confirm our great white hope's prejudices (e.g., all undocumented Mexican immigrants are rapists, 80% of violent crimes that target white Americans are committed by blacks, Muslims from Iran- but not from Saudi Arabia- are likely to be terrorists)? I guess that job now belongs to Steve Miller. Or is it John Kelly? Mercifully, there's no greater shortage of bigots in this administration than there are faux economists.

  61. Peter Novarro is an economic crank and screwball; a perfect playmate for Daycare Donnie and the Party of "I'm With Stupid"

    According to Politico, Navarro's economic theories are "considered fringe" by his fellow economists.

    Al-Jazeera says "few other economists have endorsed Navarro's ideas."

    A New Yorker reporter described Navarro's views on trade and China as so radical "that, even with his assistance, I was unable to find another economist who fully agrees with them."

    The Economist described Navarro as having "oddball views".

    George Mason University economist Tyler Cowen disagreed with his views on trade, which he claimed go "against a strong professional consensus."

    University of Michigan economist Justin Wolfers described Navarro's views as "far outside the mainstream," noting that "he endorses few of the key tenets of" the economics profession.

    Lee Branstetter, economics professor at Carnegie Mellon and a trade expert, said Navarro "was never a part of the group of economists who ever studied the global free-trade system ...he doesn't publish in journals. What he's writing and saying right now has nothing to do with what he got his Harvard PhD in ... he doesn't do research that would meet the scientific standards of that community."

    Marcus Noland, a Peterson Institute economist, described a tax and trade paper written by Navarro and Wilbur Ross for Trump as "a complete misunderstanding of international trade, on their part."

    "Hire that screwball !": TRUMP 2018

  62. @Thomas Zaslavsky: Oh, I don’t know. The quotes seem fairly damaging to me. Would you hire someone who doesn’t do research that meets professional standards?

  63. @NA: I would not, but "oddball" doesn't mean "not meeting professional standards". One should distinguish criticism that points to deficiencies from criticism that merely points to differences. Please note that I'm not defending Navarro. I'm only pointing out that certain comments quoted by Socrates are not, all by themselves, ipso facto criticisms.

  64. OK, Socrates, best line of the day: Donnie Daycare and the party of "I'm with Stupid"!!

  65. Sycophancy? Just wait until next week when the Fake President appoints Larry Kudlow his Chief Economic Adviser. So what if the guy has no economics degree; he's done a great job of impersonating an economist for years on cable TV, while promoting upper-end tax cuts on behalf of the billionaires who fund Republican politicians. Since they're only there for show, Trump might better hire professional wrestlers to fill these cabinet positions.

  66. He already has! Trump’s head of the Small Business Admin, Linda McMahon, was prez of the WOrld Wide Wrestling Assoc, if you can believe it ...

  67. While I agree broadly with this article, it is a little disingenuous not to recognize how hard it is to speak truth to power in any organization. Think about your workplace. Do people challenge power? How much harder, then, when the workplace is the White House!

    Do we really think that Barack Obama's White House, or Bill Clinton's, were filled with robust debate? That their advisers challenged and debated them? Undoubtedly that took place more then than now (or than during the White House of Incurious George), but the issue is one of the magnitude of the problem, not its existence.

    In all U.S. history, only one President had a team of advisers who debated him at every turn: Josiah Bartlett.

  68. Aside from the Bartlett jest, Lincoln had such a team in his Cabinet and I believe Washington had a high degree of debate in his as well.

  69. Obama would set up his advisors by having Biden expound the opposite of Obama’s view and pretend it was Obama’s view. This guaranteed differing viewpoints in the subsequent discussions. Your guess about the lack of multiple viewpoints in the Obama WH is just wrong.

  70. Obama recognized his limitations in certain subjects, economics being one. You can be sure he listened very carefully to economic advice from multiple sources, read widely and thought at length before making decisions. To say the problem was only one of degree as between the Obama White House and the current one is disingenuous.

  71. The debasing of our institutions, from our government to our national discourse to our social norms, and our international relations that Trump and his GOP are causing serves to divide us from ourselves and our long standing allies. Both of those results weaken our country.

    Of course one country and it's leader benefit directly from those efforts.

    Vladimir Putin must be astounded at the return on investment he is reaping from helping Trump to steal the presidency, and who could blame him for being so? The eagerness with which the flag lapel pin wearing Republicans rejected defending their country and embraced covering up Putin's attack on it must have shocked him beyond belief.

    Enough already of beating around the bush. It is past time for the Democrats and the press to start calling out, in plain language, the Trump GOP for it's campaign of sedition and collaboration with a foreign foe in that foes attack on this country.

  72. @ tombo. Asking Republicans to use the word treason is like asking them to stop giving the taxpayers’ money to the rich while cutting everybody else’s healthcare. Treason or theft, it’s all the same to Republicans. They don’t care a whit about the country or its ordinary citizens. They care about their own power, and especially their own pockets, more than anything. By the way, in the modern era that’s nothing new.

  73. My thoughts on the Grand Old Putinistas are simple. I wouldn`t be so low as to use the lock em up phrase, I would follow the early democrats and say get out and don`t come back.

  74. Plucked from academic obscurity, pulled in close to the campfire from the frigid fringes, Peter Navarro will say whatever he believes his patron and benefactor wants to hear. He has seen what happens to those in the administration who do otherwise. Trump needs constant confirmation and Navarro will give it to him; daily if necessary.

  75. I bet bone spurs also kept him out of Vietnam. Who knew it was a contagious disease.

  76. In regard to the operation of a VAT, I noticed the same lack of understanding with a CNN host Erin Burnett. Someone she was interviewing mentioned the application of tax on imports to mexico. She displayed no understanding of what sort of tax was being applied and that this was not a tax on imports but a universal sales tax that would be paid by the final consumer.

    VATs are not discriminatory when it comes to imports. If trump's trade/tariff adviser doesn't understand this thenthe US is in big trouble. That Trump doesn't understand it is not surprising.

  77. VATs in Europe are greater than sales taxes in the US, so American imports are helping to shoulder significantly more of the tax burden relative to that shouldered by European firms in the US. So, in my humble opinion (and I hate to admit it), I agree with Peter Navarro's bottom line.

  78. Frank,
    Would you mind reading your own post again.
    I am sorry to point out that it doesn't make any sense.

  79. If we rely more on the income tax rather than sales or VAT taxes, the domestic industries pay more.

  80. “…U.S. products sold in Europe have to pay VAT — for example, they must pay a 19 percent tax if sold in Germany…”

    …which is not a sales tax, it is on the “value added” only.

    For example, if the sales price is $20,000 and the cost of materials purchased is $15,000, the value added is $5,000 and the tax is $5,000 time 19% = $950 (not $20,000 times 19% = $3,800)

    Furthermore, the American producer can deduct the VAT from US income taxes due. Suppose labor, depreciation, etc. are an additional $1,000, then profit before taxes would be $20,000 - $15,000 - $1,000 = $4,000. US income taxes (which can be deferred indefinitely) at the old 35% rate would be $4,000 times 35% = $1,400. The taxes paid abroad can be deducted so that the US tax liability would be $1,400 - $950 = $450.

    In either case, the net profit to the American manufacturer is the same:…

    Europe: $20,000 - $15,000 - $950 - $1,000 - $450 = $2,600.
    US: $20,000 - $15,000 - $1,000 - $1,400 = $2,600

  81. I find Peter Navarro’s obsequiousness towards Trump to surpass even that of the individual Cabinet members and Vice President Pence during their televised Oval Office meeting of last year.

    Navarro is a relatively fresh face on the Trump TV reality show. He’s a lapsed Democrat with often widely divergent economic opinions from other more highly known and respected economists. Even so, he comports to Trump’s tariffs policy. He can stay for now.

  82. So sweet are the songs of my own mind, intoxicating, enrapturing, mesmerizing.

    When I stand before my (carefully selected) adoring masses, they are so moved by my presence, they scream their affirmations.

    When I retreat to my inner sanctums, my genius is reflected back to me by my most trusted aides, the TV screen and the friends I call in the night.

    The world has never seen such brilliance, such male potency, such love for my... my... OK, myself.

    The Adoration of the Trump is not really about Trump, it is about us, or at least about 39% of us, who crave an authority figure to become complete. Actually, its more like about 30% because there is a group of wealthy opportunists who would support anyone, even Trump, who enhanced their accumulation of material wealth.

    This is dangerous stuff if you know the history of Germany in the 1930s.

  83. There's also the religious right, who value character, but only in politicians of the left. Which sounds awfully like hypocrisy, but apparently isn't. So maybe 20% of the population are hardcore adorers.

  84. That thought plagues me constantly: This is how right-minded people must have felt in Europe in the 1930s, wondering how so many of the people around them seemed to have gone mad.

  85. Does it not seem that Canada (which is exempt from the tariff),a major steel producer will send all their steel to the US where the price of steel is 25% higher. Then they can import steel from China with no Tariff for their domestic needs, thus flooding the US with more steel. Also an engine maker in Windsor, Canada will produce engine blocks with a material cost 25% lower than a shop in Detroit(ten miles away). Every way I look at this, this tariff will be a drain on our economy.

  86. With Republican majorities in all three branches of the government, there is little hope of any change that will benefit the common man. The plutocrats, under the guise of conservatism, are in full control, and they will continue to enrich themselves as long as they can.

    It is up to the public to take back the governance of the country from the plutocrats. In the last general election, 63 percent of the eligible voters stayed home and did not vote. That is not the way to run a representative democracy.

  87. Sure a VAT tax tilts the playing field. How can you say it does not? A 19% German VAT can be used to pay for employee healthcare, retirement, and other benefits. GM needs to charge more for a vehicle to cover those costs, whether that car is sold in Germany or not, AND then a 19% VAT is applied (contributing to Germany's social safety net just like a German company does). When Germany exports a car to the US, Germany collects no VAT, and neither does the US. That puts GM at a disadvantage, it is stuck paying worker benefits while the German company/ economy accomplishes that w/ a VAT.
    Clearly this is how Germany maintains a high wage mercantile economy. In the US, a company can outsource the production of underwear to India for 50 cents a pair, and save the expense of employee benefits while selling back home for $5/ pair. In Germany, the savings in benefits is still collected on the foreign made goods- 19% of the sale price. I disagree with Trumps tariffs, at the same time, to make our manufacturing competitive we should implement a VAT as well as socialized / single payer healthcare (funded by the VAT).

  88. Precisely! I am conservative-leaning Canadian, and have lived and run businesses in the US and Canada. In Canada payroll burden on employers is far less than the US, almost entirely due to health care. We also have a Federal VAT, called the GST. The fact that the US business class supports employer-paid healthcare floors me. It works entirely against their interest! It also runs against the interest of the insured population, as it is a system geared to generate profit for insurance companies, with the result that health care becomes radically more expensive than in the rest of the world.

    Blaming other countries for discriminatory VAT is laughable. The US simply needs to rethink their tax and medical insurance systems. Medical outcomes for the population will go up, costs will go down, and US business will be internationally more competitive. The start of a virtuous cycle. Why is this not self evident? Why is this branded as a liberal/socialist position? It is simply a better idea.

  89. Vat is paid by the consumer the consumer gets the benifits of the vat. The american consumer does not pay vat and gets no benefit. It doesnt matter who is selling the product, vat is a sales tax. If you dont want to pay it then dont sell stuff, give it away.

  90. “…U.S. products sold in Europe have to pay VAT — for example, they must pay a 19 percent tax if sold in Germany…”

    …which is not a sales tax, it is on the “value added” only.

    For example, if the sales price is $20,000 and the cost of materials purchased is $15,000, the value added is $5,000 and the tax is $5,000 time 19% = $950 (not $20,000 times 19% = $3,800)

    Furthermore, the American producer can deduct the VAT from US income taxes due. Suppose labor, depreciation, etc. are an additional $1,000, then profit before taxes would be $20,000 - $15,000 - $1,000 = $4,000. US income taxes (which can be deferred indefinitely) at the old 35% rate would be $4,000 times 35% = $1,400. The taxes paid abroad can be deducted so that the US tax liability would be $1,400 - $950 = $450.

    In either case, the net profit to the American manufacturer is the same:…

    Sold in Europe: $20,000 - $15,000 - $950 - $1,000 - $450 = $2,600.
    Sold in the US: $20,000 - $15,000 - $1,000 - $1,400 = $2,600

  91. Everyone see the deficit figure released today and the estimates for this year and into the foreseeable future?

    Relative sycophants aside, intuition isn't going to change those are they, Mr. Luettgen?

    Didn't think so.

  92. Wasn't this a profile of Peter Navarro? Or Paul Ryan? Gee; I couldn't the names straight--but all the stuff fits--sycophancy; "policy wonk;" squaring one's "research" and preconceived notions to fit squarely another's "intuition?" What if the "intuition" is all wrong? And Navarro/Ryan's protectionism from phantom European designs on turning over the American economy. Oh, I forgot; that's already happening.

  93. It sometimes seems that Republicans tend define truth as what the boss says, and Democrats tend to define truth as science.

  94. So what do American companies selling into the European market have to say? Do they feel they are disadvantaged by having to add the VAT to their products? This is really the first time I have heard this argument about the VAT as a discriminatory trade tactic. Since no one here wants to pay income taxes, maybe we should have a 19 per cent VAT too.

  95. “…U.S. products sold in Europe have to pay VAT — for example, they must pay a 19 percent tax if sold in Germany…”

    …which is not a sales tax, it is on the “value added” only.

    For example, if the US sales price of a car is $20,000 and the cost of materials purchased is $15,000, the value added is $5,000 and the tax is $5,000 time 19% = $950 (not $20,000 times 19% = $3,800)

    Furthermore, the American producer can deduct the VAT from US income taxes due. Suppose labor, depreciation, etc. are an additional $1,000, then profit before taxes would be $20,000 - $15,000 - $1,000 = $4,000. US income taxes (which can be deferred indefinitely) at the old 35% rate would be $4,000 times 35% = $1,400. The taxes paid abroad can be deducted so that the US tax liability would be $1,400 - $950 = $450.

    In either case, the net profit to the American manufacturer is the same:…

    Sold in Europe: $20,000 - $15,000 - $950 - $1,000 - $450 = $2,600.
    Sold in the US: $20,000 - $15,000 - $1,000 - $1,400 = $2,600

  96. Peter Navarro was a professor of mine while I was getting an MBA at UC Irvine. He was stridently anti-China 20 years ago and sees trade as a ‘zero sum game’. I did learn a lot, from him, about how special interests have undue influence on Congress. Professor Navarro has always wanted to be in politics (he ran for San Diego Mayor and congressman and lost both times) so it doesn’t surprise me he would jump at the chance to inject his ideas into Trump. He is NOT a mainstream economist...

  97. There is another class of people in Washington, those who have their own agenda and are willing to take Trump's abuse to further that agenda. The prime example is, of course, Jeff Sessions.

  98. Trump's disdain for Europe, which goes well beyond trade policy, is consistent with his personality and worldview. It is the other side of his admiration for dictators and strongmen like Putin, Duterte, and Xi Jinping. Although not perfect, the EU represents the best of what the world has to offer in terms of Democracy, clean representative government, and just society and social welfare; while being quite good at capitalism/business/innovation. He sees in Europe everything he knows he can never be and does not want to be; peaceful, helpful, just, and fair. In a way the idea of Europe/EU is the biggest threat to the idea of Trumpism.

  99. Trade question about Navarro white paper: I see the shameful asymmetry of decrying US exporters having to pay a VAT to sell into Euro country X while ignorantly/willfully omitting the fact that a Euro competitor selling into X has to pay the same VAT; but what about Navarro's claim that the US exporter "still has to pay U.S. corporate income tax." Is that true? I thought they got some kind of rebate or deduction. Can you explain further the symmetry including how home countries (Euro and US) tax (or not) sales from exports? Thanks for the IMMENSE public service and intellectual leadership you provide our national community.

  100. If my child had an economics professor who espoused the ideas that Navarro is espousing, I would call the school’s dean to have a chat. So, maybe Navarro is doing less damage in the White House - after all, Trump’s going to push these policies anyway.

  101. Our economy is based on consumption. No wonder that cheap stuff from China is so popular. Levying 15% VAT would tamp the appetite for the stuff and probably improve the trade imbalance.

    It would be interesting to compare developed countries by the correlation between consumption and savings rates on the one hand, and trade deficits on the other.

  102. VAT is sales tax. A 15% national VAT in the US would increase the peice of all goods, so cheaper imports from China would still be cheaper.

  103. “…The recent tax cut will add more than $1 trillion to U.S. fiscal deficits over the next decade, putting upward pressure on interest rates and the U.S. dollar…will soon lead to a rising dollar, putting continued upward pressure on the trade deficit,..”

  104. Jon G,
    That is correct in general. However, by reducing consumption American consumer would have less money to buy third flat screen that is produced only abroad, or a third RC toy for kids that is also produced only abroad. Alternatively, saving for the future would also become more attractive.

  105. Great work Paul, very apt and informative as always. Can I take this opportunity to give you my questions regarding "free trade"?

    To what extent is it true that recent trade agreements have been less about reducing or eliminating tariffs and more about undercutting the ability of democratic governments to legislate for higher environmental, worker and consumer protection standards in the future?

    Is it true that Barack Obama's TPP (with the US in it) sought - conversely - to increase or standardise the environmental, worker and consumer protection standards of the signatory countries of it?

    I really feel for progressive Americans and the US in general for having such a leader as Trump forced upon you and it. His "intuition is always": wrong. He's an appalling representative of the US, democracy and humanity.

  106. "for having such a leader as Trump forced upon you ..."
    OH no, we did this to ourselves. Ignorant is fixable, STUPID IS FOREVER.

  107. Trump was elected because a huge proportion of poor Americans felt abandoned by the Democrats, who had typically argued for medical care and jobs for the poor.

    In all likelihood, if Bernie Sanders had won the nomination, he would have won the election against Trump.

    Sanders was pushing for universal health care, but not Clinton. Moreover, Clinton emphasized feminism too much, by supporting Gloria Allred's attempts to replace due process with public shaming in bringing down powerful patriarchs.

    But Trump has abandoned the poor just like liberals. There is no replacement for Obamacare. An infrastructure program that would give jobs to poor men has been talked about, nothing more.

    And now he introduces tariffs, which are more likely to stimulate inflation than jobs.

    Trump has forgotten his basic message. The US needs to control population growth so that it can afford universal health care. It needs to avoid the Malthusian destruction that afflicts states like California.

    Resources on planet earth are finite. We need to learn to live within those resources. The US population has grown by 85 million during the last 30 years. We need

    1. A complete stop to illegal immigration.

    2. A one-child policy, particularly for those on welfare.

    3. An attempt to integrate the US prison population, the largest in the world, back into our society.

    Charity begins at home. Liberals have neglected America's own poor to come to the aid of foreign refugees.

    Americans want a change.

  108. "An attempt to integrate the US prison population, the largest in the world, back into our society...."
    It is almost complete as most of them NOW work in the TRUMP ADMINISTRATION. CRIME PAYS, don't you know?
    The rest of your spiel sounds like a trump talk. Thanks, but NO thanks.

  109. I, too, believe in declining population rates as a way to relieve the burden being placed upon the planet, especially in light of modern lifestyles, and believe that it should be one of our highest priorities.
    Nevertheless, if the US wants universal health care, a declining pregnancy rate and limits on illegal immigration that you suggest will make it markedly harder to achieve, because the older segments of the population incurs a much greater proportion of health costs than the younger segments, and one-child policies would exacerbate the aging of the US population, which would leave progressively fewer younger, employed individuals with lower healthcare costs to pay into a pool to help cover the elderly. Also, illegal immigrants tend to pay much more in social services through taxes (many of them actually pay taxes and even file returns, while not qualifying for most domestic healthcare benefits) than they use, and their being disproportionately young increases this contributory skew.
    The only way to rectify this negative skew from your recommendations would be to substantially raise standard retirement ages, which I think would be a good idea, but not reasonable for everyone, such as those in many manual labor jobs or with poorer health as they age. Limiting healthcare for the elderly relative to current levels could also make healthcare more affordable for everyone, but that may be politically unfeasible.
    Your intentions are good, but your tactics are flawed.

  110. Trump was elected by middle-class WHITE Americans because he played to their racism, misogyny and nationalism, pure and simple.

  111. He can’t even spell, for crying out loud. The situation is hopeless until Americans can vote into office a qualified and competent president, who in turn will appointment qualified and competent cabinet members, advisors and aides.

  112. 'Springtime for Sycophants' gave me a hearty belly laugh when I really needed one. Thanks Prof. K. This does feel like "The Producers" version of a presidency.

    Most of Trumps' "advisers" (and I use the term loosely), are unqualified for almost every facet of their jobs, with the exception of sucking up to the boss. That Jared plucked Navarro out of relative obscurity after haphazardly coming across his book on the internet is just too emblematic of the color blind, paint by numbers culture of this administration. Most of us have worked with people who were spectacularly unqualified for their jobs. They have typically kissed a lot of derrieres to get the job, and that rarely stops once they get it, especially once it turns out to be their most significant ability.

    Given the way Trump runs his companies, I'm not at all surprised this is the way he runs his administration.

  113. But how soon can we bring the curtain down on this production?

    Do we have to sit through two more acts after "Springtime for Trump"?

  114. "But his trade ire seems increasingly focused on an unexpected target: the European Union..."

    There are several reasons for that. But, first, let's understand where Mr. Trump is coming from. Mr. Trump concept of a deal only involves win-lose situations and never win-win. And his ideal model for making deals is "The Walmart approach." Thus one should not be surprised that he wants to do to other countries what Walmart is doing to its Chinese suppliers.

    Walmart's negotiates with its suppliers one at the time, which allows it to use its enormous economic power to squeeze each supplier down to a razor-thin profit margin. In spite of that, the suppliers are eager to do business with Walmart, because of large volumes involved, which guarantees them long-term steady revenue streams.

    To adopt "The Walmart approach" to international trades, Mr. Trump needs to negotiate with each country separately. When countries get together and form a single market, typically their combined economic power becomes large enough to see themselves as counterparts to the US; that is to say they are no longer squeezable.

    In the case of the EU, the EU economic power is markedly larger than the US. That means Mr. Trump has to worry that, in trade negotiations with the EU, the tables could be turned on the US; in other words, it is the US that would be squeezed.

  115. That's not the only problem. Even the janitors in Brussels are smarter than Trump. And they can read, for example "The Art of the Deal."

  116. Trade is not a bilateral affair. It is not a wrestling match: I win, you lose.

    It is a multilateral affair where every country wins. Country A sells to country B, but country B does not buy from country A. Instead, country B buys from country C which does not buy from country B. Instead, country B buys from country A. With which country should country A negotiate B or C, or both?
    The best negotiator is comparative advantage. There is no need for expert negotiators. Simply remove all tariffs and quotas.

    “Fair” trade is almost always harmful to the middle class.

    A strong middle class is critical to national security.

  117. Keynes,
    Exactly! By extension pure free market economy is harmful for the middle class and US is a prime example. Unchecked Global capitalism, termed by conservatives "Globalism" so to not undermine the word "Capitalism", is killing midle class and the fault is squarely on our system. The root cause is that we do not redistribute the benefits of capitalism and let the capital holders get away with most of the profits.

  118. Krugman ignores a very critical point, which is that you have to tax something. Europeans pay for much of their generous healthcare systems, as well as government in general, with a VAT. In the US we have no VAT, so we must pay for government primarily with the individual income tax, which, as investment income in increasingly exempt, is basically a wage tax. Employer-paid health insurance is likewise paid, in effect, by a tax on wages. Hence, goods made in the US but sold in Europe are subject to both these wage taxes and the VAT. Goods made in Europe but sold in the US are subject to neither. (Of course, there is a wage tax in Europe, but it can be lower since is doesn't have to pay for healthcare.) There's no question that US refusal to enact a VAT makes US goods less competitive, so it's not entirely unreasonable for the US to demand in trade negotiations that something be done to compensate for this difference in tax systems. We probably won't get it, but only because we're outnumbered, not because we're theoretically wrong. The rule that VATs are legal but tariffs are not, which puts the US at a severe disadvantage, is entirely arbitrary.

  119. Dude, having lived in Europe for many years, I can tell you not only do they pay VAT, but they pay high income taxes as well. Those taxes support their socialist states and I for one, wish like heck I could live there again where I got excellent health care, high speed trains, public transportation, the arts, a balanced life style and crime rates the envy of most American cities. The US is in deep trouble with Trump and his sycophants.

  120. “Foreign-based” American corporations that sell goods and services in the US have been able to avoid paying over $1 trillion in US taxes by keeping their US earnings abroad waiting for a tax holiday.

    If those companies had been paying their US taxes the federal government would have been able to increase spending on infrastructure, on retraining displaced workers, and on other services, for example. That would have created direct and indirect jobs that would have offset some of the job losses from trade and automation.

    Also, the dollar would not have been as strong. We would have had less imports and more exports.

    “Foreign-based” American corporations should pay their US income taxes in full every quarter, just like their US based competitors do.

  121. Larry,
    They pay higher taxes that we do, in addition to VAT!
    However, they do set the economy the way that is beneficial to them, not US. Negotiation based on "why don't you run economy as we " would be just silly. The fault is squerely on us and on our obsession with low taxes, and on our obsession with small government. Most advanced countries are way smarter than our knucklehead thinking.

  122. More from the Peter Novarro fan club:

    James McGregor, former chairman of the American Chamber of Commerce in China, said that Navarro's books and documentary on China "have close to zero credibility with people who know the country," and are filled with "hyperbole, inaccuracies" and a "cartoonish caricature of China."

    Boston University economist Laurence Kotlikoff described Navarro's accusation of Germany as a currency manipulator as "#stupideconomics"

    Navarro said that the USA has "already begun to lose control of [its] food supply chain", which according to NPR, "sounded pretty off-the-wall to a number of economists" who noted that the US is a massive exporter of food.

    Navarro is a proponent of the notion that trade deficits are bad in and of themselves, a view widely rejected by trade experts and economists.

    Harvard economics professor Gregory Mankiw said Navarro's views on the trade deficit are based on the kind of mistakes that "even a freshman at the end of Econ 101 knows."

    Tufts University professor Daniel Drezner said of Navarro's WSJ trade op-ed, "as someone who's written on this topic I could not for the life of me understand his reasoning".

    Economist Tyler Cowen: "close to no one" in the economics profession agrees with Navarro's idea that a trade deficit is bad in and of itself.

    The Economist magazine described Navarro's views on the trade deficit as "dodgy economics" and "fantasy".


    "I'm With Crazy": TRUMP 2018

  123. Very helpful comment to me: I'm reading, or was reading, "Death by China," by Navarro, and I'm ignorant enough to believe what he writes. What do I know about China's trade policies?

  124. Thanks for today's laugh amongst the sadness of this ongoing Shakespearian tragedy.

  125. As an economics minor and math major at Illinois State U. in 1986, even I learned that trade wars are counter-productive, and protectionism drives inflation and hurts the economy. Raising prices hurts everyone, especially Americans. Econ 101 indeed!! Too bad the Trumpers won't see the price of trucks go up until after they vote for GOP in November. Industrial goods depending on a supply chain from Europe cannot switch contractors to US companies without breaking long-term contracts and being sued. US producers cannot possibly upgrade production quickly enough to meet demand. Prices will go up world-wide. The consumers here will end up paying for these tariffs! So stupid. Harvard PhD? I'll take my ISU Bachelor's any day. Harvard should take it back.

  126. International transactions are exempt from VAT in all EU countries. The Importer does not pay a VAT tax on the transaction paid to the exporter, nor do they pay VAT on the cost of transportation. The VAT is charged to the consumer by the Importer exactly the same way that a local manufacturer charges VAT to the consumer when they sell locally manufactured goods.

    This is precisely why the VAT is NOT considered an anti-competitive tax.

  127. "U.S. exports to the European Union enjoy an average tariff of just 3 percent," says the U.S. government's own guide to exporters.

    The assumption behind the statement above is that Trump reads anything. Only an optimist would believe that assumption.

  128. But what Prof Navarro claims about VATs relates to foreign currency manipulation of the exchange value of the dollar. Look at currency exchanges rather than the things currency use trades. Nineteen percent VAT on consumer goods in Euros is not the same as a 19 percent sales tax in American dollars.The Euro today at $1.20 on a US dollar and a German Deutsche Mark $1.6 on our dollar at 19 percent seems to produce different values. If the EU/Mark VATs on American dollars is more rather than equal, how is it fair trade? Nineteen percent of $1.60 and 19 percent of $1.00 equals what? And who benefits more?

  129. Also, Trump’s last campaign position “Let’s take their oil” may be another kind of trade model. As applied to our steel and aluminum exports, could he mean “Let’s take their international trading partners in steel and aluminum markets”? Economic “science” doesn’t seem to account for application cost/benefits of applied political and military science factors.

  130. phil: Who knows whether an exchange rate can be equal at a particular day when other trade numbers for different country’s markets influence the exchange. Although Crow isn’t on my regular menu, I’ll eat it here based on my projections from Prof. Marcuse’s table, from questionable suggested values beyond 2005 on the black market and private circulation for marks and ostmarks (http://www.history.ucsb.edu/faculty/marcuse/projects/currency.htm).
    I eat our crawdaddys any day, but I prefer oysters, catfish, gator tails, and shrimp, washed down with a cold one. In moderation.

  131. Phil: Fox reports that Trump just ousted Tillerson as Sec’t State to be replaced by CIA’s Pompeo. Darwinian economic factors involving military and political confiscatory as well as disruptive behavior affect trade exchange value, even when on paper the exchange rate indicates that the values are the same to both trading partners.
    I forgot to add crab to my menu with the crawdaddys. How could the folks from Elton let me forget?

  132. Jared picked Trump's economic advisor by scrolling through Amazon to find someone who supports protectionist trade views. Did Jared bother to buy the book and read it, or do we have an economic advisor based on blurbs and reader's 4 star reviews? Remember, this is an administration who hired a wedding planner to be a major advisor for housing and urban development.

  133. "Did Jared bother to buy the book and read it, or do we have an economic advisor based on blurbs and reader's 4 star reviews?"

    The Vanity Fair article doesn't say, but Kushner isn't quite as simple-minded as that:

    'Responding to criticism [of a speech written by Kushner] from the boss (“Jared, this is terrible!”), Kushner said, according to a person familiar with the episode, “I’m not a [expletive] speechwriter. I am a real-estate guy.”'

    NB: Quote modified to mollify the Times's censors.

  134. Peter Navarro sounds as full of himself as Trump is of himself, and everyone knows what Trump's completely full of. Just to give an idea of how out of touch Trump's instincts are, recall the pre-election WSJ poll of surviving members of the President's Council of Economic advisers, which found not a single one of them supporting Trump for president.

    As for Navarro's credentials, I used to respect Harvard, but knowing that Greg Mankiw is on its faculty, and that it produces graduates with ideas as outlandish as Peter Navarro, I don't care anymore that I won't be able to afford to send my son to Harvard, because even if he qualified, he'd be better educated at the local community college, or at University of Phoenix online.

    Doctorates and academic integrity are not what they used to be. Check out University of Colorado at Denver librarian Jeffrey Beall's account, published by the National Institutes of Health, of his experience with predatory journals - those that publish papers in shady online journals in exchange for fees: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5493177/

  135. Since Trump was elected the portion of US trade revenue has declined vis a vis the rest of the world and that includes services. International trade in the rest of the world excluding the US, is actually rising while our share shrinks. Source BLS. We import more and export less. This is the true Trump effect, not with standing the expected tariffs which will accelerate the trend while throwing up smoke and mirrors.

  136. What's not being taken into account is that many USA products are considered inferior in the EU. American cars get poor mileage, American food with GMO products, and, of course, awful wines laced with sulphites. US made does NOT equal quality.

  137. Assuming US demand for steel will not decrease after the tariff (which it will, by an amount depending on the elasticity of demand), and the world price of steel does not drop (which it will, by an amount depending on the elasticity of supply) just after the tariff, $1,000 worth of foreign steel (one metric ton or so?) will cost $1,200.

    However, because of the tax cut the dollar will become stronger, and in a year or so the cost of importing that same amount of steel will be back down to $1,000.

    Something similar will take place with aluminum.

    The problem is the strong US dollar because of the federal budget deficit.

  138. Do not understand. The US $ has continued to decline over the last year (try going abroad on vacation) it is the importers that are getting hurt but there are no replacement industries which would at least five years(if ever) to replace as
    the industrial skill sets have long been lost. It is if everyone went to Trump University.. THE DEFICITS WEAKEN THE $

  139. Thanks for Navarro's Campaign White Paper link to "Scoring the Trump ... .

    I have not read it but I am astonished by the approach of the Trump White House to forming policy. Now that the WH is heading up government, I remind them that there are plenty of government experts in the details of trade and the "barriers and tariffs" on every country that we trade with. In my experience the US experts have created the World's most developed data base on trade. I recommend the WH staff, should get acquainted with these federal employees and their data products.

    Clearly, there are trade barriers, and the purpose of the WTO (formerly GATT) is to peacefully and fairly apply pressure to governments that participate in the WTO to remove these barriers and reach agreements that are fair to all the trading partners.

    I have experience in this field in the 70's and 80's and there are some very tough problems that require a lot of public education to reach consensus that all parties feel is fair.

    You can see from the faces of the steel and aluminum workers in the photo heading your opinion piece that they are a anxious but hopeful but I am afraid they already know that the aluminum and steel tariffs are not likely to work in the long term.

    People should remember that the US is not self-sufficient in many strategic materials that make up many of our defense systems and we must depend on our trading partners and alliances to keep the US machine in proper working order.

  140. Peter Navarro is a fine economist... of the early 18th Century. He's a fine proponent of mercantilism. Unfortunately Adams Smith (in 1776) and David Ricardo (1817) sort of advanced the argument to show that economies are better looked at as a mutual benefit rather than a zero-sum game. I am surprised he was able to earn a Ph.D from Harvard without reading (or at least understanding) modern economics.

  141. Trade is not a bilateral affair. It is not a wrestling match: I win, you lose.

    It is a multilateral affair where every country wins. Country A sells to country B, but country B does not buy from country A. Instead, country B buys from country C which does not buy from country B. Instead, country B buys from country A. With which country should country A negotiate B or C, or both?

    The best negotiator is comparative advantage. There is no need for expert negotiators. Simply remove all tariffs and quotas.

    “Fair” trade is almost always harmful to the middle class.

    A strong middle class is critical to national security.

  142. "Here’s what he told Bloomberg recently: “My function, really, as an economist is to try to provide the underlying analytics that confirm his intuition. And his intuition is always right in these matters.” Wow."

    Tell me the conclusion you want to prove, and I'll give you the data to prove it.

    It's the exact opposite of the scientific method. In fact, it reminds me of those types of "cherry pick the data" articles drug companies pushed in the 80s and 90s until government regulators cracked down on promotion intended as discovery.

    I knew Trump would be an unfit president, but I never suspected his number one requirement for serving in his administration would be sycophancy.

    Pretty soon, more than just Trump will be running naked through the West Wing.

    At which point, it will be up to voters to send a strong message to Washington that one and all have grown too big for their (lack of) britches.

  143. Riddle me this, Paul Krugman - If Trump is not "open-minded" enough to "assess the evidence" and entertain "opposing views", then why did he wait 13 months to roll out these tariffs? It sounds like he was swayed for quite a while by the arguments of free traders like Gary Cohn. And this is an issue on which he campaigned hard and appeared to have strong and genuine convictions. I think you underestimate Trump's openness to competing ideas.

  144. I think you overestimate Trump. He shows "openness to competing ideas" only because he has very few ideas of his own (and the few that he does possess are terrible), and he needs others to bail him out, just as he would seek out his own childrens' advice as to who he should fire on "The Apprentice". What kind of businessman brings his daughter and sons to work with him, and let them make personnel decisions? A profoundly ignorant and lazy one.

  145. If your argument is that Mr. Trump’s opinions change based on who happens to be in the room, you’re not making me feel any better. You are confusing “open mind” with “no mind at all.”

  146. It's not as though the president wasn't fully occupied in the 13 months to date, was it? Can you say ACA, immigrant control and expulsion, high volume turnover of administration personnel, constant reelection rallies, oh yes, weekly golf outings at HIS golf resorts, and how can anyone forget his full time passion...tweeting!

  147. Springtime for Sycophants sounds like a song from a Musical. I wish that were. Our nation is facing serious decisions that will echo through our history.

  148. Let's hope there will never be a musical called "Springtime for Trump."

  149. I think it is a reference to "Springtime for Hitler."

  150. A culture of sycophancy is to be expected with this administration. Trump hails from the world of business; it's all he's ever known prior to last year. The modern-day corporation, which Trump is well familiar with, is structured much more like a dictatorship, and much less like the U.S. government. Though sycophants will come in various sizes in shapes in any type of organization, not being one is hazardous in a dictatorial regime.

  151. Reminds me of an earlier economist who was widely discredited by his peers but who caught the President's ear by justifying his right-wing ideas. I refer to Arthur Laffer, who afflicted us with trickle-down economics. We all know how well that's worked out.

  152. It worked out well for Laffer.

  153. I fail to see how State levied sales taxes don't amount to a tariff of sorts on goods at the point of sale...admittedly it's regardless of origin, but it serves to level the playing field. I'm also trying to work out how (as Paul Krugman states) taxing the consumer is much different when the exception lies only where the Government loading, of either tariff or sales tax, is applied. This is a question not a criticism of Krugman - and I could not agree with him more on the ascendance of sycophants in Trump's impoverished Executive branch of government. One thing Trump's sycophants can be sure of - base flattery is no guarantee of Trump's loyalty or their survival - just ask Jeff Sessions, Sean Spicer, Anthony Scaramucci et al.

  154. VAT is not a tariff as such, but works like one towards reducing the competitiveness of the goods produced in the country without one (e.g. USA).

    Example: assume equally productive and equally paid workers in countries A and B, total production expense of a certain good being $100.
    Country A levies payroll and corporate income taxes, so the company pay a total of 20% of its cost of goods to the government, so the final cost becomes $120. Company sells good inside the country for $132 making 10% profit margin.

    Country B uses VAT at 20% as a major source of the government revenue, and has little of payroll or corporate income taxes. Thus, the final cost of good inside country B is also $120. It sells it for $132 making 10% profit margin.

    Now, the interesting things begin to happen when countries A and B start trading with each other. When the exporter from country A comes to B with their wares, they get VAT laid on them (20% of $120) - so if they try to sell it at below $144 there, they will lose money. Vice versa, when the B exporter ships their goods out of the country, customs return them the whole $20 of VAT they'd paid - so when imported into the country A, the good can be sold at $110 for the same 10% margin, badly undercutting the domestic producer.

    The most logical way out of this is obviously the introduction of VAT stateside, border adjusted tax proposed some time ago and killed by the retail lobby being some inferior approximation.

  155. Don't forget to add the health insurance and education costs.

  156. Sibben: European taxes are quite varied, country by country. Corporate taxes are rather low, actually, thanks to VAT. Also, in my example you can substitute "taxes" paid in country A to e.g. payments for health insurance that businesses providing it to their employees make, it's a similarly added cost.

  157. How else can we pay for a $700 Billion/year military budget?

  158. Those who accepted the request to serve must have suffered under the illusion they too, like he and his family would profit. This appears to be a malady that many who support our President's policies suffer.

    Seems Mr Trump, at least in Mr Navarro's eyes, may not always be right, but somehow is never wrong.

    Raised my kids the same way, but for some odd reason they moved far away and no longer speak with me. What in heaven's name is wrong with them?

  159. "Oh, wait," indeed. As if it wasn't abundantly clear dating back through 2016, if not before, that President Trump comes to America thanks to the wonderful folks in the Kremlin. Trump's behavior, rhetoric and appointments for the past two years have been too bizarre to believe otherwise.

    Putin hates NATO; so Trump calls into question NATO's efficacy, cost and relevance to US security. Putin despises the EU and seeks to tear it apart; so Trump trashes the EU, especially Germany, and targets its economy for punishment with a senseless show of tariffs.

    As former VP Biden declared in the waning days of the Obama administration, "this is treason." It is nothing less, and the Republcan Party is enabling it with Devin Nunes leading the treacherous charge. The American people must stop letting this happen.

  160. Yes. And the UK awaits a sympathetic tweet re the poisoning of a former Russian sp yon British soil. But Trump only insults the mayor of London in tweet time.

  161. I'm pretty sure the answer could be found in those elusive tax returns. Putin has pwned Trump since Trump's ability to get normal financing dried up. My bet is that Putin could bankrupt Trump with a wave of his hand and Trump knows it.

  162. So, will they come out and vote for Democrats at all levels or will they vote for guns and anti-abortion and for private schools that don’t have to deal with poverty or immigrants? In short, will voters support the single issues that they believe are “God’s will” or will they vote for those who protect the Constitutional rights of all citizens and not just those with money to burn?

  163. He did "research" by going on Amazon!?? Isn't that a perversion of the term? Besides which, and more fundamentally, "research" aimed at finding support for a particular position or opinion isn't what the term, as used by real researchers, scientists and scholars, normally means. It's the way it's used by the tobacco companies, the pharmaceuticals and big oil.
    I don't know if Trump actually used the term in speaking to his son-in-law, or if it's Professor Krugman's way of referring to what was said, but either way it's misleading.

  164. Trump's trade hostility toward the EU is not very odd when seen from the perspective of Putin's great goal to drive a wedge between the U.S. and E.U., and thus harm NATO! Lots of things make more sense when viewed from that angle.

  165. Tweet from @PreetBharara: Vladimir Putin could stand in the middle of 5th Avenue and shoot somebody and he wouldn't lose Donald Trump's vote

  166. Well said.

    As an economist who had to deal with Navaro’s work on energy markets before he turned to trade I can only say he found no traction. As a former Senior Fellow at the Peterson Institute for International Economics I can only bemoan the support and cover he is offering Trump.

    Those in the administration are correct when they assert the United States did not win perfect deals as it negotiated the various trade agreements sealed over the last thirty years. But then no nation did. Did China take advantage of the world trade system? Yes. Would we have been better to leave China out of the WTO? No.

    Sadly, history is replete with instances when governments have randomly taken drastic actions on trade or other areas of economic policy. Few, if any, of these spasmodic episodes have ended well. I doubt that Professor Navaro will have any real influence. I have no doubt that Trump will take further actions which will only increase the potential of a not to distant economic calamity.

  167. Maybe Navarro did not get any traction in academia but Trump is as far away from academic as you can get. You may make the argument he is as close to ignorant as you can get and he gets his traction with his ignorant cohorts. It's spooky having an Ignorant in Chief.

  168. I am not commenting on trade. I have been trying to find a way to reach PK that is not twitter -- I don't tweet. I do Email, but I have not address for him. My request is this: It is tax season. If the IRS would attach a one question survey to forms, it would help congress understand people's priorities for the use of their taxes: Ask them what percentage of their taxes they would like invested in each of the following: HEALTH, (sub categories: research, medicare insurance for all, and new hospitals); DEFENSE (Veterans care (but wait, that would be under medicare for all), Weapons, military benefits, foreign bases; EDUCATION (paid tuition for all who pass an exam; pre-school/child care, . Do NOT include INFRASTRUCTURE -- all would say build more roads which accomplishes nothing. State taxes should go to infrastructure with matching funds from feds, but adding to the first three choices nulls the gain from understanding the differences in the first three choices and their repercussions in people's quality of life.
    patricia k. buckles ([email protected])

  169. Brilliant suggestion! I hope you keep reaching out to anyone with a public platform who can make this case and push it into reality.

  170. Long as I could zero out WELFARE, I love it!!!

  171. My only correction to PKB's list would be instead of DEFENSE it would be WAR/DEFENSE, since the need to sustain both shows no signs of lessening.

  172. In tRumpLand economics has become an intuition-based belief system! So Economics goes over and joins with tRumpLand's view of climate change. A hoax because tRumps intuition tells him so. Science is dying as the basis for managing our environment as tRump busily purges the EPA and Dept of the Interior of scientists and/or experts and turning the west into wholly-own subsidiaries of Corporate energy interests i.e. Kochs, etc.

  173. To say the average EU tariff against our exports is "just 3%" is misleading without knowing exactly how this is calculated. If it is a trade-weighted average based on our current export mix, then it understates the barriers against goods that are not in that mix. The EU imposes a 10% tariff on auto imports, in addition to the VAT tax mentioned by Krugman. In general, their markets are much less free and open than ours.

    Has anyone been paying attention to the way China has expanded its steel output by leaps in bounds? In 2000, they produced roughly the same amount of steel as we do, in annual tonnage. Today they churn out TEN TIMES as much, and account for nearly half of global output! They are the 800-pound (or should we say, 800-million metric ton) gorilla in the room. No wonder the EU imposed stiff anti-dumping duties on Chinese steel last year. The EU is quick to protect their markets but yell foul if we do the same.

  174. Concerning automobiles, Ford Europe is a full subsidiary of the US company and number three or four in terms of sales volume in the EU. Opel also has a pretty good market share here but was sold by General Motors last year.
    What European driver in their right mind would want to buy Detroit steel anyway?
    As far as my personal taste goes, I hope that any trade war doesn't hit maple syrup and peanut butter too hard.

  175. Agreed. SJPs analysis is spot on, except for one thing: China now recognizes the flip-side and danger of unconstrained 7% growth and as recently as 6 days ago Beijing cut the annual budget deficit target to 2.6 percent of gross domestic production (GDP) from 3 percent in 2017 - the first cut since 2012. This effectively sets a growth rate of 6.5% from last year's 7% and they've also tightened credit from Beijing banks to reduce their fiscal stimulus and hence reduce production of things like steel.

    Yes, they've been overproducing and dumping for years, but they are starting to see the downside to that.

  176. @ SJP - I agree with much of your analysis of the roots of Chinese steel overproduction - but how do you suggest we should address this problem? Their oversupply depresses prices everywhere. Anti-dumping duties (such as the EU has imposed) only results in the steel being dumped somewhere else. The Chinese have been promising for years to rein in production but they never do. Even if they cut back to 500 million annual metric tons (a huge adjustment at this point) they would still be cranking out 6 times as much as we make. US producers survive by focusing on higher-value specialty grades and mini-mills. I hate tariffs as much as any free trader, but at least Trump's action is a shot across the bow to stop being complacent about the situation.

  177. Verdict first, evidence afterward (if at all).

  178. "Trump's intuition is always right?" Mr. Navarro looks like a nice person who doesn't deserve the fall he will surely experience. But please stop kissing up to Mr. Trump. It's hurting the country.

  179. I knew him when he was at Harvard. He is not a nice person but resentful, envious and lacking any intellectual gift except what got him his PhD. Harvard should lift his degree.

  180. But isn't a tariff also just a tax? What is the big deal? Governments have been taxing goods that are bought and sold for centuries.

  181. Tariffs are taxes applied to imported goods only. They weak domestic producers from more efficient, lower cost foreign competition. When foreign government retaliate, as they surely will, our strongest industries while lose export sales.

  182. Tariffs are taxes applied to imported goods only. They protect weak domestic producers from more efficient, lower cost foreign competition. When foreign government retaliate, as they surely will, our strongest industries will lose export sales.

  183. But if our "strongest" industries can not handle the tax that foreign governments place on them, they are not very strong to begin with. If Luxembourg wants to tax Jim Beam bourbon from Kentucky, who cares ? Lux folks will still buy it if it is "strong" enough.

  184. After consuming the intriguing column "The G.O.P. Accidentally Replaced Obamacare Without Repealing It" also in today's paper and being reminded of Senator Orrin Hatch's disrespectful "dumb ass" comment -- it's clear Republicans themselves don't understand economics and don't read the fine-print. Few appear to have read the thoughtful, intelligent and thorough the Affordable Health Care for America Act (aka Obamacare); slightly larger in length than a Harry Potter book.

  185. Sadly, most don't read... they just listen to what they want to hear.

  186. If the US taxes production, and Europe taxes consumption, I would think that US exports to Europe are taxed twice while European exports to the US are not taxed (at the federal level). At least that is the misconception many of us share with the President, and a misconception you have not addressed.

  187. The point is that products sold to American consumers are not subject to VAT whereas those sold to European e.g. German consumers are. That is true whether the seller is a German or American producer. So there is no inherent advantage.
    But I don't know what you mean by "if the US taxes production."

  188. As the owner of a small manufacturing business, I can say, unequivocally, there are no taxes on U.S. production at the federal level. Full stop. Depending on what state production is occurring in, there may be state taxes on aspects of production; e.g., items consumed to produce goods, test fixtures, etc. However, in many states, businesses can be granted exemptions to even these use taxes. In my experience, small manufacturers don't bother to register for a sales and use tax permit because their sales are not taxable, and if a business wants to be exempted from paying, it must register. It gets a little confusing, but again, there's nothing at the federal level other than income tax on the entity or its owners, depending on how the entity is structured. (As much as we Americans like to whine about taxes, we are amazingly illiterate about the structure of those taxes, which is why we are continually getting bamboozled on this issue by the politicians we elect.)

  189. Trump targeting Europe with anti-competitive trade sanctions is indeed odd, and not only since European markets are relatively free and open, but as Professor Krugman also points out, because they are so out of step with his almost otherwise consistently racist policies. To anyone else who missed Leslie Stahl's interview with Davos, Michelle Goldberg gives a great recap in this article, and here's a hint of the plot: Bigots needn't worry their hateful heads about Trump's bizarre aberration from racism on the single issue of European trade, because Betsy Davos more than makes up for it with blatantly racist policies in school discipline: https://www.nytimes.com/2018/03/12/opinion/devos-school-prison-pipeline....®ion=Header&action=click&contentCollection=Opinion&pgtype=article

  190. It's impossible for Trump to look at a field of candidates and use any objectivity in evaluating this persons knowledge or credentials. That is unfortunate but under Trump this will not change. It's one thing to be loyal to your boss, but you should above and beyond be faithful to your profession and it's guiding principles. One thing Trump has proven is that if it's good for Trump it most likely isn't good for the average citizen. He has again done this with the choice of Navarro.

  191. "A VAT has nothing to do with competitive advantage". True, but if the VAT pays for health care and the social safety net, so that those are not loaded onto the manufacturer's payroll, it makes a huge difference. I make a boat, but I am really selling a boat plus health care to a US or Canadian customer. The Canadian competitor is only selling the boat in either country because their VAT covers many of the costs that I have to pick up in payroll taxes and employer provided health care. I really feel at about a 15% competitive disadvantage.

  192. VAT IS a national sales tax & varies from country to country. in the EU: e.g 19% in Germany, 20% in UK, 21& in Spain. The USA has no NATIONAL sales tax but state taxes are imposed on all sales, domestic or foreign.

  193. All things being equal, Europeans would rather buy European goods when forced to pay VAT. Canadians not so much.

    At least that is my experience. Krugman is 100% book theory.

  194. It has been my perception tariffs are taxes that are passed on to consumers. According to American history tomes, American consumers pay for American tariffs on goods from other countries. Imports still arrive and higher costs due to tariffs are naturally tacked onto goods.
    The cause and effect cannot be ignored by reasonable minds. I think the underlying issue is not tariffs, per se, but economic isolationism in general that will harm other countries, including our allies, as well as American consumers. Those adhering to old world thinking are, in my view, destructive entities on the modern world stage. Trade can always be made better, but to destroy the status quo and cause suffering indicates a narrow, selfish, and greedy mindset geared toward that shared by enemies of successesful of liberal democracies.

  195. So Ph.D. Navarro left out of his Pensa some Trade 101 credits. That has a remedy. The issue of sycophancy is harder to tackle because is embedded in Navarro's values and it seems to be a syndrome spread to the GOP Congress.

    The syndrome is easier to spot in the White House because outdated sycophants are fired and replaced by new ones that pledge adoration to Zeus in an administration with no Athena to inject wisdom. I agree this will not end well. However, the ending side of it sounds like music to my ears because it will have an end.

  196. Trump sees the trade balance sheet USA/Germany, notices the minus and cries foul. Did he or any other trade hawk ever have a look at the actual sales situation of US companies in Germany? True, German producers sell quite a few cars in America. That's because they make cars, Americans like to buy - and not as a bargain. US companies also produce cars, Germans like to buy, just not in the US. Ford has a plant in Cologne since the 1920s, quite a nice market share, and quite a good name. GM recently sold it's German company Opel which it had owned since 1930, for GM internal reasons - their business decision. Other US companies who decided not to ignore the German market are also doing fine, often running successful subsidiaries over here. I might mention Black & Decker, Caterpillar, John Deere, and the other tractor guys AGCO, and Case New Holland. But, as said, they decided not to ignore the German market, but to work it. Just throwing goods at somebody's doorstep and ordering him to buy is not going to do the trick, least with US costumers. And: German companies have floors of people, making sure their products comply with US regulations. US companies - and also US farmers - are free to do the same, respectively the reverse. Some actually do!

  197. I find it strange that Navarro arose from academic obscurity to become Trump's go-to guy to justify tariffs without anyone in the news media offering a detailed profile of who he is and what he thinks. He just seemed to show up in the White House, Zelig-like, to add to the general upheaval.

    Not that his uninformed views would make any difference to the Republican-"led" Congress, where syncophany is endemic. It is fast becoming clear that the current Republican Party strongly desires to be led around by the nose by a barnyard full of loose cannons and ne'er-do-wells who have no understanding of policy, leadership, common sense or patriotism.

  198. Looks to me that the Trump administration continues to defraud the average US taxpayer by increasing the share of the federal debt ($140,000) in return for a paltry tax break retrieved by increasing prices of consumer goods with tariffs.

    With tax breaks benefitting the US steel manufacturers, at what cost and how much of those tax breaks will be spent to make them competitive with foreign manufacturers; do we even know the commitment it will take to get it done?

  199. Trump is right about the need to fix our trade policies, but of course the manner by which he is doing it is totally wrong and misconceived. Trade policies are there to foster peace and global wealth. We need to adjust trade policies not destroy trade to ensure the U.S. has its fair share without causing trade and "real" wars. The best way to adjust is to lower income taxes on businesses (the current reform will shifts taxes from on set of businesses to another) and replace with a VAT. Though I agree VAT does not distort trade, VAT does shift the burden of tax from the domestic manufacturer to the global manufacturer/local consumer. This shift allows VAT countries to invest more in export business and for internal development (e.g. schools, healthcare, food, etc.),

  200. It seems that prices for steel and aluminum have been rising for the last 2 years. So why are we placing tariffs on imported steel and aluminum? This would only make sense if prices were falling and threatening US manufacturers.

  201. Krugman: "Where is Trump getting his misinformation?"

    Trump should be getting his information from the WTO, which publishes detailed tariff data.

    The EU's 3.0% average is very low compared to many countries, although the US's average is lower at 2.4%.

    See: "World Tariff Profiles 2017", trade weighted average, 2015, p. 82 and p. 177.

    For links, Google "World Tariff Profiles site:wto.org".

  202. Even Larry Kudlow, in a unique moment of clarity, said tariffs are bad for everyone. Then, sounding like a New Dealer, he said, it would be better to subsidize an industry to save it rather than use tariffs.

    American style capitalism is failing millions. Demagogues are taking political advantage. This will not end well.

  203. Saying VAT is a distortion is like saying the New York sale tax penalises Europeans exporters exporting to New York because they have to pay the sale tax, while New York exporters exporting to the EU do not pay the New York sale tax. Worrying that the leaders of the greatest nation on earth cannot understand this. But then greatest nations come and go, most often due to their own failings. Maybe one day history will explain how the US went down the drain by suddenly deciding that reason, science and intelligence were bad things...

  204. "(Trump) expects the kind of treatment tin-pot dictators demand, free from any criticism inside or outside his government and greeted with constant hosannas of praise.)"

    Life-time tenure is often only a step or two beyond the perfect harmony of the sycophant choirs in the minds of Dear Leader types. Once he makes a complete dog's breakfast out of our institutions and traditions, he'll tell us (with his sycophants' support) that "Only I" can fix it. The sad truth will be that "Not Even He" will be able to unscramble the mess he and his minions are creating. Don't believe that It Can't Happen Here. It is happening before our eyes. If we don't use our constitutional power soon to redress the grievances that constitute the present trumped up administration, the opportunity may be lost. November is a long way off.

  205. Harry - Thank you for your very accurate comment.

  206. "Since when has it become acceptable to declare that Dear Leader is infallible?" The answer to that question is easy, Mr. Krugman. It began on the day that Dear Leader was nominated. The tide gained strength after the election results were in and grew stronger after Inauguration Day. Dear Leader has amassed such enormous power that now he can, with full imperial confidence, declare that those who didn't applaud his State of the Union speech were treasonous.

    Next he'll be demanding a full military parade in Washington or tossing around a suggestion of becoming Dear Leader For Life. Oh, wait...

  207. So, we sat through "Springtime for Trump"?

    When can we expect this farce to make a final curtain call?

    Tomorrow's special election for the 18th Congressional District in Pennsylvania should be watched closely; I'm tired of "close", it does not do any good in closing this nonsense down.

    Everyone has to work on the slog to November this year and 2020; Otherwise it is a very bad things will only get worse.

  208. I wonder if Navarro is the source of Trump's firmly held belief that the US has a large trade deficit with Canada, when in fact it has a small surplus. If you are engaged in an effort to renegotiate NAFTA, it may be a good idea to have a few basic facts. (Such as: The US exports more to Canada than it does to any other country. And Canada exports more to the US than it does to any other country.) But put Trump in front of a bunch of deplorables in Pennsylvania, and suddenly everything is fact-free.

  209. Navarro has run about 6 times for public office, most of the time as a Democrat. He always lost. The average person who makes choices in elections seem to be smarter than Trump.

  210. All agreed, but let's not forget who gave us thee Trump: GOP and still enabling his destructive policies for 0.01% over the planet earth.

  211. Suggesting that a 3% tariff on imports of business goods is somehow.. “ horrific barriers and tariffs,’ is a strange, strange riff into the realm of the absurd...But, of course, this past year and a half, we have witnessed reality as we once knew it, enter that same realm.

  212. While millions thought they were getting a populist president who would look out for them, what we have instead is a weak-minded, anti-intellectual buffoon who adores the exercise of personal power. He maximizes this power by dividing us because he knows he cannot unite us behind his agenda. Division of the polity allows him to manipulate supporters on various issues while he takes full advantage of the mechanisms put in place by other plutocrats to allow a minority agenda to have so much power. Between Citizens United, gerrymandering and campaign finance, the tools were already there.

    Of course, the only way he has these tools at his disposal is by promoting the 1% agenda. By providing gifts such as the massive tax bill or removing the ACA individual mandate, he will have the craven support of all the paid-for minions in Congress who have already abandoned the Russia inquiry in the House.

    If blood runs thicker than water, money runs thicker than blood. Democracy is endangered and about 40% of voters are clueless participants in this process, looking for a strongman to oppose elites, little knowing he has already sold them out to those same elites. His petulance will be tolerated by the plutocrats like the Kochs as long as he delivers the goods.

    Trumps knows he will have his podium so long as he plays along. When he is no longer of convenience or use, he will be disposed of. While Trump may appear a demagogue, he knows whose hands are on the rug he is standing on.

  213. Thank you Tom for the clearest, most concise explanation for Trump's unshakable support I've encountered to date.

  214. You cannot unite people behind an agenda if there is no agenda.

  215. He may know whose hands are on the rug he is standing on, but you can bet that he is itching to remove the rug. I am positive that he would like nothing more than to take a leaf from the books of other dictators and become President for Life. I also bet that he is deeply frustrated that he lacks the right to call for the surreptitious assassination of those who dare to stand against him. I am not talking about just of the assassination of their characters, which he does now on a regular basis, or the decimation of their bank account in money-devouring legal fees, but of their physical being. I don't mean to sound paranoid, but there are certain members of his inner circle who look like they would happily poison, stab or suffocate his enemies for him.

  216. One word in response to the query as to when it became acceptable to declare the nation's leader infallible: Camelot. One year: 1961. Any more questions?

  217. Extraordinary that it has come to this. Many instances every day of transgressions any one of which might have undermined a prior Republican or Democratic president. I am horrified, depressed, discouraged, dismayed, aghast.

    Over the past 3 or 4 days: Tin-pot dictator sycophancy economics. Hatch act violations. Trumps and Kushners sign new business deals. House Republicans close investigation on grounds that are transparently false. Money buys government access for Trump Jr. friend. Trump America's low moral standing gives Saudis free license. The president initiates tariffs and North Korea talks without consulting a single expert. "Let them call us racist. We will wear it as a badge of honor."

  218. Why should we be listening to Mr Krugman anymore. His famously bad prediction of a post Trump economy were embarrassingly wrong. In an interview on Bloomberg the other day he was basically silenced when asked a question about why it was wrong to try something different when it comes to trade. Perhaps he and NYT’s readers should consider the possibility that these tariffs are part of a larger negotiation that includes standing up to China and at the same time getting their help with North Korea.

  219. This precisely how Saddam Hussein met his end. Telling him something he needed to hear but didn't want to hear could result in your leaving the meeting with him in a body bag, something his "advisors" learned very quickly. He therefore made decisions based on living in an echo chamber and we all know the result. But the system took a long time to self-correct. Let's hope that's not the case in our country, starting with the elections this November. I also don't wish the same outcome for Donald Trump that Saddam Hussein suffered in that insane part of the world. I just want him to go away, as soon as possible.

  220. In Saddam's case it took intervention by the USA. Who will intervene for us? Canada?

  221. "I also don't wish the same outcome for Donald Trump that Saddam Hussein suffered in that insane part of the world. I just want him to go away, as soon as possible."

    In *this* insane part of the world, perhaps a special ward could be outfitted for Trump at Bellevue. It would be staffed by actors playing the part of Donald Trump. They would all claim of course, to be "the real Donald Trump" and would be visited by actresses playing Ivanka and perhaps by the real Melania or the real Stormy Daniels, or even Alec Baldwin. None of them, of course, would pay any attention to the ex-president.

  222. Unfortunately history shows us what ego-driven & power-hungry men like Trump do. They begin as demagogues who con the people into believing they are no danger & will in fact save the country where they say no one else has. They gain more power, begin violating laws, (legal & moral), buy other men to support them, get a great PR gang who spreads their propaganda, attack the free press, attack any institutions which could oppose them, & soon (very soon) there's nothing anyone can do to stop them. Full-blown dictatorship, coming right up. And the worst thing is: some of the people will STILL support them! Even though the dictator goes after everyone, even them, indiscriminately. Hopefully there are enough good & decent Americans with some power to stop the guy in his tracks. But sadly history shows how it often unfolds. And Trump is well on his way.

  223. Thanks for pointing out the obvious. As a concerned voter, I read everything I can about a candidate's positions and reading Trump/Navarro white papers on economics was one of the first reasons I could not vote for him. Trump's grasp of economics and trade is abysmal and Navarro is where he gets these absurd ideas and apparently lives in a fact free world.

  224. By now, we've all seen egregious examples of Trump's intuition based decisions. Massive failures including Devos, Pruitt, and Carson but this is not without precedent in the private sector. Immelt ran GE into the ground, upending the quality work Welch did before him. In the private sector, when one corporation is mismanaged, its competitors take market share and seize their customers. Our competitors are China, N Korea and Russia. Do we really want the USA to be displaced in favor of China, NK and Russia?
    Arguably Trump's most massive mistake is Scott Pruitt who is rolling back environmental protections on a daily basis. When GE lost market share to AG Siemens, the planet continued undisturbed but who is offsetting the environmental damage the US is doing to the planet?
    My point is simple. When one burger corporation loses market share to another, there's no material global difference. But when Trump makes his massive mistakes based on misinformation and "intuition", the ramifications are not so simple.
    Sadly, the underlying problem is not limited to Trump. Congress (aka: our board of directors) has the tools to remove the incompetent Trump but fails to do so thereby disclosing another massive weakness of our "corporate charter".
    Left untreated, cancer degrades into stage 4. Similarly, Trump's mistakes may not be recoverable. If the dems blow the midterms like they have done so many times before....

  225. Krugman: "In Navarro’s version of the world, for example as expressed in a campaign white paper, VATs give European companies a huge, unfair trade advantage."

    That white paper is co-authored with Wilbur Ross, so why is Krugman singling out Navarro? ;-)

    Anyway, their argument is a case of the faulty comparison fallacy. Fallacy expert Bo Bennett defines a faulty comparison as:

    "Comparing one thing to another that is really not related, in order to make one thing look more or less desirable than it really is."

    Example: "Broccoli has significantly less fat than the leading candy bar!"

    Source: logicallyfallacious.com web site.

    Bennett is also the author of "Logically Fallacious: The Ultimate Collection of Over 300 Logical Fallacies".

  226. "Not only is Navarro proudly declaring that he’s a propagandist, not a policy analyst — that his role is solely to confirm Trump’s prejudices — he’s also engaging in an utterly un-American level of sycophancy. Since when has it become acceptable to declare that Dear Leader is infallible?"

    The vast majority of GOP politicians and voters have declared that the Dear Leader is infallible since he was elected and nothing will cause a shift in their thinking. I truly believe he could declare himself president for life and the current crop of spineless, craven, and amoral GOP politicians would not only fully support him but also do everything in their power to make it so.

  227. GOP pols are not spineless and craven. Trump is delivering for them what the Republicans have long sought: license and tax elimination for corporations and the wealthy; racial discrimination, incarceration, tricky falsehoods, and the bullying of alleged "enemies" for everyone else. GOP pols support those who deliver for them, just as Democrats loved Obama.

  228. I Hope That's Not True. But?

  229. All it takes is a terrorist attack right around the time of elections. He could "temporarily" suspend elections to keep the American people safe and promise to bring them back as soon as possible. We all know that this Congress would go along with that, for the good of the American people. It is a simple thing, a small thing really, and even our TV news media will provide a range of excuses explaining why this was necessary in these extraordinary times, But that will be that. And the thing that can't happen here will have happened without firing a shot and without any serious protest from the Republican Party. How far are we away from this event? The only thing stopping it is the imagination of Donald Trump and that is a very slim hope to hang the future of the American experiment on. Without the "next" election our democracy will immediately cease to exist and it will never come back.

  230. Krugman thinks Trump is totally misinformed about Europe and the EU, specially the role of VATs. Trump is only partially misinformed about Europe and the EU. What he knows to be true is that socialist and social democratic parties have or share power -- or recently have shared power -- in virtually all European nations. The only big exception to this in recent years has been Russia which abandoned socialism and communism decades ago.

    Racism and ideological intolerance of anything other than monopoly capitalism go hand in hand in American political demagoguery. Trump may not understand this, but he knows it.

  231. No, it didn't begin well, and you're right, it certainly won't end well. Though you had me laughing with this:
    "But giving heterodox views a hearing only works if the people seeking advice are themselves open-minded thinkers, willing to put in the hard work of understanding opposing views and assessing the evidence. If this sounds to you like a description of Donald Trump, you might want to seek professional help."
    Unfortunately Dr. Paul, his followers who actually believe that DT is an intellectual marvel won't seek the help they desperately need...they don't know they're sick.

  232. And Trump would have you believe that he has a very good brain and was a stellar student.
    But of course, those of real intellect, like true academic standouts, don't begin with a conclusion. They hear out different views and aren't ideologically inflexible.
    Trump started with a simple talking point and then sought the evidence. Even as president, he holds us hostage to campaign chants masqueraded as policy.
    If Trump really were 'a stable genius,' he would not be so small minded and so needy as to surround himself with yes people and in an echo chamber.

  233. I'd love to see his undoctored Wharton transcripts after he reveals his taxes.

  234. "To the (very large) extent to which Trumpism is based on racial enmity, picking a fight with Europe, of all places, seems strange."

    But it is YOUR theory that Trump's policies are based on racism. Since I never bought into that ridiculous Democratic line, I do not find it strange, at least not for that reason.

    Trump is not racist. Our ambassador to the UN is an Indian American woman. He hugged Modi when the latter visited the US.

    But "Trump's racism" is a card which Democrats love to play and they seem addicted to it.

  235. Like so many things Trump and Putin, the president is doing the bidding of his Russian friend even if it means a trade war with our European allies.

    The reasoning behind this turning against our allies bolsters Putin’s bid to shatter European unity but doesn’t answer the question on why the U.S. caters to a corrupt oligarch like Putin.

    Perhaps the answers to Trump’s puzzling trade policies will be found in the Mueller investigation findings to reveal why Putin has such a firm hold on Trump.

  236. The investigation AND his tax returns.

  237. The answers will be found in a blackmail tape. I hope we get to see it before the house comes tumbling down.

  238. our country too is run by unelected and corrupt oligarchs. What could go wrong?

  239. Paul...to lighten the mood and diversify the tone of your pieces I think you should acknowledge and marvel at the robustness of US institutions and the power of long term US relationships. They have withstood a barrage of key vacancies, hollowed out expertise, poor diplomacy, professional incompetence and cruel policy. And yet...the union still stands. Sure Navaroo is yet another arrow in the quiver of evidence free policy making and professional incompetence but hopefully and ironically, this may lead to a silver lining that reaffirms old norms and restores the value of competent government in the eyes of many....It is not good for your health to be grumpy all the time!

  240. A wise leader will, first of all, surround him/herself with professionals wiser than him, for best counselling. And this must include telling the president what he needs to hear, not what he wants to hear, and constructive criticism ought to be welcome, so the mistakes we humans make, imperfect as we are, are caught in time and corrected before embarrassment, or harm, or both, occur. We have not only a brutus ignoramus on the White House, trampling on the constitution and the rule of law, but dedicated accomplices in his misrule. That history will judge them harshly is guaranteed. But by then, no remedy may be at hand. Have we ever seen such an unscrupulous beast, so vainglorious and incompetent, so corrupt, so entitled? And the entire republican party looking the other way? The legislative branch has given up it's functions, now lap dogs of Trump.

  241. Well said. My only question is whether that history will be written in Russian or Chinese because American English will have disappeared along with its home country.

  242. When I first began to manage a group of engineers, my boss gave me two important pieces of advice to help me on my road.
    First, there is no good way to fire someone. Whether for cause, or misconduct, or or incompetence, or budget issues and layoffs, it's always difficult, and no less necessary because of it.
    The other, perhaps more important -- Always hire people who know their job better than you do. If they don't, then you should be doing their job, and someone else should be doing yours.
    That advice has resonated with me for more than 30 years. Too bad Mr. Trump never got such important counsel, or, if he did, that he never listened to it.

  243. Not lap dogs of Trump-but of their minders in the deep state, our true government run by oligarchs. I'm quite sure they find Trump a useful fool.

  244. Europe already got blown to near-smithereens by American banks facilitated by the hubris of GWB GOP supermajority politics to sell financial junk hidden from sight by poisoned sham-regulatory approval. Tax payers got stabbed with the bill for trillions of banker robber baron theft from which the whole world is still struggling to recover. Trump seems haunted by stinging jealousies to punish Europe. He is jealous of its fine industrial export record won by superb engineering. He is apoplectic it spends far less than the ill-directed U.S. for senselessly warring the world. And he is jealous of its social (security) gains, healthcare, public transportation etc. Now he basically argues that 'so-called allies' that don't stupidly sacrifice 3% of their GDP to NATO should be punished into obedience to the kleptocratic will of the wrecking war hawks with merciless tariff pain.

    Instead e.g. Germany as an indirect victim of American interventionist mendacity is already being punished and should receive damages instead. The fall-out of the Iraq invasion, that Germany bravely refused to join and that lead to the Syria war, has driven millions of refugees to Europe as the seemingly safe haven within reach. Of course the war region itself suffered infinitely more. That leaves zilch rationale for extra punishments that´ll backfire spectacularly anyway. Why be solely motivated by spite, resentment, vengefulness and the quest for pain and retaliation for having the guts to be joyfully alive?

  245. Who else on the world stage expects sycophants to praise them? Kim Jung Un, Putin, the guy in the Phillipines, and most dictators in most "banana republics."

    It is sad that the presidency of our country
    has seen an election of some one whose advisers must become sycophants to survive in their posts - except the generals - as generals
    could never be comfortable as sycophants.
    i.e. Kelly, McMaster, Mattis, and in the past Patton, Eisenhower, McArthur, Grant etc.

    When sycophants take over, it usually doesn't bode well for the future of a country.

  246. So we attack the Europeans and Australians on trade. Exactly what Putin wants. And no one in the Republican Party notices this? It’s crazy. I thought the Republicans were tough on Russia. But they seem to just have this collective blind spot when it comes to Trump. The allegation that the Russians have Kompromat on Trump seems to have proof in how he conducts foreign policy. I fear Krugman is right. This will not end well.

  247. A VAT is basically a national sales tax. Why is this hard to understand we have the same thing just levied by states and local governments. If the leader of the free world cannot understand and accept this we are all in a world of hurt on many levels.

    His attacks on our allies and cozying up to dictators around the world is scary to say the least. He has time to tweet about actors but there has been deafening silence on the poisoning of an ex Russian spy that Britain has laid at the feet of Putin. Also so wired he is totally silent when it comes to Stormy, why is he so afraid of her what does she know or have that it has silenced the worlds biggest mouth?

  248. Trump, like the Tin Hat dictator he wants to be, will claim “national security” to enact his agenda. How many more edicts will he issue? Perhaps claim that ending NAFTA is a security issue? Perhaps his tariffs are needed for national security? Didn’t the 1930’s teach any GOP trumpocant a lesson?

    Drain the swamp by electing reasonable Democrats interested in making the national economy a better place in 2018!

  249. Just imagine who is going to advise and prepare Trump for the North Korean meeting. No this will definitely not end well.

  250. And still no retrospection from Republicans, moderates and all, for creating this monster.

    Joe Scarborough and George Will still think Reagan was a saint on this earth, and can't see that Reagan and his selfish, greedy, and bullying philosophy of Libertarianism is what started all this. You reduce the power of government (aka the representatives of the people), and corporations (not the states) are next in line to take over. And so they have.

  251. Mr.. Krugman asks about Trump, "Why rush into a spitting match with our allies that only serves the interests of enemies of freedom like Vladimir Putin?" Well if your boss is Putin, as with Trump, and Putin tells you to do something, you do it, right?

    Mr. Krugman tells us more or less that Trump's government of sycophants "will not end well". The problem is that its democracy, or what little pretense of it we have, will be gone, and it won't end well for the people

  252. The more I know about the trump white house the more I am horrified. Why don't republicans just vote for putin for president already and finally destroy what is left of our democracy. The wait is getting unbearable.