Why don't we call this administration Trump's Chumps? They think they're going to have an effect on Trump but instead the effect is on them. He loves you until you disagree with him, i.e. inform him about reality.
20
There can be little doubt that, barring divine intervention, historians will write that Republicans destroyed the United States of America.
Decent Americans who want to live in a democracy should be preparing to emigrate.
24
Mark my words, if Donald the Magnificent succeeds in getting re-elected (as is actually quite likely, despite all the fact-denying stories about a Democratic push) he will push for a repeal of the 22nd Amendment.
Then He'll make Ivanka his vice (President, that is) who shall act as regent, waiting for Barron to reach his majority. Governors, that is those who are sufficiently sycophantic, will become Dooks (not Dukes, as the Consitution forbids titles of nobility), and Mayors of large cities will become Kaunts... Cabinet posts will be filled by Councillors. And all will be hereditary - unless the incumbent or his/her champion is defeated in single combat. All combats will be televised live, obviously.
And we'll finally put to rest this vile notion of the people running themselves. It was just a phase...
9
Ah, it's Springtime For Sycophants and Germany. Sorry, my mind wandered to that Mel Brooks classic, "The Producers". It's springtime for sycophants of Trump. Let them come forth and sprout, spreading the most blooming idiotic petals of nonsense one can imagine. Making sense out of nonsense, thus are the jobs of Trump's disciples. Propagandists like Navarro poison the harvest. They prevent the Truth from being cultivated by continuing to plow it over with noxious manure that destroys not aids in the growth of Truth. Navarro simply shovels it more abundantly than others. It still remains bat guano as far as I'm concerned.
DD
Manhattan
14
Mr. Navarro is not much of a thinker. In 2005, he tersely refused my invitation to be a guest on my public affairs show (BlackEye on KUCI), the campus radio station (where he was a professor), to discuss the futility of an economic paradigm predicated upon the notion of eternal growth on a finite planet. If you can't address that concept, you can't be considered much of a thinker.
Subsequently, I viewed the premier of his documentary, Death By China, at the Edwards University Six, across the street from campus. As a film expert, seeing over 250 films per year in theatres since 1981, at least 30 being documentaries, it was easy for me to pick apart the shortcomings of this cheap, B-movie effort, including leaps of logic and erroneous assertions. During the post-viewing Q&A, I asked him a few pointed questions to which he failed to answer in any coherent way. He just got emotionally irritated. It is easy to dismiss this polemic sans a shred of balance on its subject. You can currently see it on YouTube.
Sycophant, indeed.
19
So what is the tariff, if there is one?
In other words...shameless sycophant is the only box that needs ticking to get a job with the Dear Leader. Yeah, we saw that right off. Old news now but nice to have factual confirmation.
Waiting on TIllerson to confirm his description of Trump now that he is free of his sycophant job description.
14
Once Hitler became Chancellor of the German Republic in 1933 his government went through a similar "search" for sycophants who were not only fanatic believers but also ruthless deliverers. This "in one month, out the next" process took about 4 to 5 years to winnow out the weak and install the cabinet and generals crazy enough to began his military conquests and initiate ethnic purification and the 1,000 year Reich plan. The resistance of democratic processes in the years 1933 to 1935 were the critical period to prevent Hitler's madness from succeeding. Unfortunately, these nascent German processes failed.
In the U.S. 2017 to 2019 are our critical years for democratic processes to prevent Trump's madness from turning our republic into a fascist state. Hopefully 250 years of democratic process are strong enough to successfully resist...
23
That is easy enough to understand, Trump intuits some absurd idea and his toadies struggle to affirm it. Nothing else matters as long as enough people believe it after true believers propagate the falsehoods. It sure would be nice to hear more skepticism from republicans about Trumps reign of power because it is very difficult to believe that a whole political party can be so detached from reality that believing something is more important than knowing something.
11
The Pennsylvania election tonight will be a good test as to whether the Democrats can win against a terrible Republican party while having no ground game, or even knowing what it is.
4
Other developed countries found a better balance with their high taxes and domestic spending. VAT is part of the equation.
In US we insist on running consumption-based economy with low taxes that is maintained by extensive borrowing. Our system is simply unsustainable. One trillion budget deficits as far as we can see in the future. Pure conservative madness.
8
When I first read that statement by Navarro, the "... his intuition is always right in these matter," I thought it must be a misquote. Turns out not. He really said that, and apart from application to a racetrack tout, that statement alone should disqualify Navarro for any position in government or industry. Even Car Jung would only give intuition a 50/50 chance of being right.
8
'Springtime for......'
Nice Producers reference.
2
Same old same old. Demagogue is still fledging....
2
There’s an assumption here about “indirect” taxation you haven’t made explicit.
Your last 7 paragraphs are among the most enlightening and important that I have read in a long time. They reveal/confirm/legitimize much of the concern many of us associate with the term "President Trump". The people in a democracy can make mistakes. I only hope we can survive the consequences of this whopper of an example of this fact.
7
November 7, 2018...So much to do!
2
Trump is lucky, not 'intuitively right'....about anything. And when his luck runs out, unfortunately ours will end as well. His election will have existential consequences for our nation.
7
So much thinking these days seems to involve nothing but logical fallacies.
“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.”
This is really no different than what a large percentage of voters indulge in, but at least a small proportion of the time it would be 'nice' to see that those making important decisions have something more than a toddler level of magical thinking and actually understand something about circular arguments.
6
I haven't read the comments, so this may well have been stated multiple times.....but as much as I hate Trump's policies, i have a problem with Dr. Krugman's explanation of why VATs don't matter....if the EU gains much of its income from a VAT, it can then reduce income taxes on corporations.....which benefits European companies but not U.S (or other non-EU) companies.....does this yield a fair marketplace?.....I'm not so sure.
Um, the 'founding fathers' thought of everything with the constitution???
2
"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."
Oh my. Thank you, Professor Krugman, for helping me maintain my sanity, for today anyway - especially after today's "breaking news" of Rex Tillerson's departure from the Tower of Babble.
5
Once again, inexperienced Jared Kushner's advice on an economic advisor was out of the mainstream. No surprise there since Jared's daddy bought his ticket into Harvard since he wasn't able to achieve entry on his own. The blind leading the blind.
8
This is why it’s so difficult to reach political compromises in today’s “fake news” world. You can’t compromise when one side is wrong on fundamental facts. They insist the sky is green and won’t change their minds, no matter how many counter-facts are presented. When one side simply ignores reality and relies on “fake facts,” there is no way to cross that bridge to nowhere.
7
One of the main underlying problems that put Trump into the WH is that history is essentially not taught in our schools anymore. Hence, most people after the baby-boomer generation do not see the eerie parallels between what is happening today in our country and in many western democracies and what happened in Europe in the late 1920-s.
5
One of the things I most admired about president Obama was when he put Biden as VP and Clinton as secretary of state. These people were his defeated opponents yet he recognized their years of experience in Washington DC would be to his advantage. He also had Republicans serving in his administration despite political differences. A true leader doesn't need to live in an echo chamber. They recognize that opposing views help them make more informed decisions.
5
It didn't start well. And it won't end well. And everything else in between won't do well either.
If Congress doesn't change hands this year, we only have ourselves to blame.
33
"But what this story misses is the fact that when German producers sell to German consumers, they also pay that 19 percent tax...In reality, a VAT...[is] basically a sales tax — a tax on German consumers — which is why VATs are considered legal by the World Trade Organization."
I admit I don't understand VAT very well. But the above para. describes it as a tax on German producers, then in the same paragraph, describes it as a tax on German consumers. Which leads me to conclude it is a tax on German producers that they 100% pass along to German consumers via increased prices. This leads me to assume, then, that the U.S. companies selling products in Europe just do the same thing--i.e., raise the prices on their products to compensate them for that 19% tax. All of which makes the VAT even more of a non-issue.
22
VAT is a tax on value is when added - hence it's name. Nobody adjusts their prices. If you work for a company in Europe - all your calculations are done sans VAT - it is quite simply a government tax imposed at the point of sale - and because it is nearly impossible to evade - some economists like to call it a money making machine. It's somewhat regressive - but this can be mitigated by making certain products and services VAT exempt (e.g. food, transport)
7
JS: "... [a VAT] is nearly impossible to evade ..."
And it is nearly impossible for consumers to see what they are being taxed, which is why governments like VATs.
If consumers can't see what they are being taxed, they can't complain about being taxed.
JS: "... [the VAT] is quite simply a government tax imposed at the point of sale ..."
You are adding to the confusion, because in the US a sales tax is computed at the time of purchase and listed as a separate line item on the sales receipt.
A VAT is added to the price BEFORE purchase -- there is no separate line item on the receipt.
One country in which VAT is for all purposes a scam is Iceland. When buying, the salespeople (nad myriad signs) tell you about the VAT refund at the airport. Once at the airport, there is a single counter and an enormous line snaking around the lobby - at least 1-2 hour wait. Most people give up. And Iceland keeps the vat. A nifty trick, this.
19
Rick Steves has a whole web page on "How to Claim VAT Refunds". There are various ways to get refunds -- too many to quote here.
How to Claim VAT Refunds
By Rick Steves
https://www.ricksteves.com/travel-tips/money/vat-refunds
Doesn't change the analysis.
1
Mr. Krugman is flat out wrong about VAT. While a VAT might not be discriminatory becauset it treats imports the same as domestically made products, it does force importers to subsidize policies that favor domestic companies. For instance, if a European government decides to offer generous social policies, allowing a domestic company to pay lower wages (eg., health care, education, childcare, housing, etc.), then the VAT helps pay for those policies. VAT helps pay for infrastructure, government research, and environmental improvements which favor domestic companies. it also allows domestic companies to pay lower taxes which are made up for by VAT, thus making their exports less expensive. Its not as if the European governments are rebating those taxes back to importers. VAT may be paid for by local citizens, but you can be sure, that none of that tax goes towards foreign companies. To think that VAT doesn't benefit domestic industries is simply ludicrous. Rather than try to incorporate this into a tariff, we would be wise to institute our own VAT. Let foreign companies help subsidize US industry!
16
When foreign goods are sold in the United States, like BMWs, we pay a sales tax among other fees. The tax and fee dollars are spent on "infrastructure, government research, and environmental improvements which favor United States' companies" and citizens. Think interstate highway system, improved ports, airports, etc. The only difference is, Germany, for example, has a higher VAT tax rate than US sales tax rates in order to provide a more stable social safety net.
If another country decides to tax its citizens more than the US to provide its companies and citizens a more secure social and
8
chip: "Its not as if the European governments are rebating those taxes back to importers."
Nor should they. Importers also benefit from all those "generous social policies" you listed, because they employ local people and use local infrastructure.
Thomas: "When foreign goods are sold in the United States, like BMWs, we pay a sales tax among other fees."
Import companies in the US are also required to pay US income taxes.
4
Mr. Krugman 's explanation of the VAT and its role is correct. Where did you get your information regarding VAT?
VAT is the European version of the sales tax we pay here in the U.S. How can you claim that VAT favors domestic companies vs foreign companies? Your claims are totally baseless.
3
The funny thing is this editorial was written before Trump fired Tillerson over Twitter. Tillerson is being replaced by a sycophant Pompeo (a support of torture mind you) and the CIA replacement is the person who authorized the destruction of the evidence that the CIA clandestinely kidnapped suspects, ran illegal prisons in foreign countries and tortured prisoners.
How are allies supposed to take replacing Secretary of State just weeks before a summit with the Kim Jong Un. I think an amateur kids' hockey team is run more smoothly than the Trump administration.
The image of America being projected abroad is certainly not the "shining city on the hill."
The only shining object at the top is the bald spot that Trump works so hard to conceal.
12
Having viewed Navarro on the "News Hour's" "Making Sense of Money" several times he seems to much of macro-ecomomic theory backwards. He appears to be obsessed with how much the US is "losing" to everyone else. This sort of thinking inevitably makes you defensive and protective, very "Trumpian" traits. It also has the effect of making trade negotiations difficult and personal, which is what is happening now with the TPP and NAFTA. We just set ourselves out to be sore losers.
8
It should be no surprise that Trump doesn't like the EU. The EU represents all that Trump dislikes, with the exception of white people. It has a social safety net which is a threat to the return to the past glories of aristocracy and feudalism; kings and emperors who who rule an adoring, obedient peasantry. They have strong democracies and they disapprove of Trump and his short sighted policies. Trump's natural allies are strongmen and bullies like himself. He may get along smashingly with North Korea's spoiled boy dictator, at least until they need to go back to shouting insults at each other.
2018 is a test of whether our democracy and institutions work. Young people, especially those in college need to vote and become active.
10
Trump is running our country in the same way he ran his company: shambolic and corrupt, relying on an inherited fortune and corrupt business practices to stay afloat. What he says goes. He is now relying on his GOP enablers in Congress (Nunes, McConnell, Ryan et al.) and the extraordinary abandonment of morals and reason by GOP constituents, to create and maintain a shambolic, incompetent, dishonest administration. This trajectory will only accelerate as competent people leave the White House to extremist, opportunistic sycophants, ala Navarro.
The GOP Congress will do nothing about the White House because they have what they want, their tax cuts and deregulation. How is this any different than the Russian oligarchs propping up Putin because he protects their interests?
The larger problem isn't Trump, it is the GOP. The GOP constituency believes all is well with the world. The skies have cleared, the sun is out, because a white Republican male is running the ship of state. What more could anyone want? They won't believe anything is amiss until we end up on the rocks, the economy in free fall, and God only knows how many more un-winnable wars. Vote in November.
18
From the beginning, none of the key White House players or cabinet members has been a bona fide economist. We're lucky that he appointed one to the Fed. But the people closet to Trump: Ross at Commerce, Mnuchin at Treasury, et. al. is trained in economic policy. They're all businessmen cum politicians, who understand transactions and keeping Trump happy, but do NOT understand the impact of policy on the economy as a whole, especially on the 95% of people who have to work, not invest, for a living.
6
Wow. Navarro’s job is to play yes man to Trump’s uneducated view of economics. What could possibly go wrong!
8
Gresham's Law is in full swing in the Trump administration: just as with two competing currencies, bad money drives out good money, so bad behavior drives out honorable behavior, and bad people drive out good people.
And Trump himself is a walking, talking embodiment of Gresham's Law. He corrupts everything he touches.
4
"And his intuition is always right in these matters."
That quote is right out of the Communist China playbook, as in, "The thoughts of Chairman Mao are always right." Our current "Ruling Party" is where democracy goes to die.
7
Nationalism is another word for war, ignorance another word for defeat.
Trump is elevating nationalism and ignorance. The enemies of our country, that is Russia, will provoke Trump into wars.
He will blunder into wars with ignorance.
2
Riddle for the day-
How do you get a Sycophant to encourage and flatter a fake Figurehead?
You make him believe that he is the one pulling the puppet strings when he is admiring himself in the mirror, which is always.
4
Trump wants 100% loyalty from all those who surround him .... and the ultimate test, you must be willing to sing his praises for a full five minutes -- without a smirk on your face, or breaking into laughter.
6
Dr. Krugman needs to modify his last sentence" This will not end well".
It is more appropriate to say instead: "This will not end well for the United States". It will, however, end well with the self dealing shameless crowd, especially the liar-in-chief, to make a huge profit after 4 years in the WH.
7
Krugman: "Soon only the shameless sycophants will be left."
That likely explains both Tillerson's termination of employment and his replacement.
4
Trump behaving exactly like you'd expect a Putin stooge to behave - go after the EU instead of Russia and China, and fire your Sec State when he makes valid criticism of Russia.
6
If Trump ends up tweeting this guy out of his job, he ought to be able to find work in Kim Jong Un's administration. He'd fit right in.
1
Syncophant is such an undeservedly suave and sophisticated term for Navarro, Pence, Conway, Sanders, et al. They are Trump Toadies.
6
Paul is right!To be a tin-pot dictator, you must destroy the agencies and barriers that hinder that. He has the henchmen/women and the GOP to accomplish that. Public schools is the best barrier we have left and DeVos is going after it.
4
Donald Trump is the prototypical RW Republican. He believes what he believes. Facts don't matter. Facts are Fake News. Anyone who tells him facts goes.
3
If we are lucky and God is on our side this will not end well for Trump. If God is indeed a vengeful god this excapade in deplorable idiocy will not end well for all Americans. I guess we now play the waiting game.
2
Navarro's PhD probably came from the print shop at Trump U
1
Actually, he has a PhD from Harvard, but the fact that he makes people THINK he has a degree from Trump U reflects poorly on UC Irvine, where he is a tenured professor.
why pick on europe? pretty simple, merkel has yet to praise our dear leader.
3
This is going to end badly? The understatement of the century, Mr. Paul. This will end catastrophically. Isn't it amusing living in Idiot Nation?
3
And then there is Mnuchin explaining that Trump "likes making funny names" on Meet The Press.And Betsy Devos describing how innercity parents(most likely cash strapped and with menial jobs) can take their children to nice charter schools across town.I shudder to think what Ben Carson is thinking.What we really have now is a bunch of out of touch billionaires tearing apart a system of government that has worked pretty well for the last 100 years and remaking it into a system which only benefits them and their kind.They have an idiot-clown at the helm to cover for them and convince those who choose to be ignorant, just how much their policies will help them.Now Rex Tillerson,the last boy scout,has been tossed by Trump.I don't blame middle income Trump supporters if the midwest for falling for this scam.I blame Republican voters in the upper 10% who should know better.
4
Did Kushner actually buy the book or just skim Navarro's name and replace it on the shelf, assuming he's ever gotten off his duff to visit a book store.
2
The country will survive this president even if he lasts 4 to 8 years and the majority of people of voting age will have learned that Michael Bloomberg was correct when he said "I know a con when I see one." In the future we will remember what the president did for us and to us.
And the majority of Americans will have learned that we never want to let a con artist close to the White House. And the best way to avoid being sucked in by such a person of low morals, low humility and low regard for anyone but himself is to start by electing congressmen and women (especially women, and men and women with spines who genuinely care about the country first and not the party first.
That way the one branch (the legislature) can serve again as the rightful bulwark to any such president who would "con" the voters.
3
Correcting the good professor: "But what this story misses is the fact that when German producers sell to German consumers, they also pay that 19 percent tax. And when U.S. producers sell to U.S. consumers, they, like German producers, don’t face any VAT."
That should read "...UN-like Gernan producers."
Dr. K had it right. German products that are exported outside the EU are not subject to VAT
I suspect the tax situation is more complicated than Krugman's simplistic explanation indicates (and certainly Navarro's) and it would probably require a case by case analysis to figure it out and even then we wouldn't know for sure. German exporters get tax rebates and American companies seem to be getting a lot of tax breaks too. Then there are subsidies. Boeing and Airbus have been adjudicating this sort of thing for a long time.
At least Germany is a country that takes care of its workers and envronment. The much bigger problem is China, and I don't see Trump taking nearly the hard line with the Chinese that he promised in his campaign.
3
Is Trump running the White House like dictator or like a CEO in chief? Sudden firings with little or no advance warning are not unusual. Every corporation has a culture, and people who don't fit in with that culture are typically let go. While there may be CEOs who welcome opposing viewpoints, they are not going to tolerate people who question their authority once they have decided on a direction.
Americans thought they wanted a businessman as President, and the fact is that top down decision making, nepotism and some, perks for those at the top of the hierarchy and a degree of sycophancy is not at all alien in corporate culture. And businesses are run for the benefit of their shareholders, with major shareholders having a much larger say than smaller ones.
So perhaps it is time to acknowledge that gov't should NOT be run like a business. And DEFINITELY one of Donald Trump's businesses.
13
Thanks for this cogent observation!
1
Not at all surprising for Trump to pick a fight with the EU. Aside from his general zero sum mercantilist view of foreign trade, he believes that Western Europe has been able to afford its social democratic welfare states only by being a parasite on US defense. On top of that, I suspect that he despises Europeans for having surrendered their colonial empires in the aftermath of World War II. In sum, he believe that it is intrinsically unfair that these French, German and Scandinavian girly men should be as prosperous as thrusting, domineering, manly Americans.
10
What continues to confound me about Trump supporters is that they think he’s populist, that he actually will act in the best interest of working citizens. I need a Trump supporter to articulate one thing he did prior to being president that actually supported working citizens. Not what he says but what the ‘billionaire’ DID that directly benefitted working class citizens, detail it and show me it’s real — absent that what we have somebody who holds rallies but that’s simply to stoke his own ego by shouting slogans or spouting attacks and ignorance.
What I ask you, implore you, each and every Trump supporter is to look at what he has done and continues to do - which is act in his own interest or the interest of those limited few who surround him.
What is the thing that he did prior to become becoming president that actually showed his unwavering support for working class citizens?
15
I hate Trump.
That said, he did rebuild the Woldman skating rink in Central Park.
Of course it won't end well, just as long as it ends. And the sooner the better. I cannot wait until working class Trump supporters file their 2018 tax returns. "What do you mean I can't deduct my state income and local property taxes, or mortgage interest, or medical expenses?"
10
Of course, that won't happen until after the 2018 elections. Unfortunately.
1
In this regard (sycophancy) are we to assume Navarro is to be joined by "we have chemistry, he thinks like me" Pompeo?
6
Mueller has to complete his investigation, dotting every i and crossing every t. He needs to completely reveal the malevolence that this vile Putin-loving buffoon, and his sycophant groupies, have imposed on the US and its leadership. For the sake of this country, and the world, this must never happen again! He’s giving succor and incentive to every extremist authoritarian leader around the world. It’s especially galling that “evangelicals” still give him majority support, even though he’s the antithesis of everything they stand for. They made a Faustian bargain to get a Supreme Court justice and whatever else fits their political and financial agenda. If Tony Perkins wants to give Trump a Stormy Daniels et al “mulligan”, he better have a duffel bag full of mulligans for every other sinner. “You get one mulligan for the first Justice....give us one more and you get 10 mulligans plus sainthood.”
8
"...willing to put in the hard work of understanding opposing views and assessing the evidence."
Trump doesn't even want to put in the hard work of understanding his OWN views.
12
That quote from Navarro seems like something from a science fiction movie in which a truth inducing ray compels the target to speak honestly instead of in political spin. We see this from time to time even from President Trump.
4
I would not be surprised if Trump looking for someone to confirm his belief that the world is flat.
4
In any other country in world where the generals take over, it is called a coup. Can the American generals find enough yes men to soothe the Donald? Obviously yes. They've replaced Tillerson with Pompero. Jarvanka will be the next to go. It is amazing that supposedly democratic Americans are looking to the generals and are grateful to them for keeping a lid on the White House chaos. Yes Mussolini did make the trains run on time, but at what price? Will this coup survive Trump's presidency?
With Tillerson gone it looks like Qatar's only hope now is the Mueller inquiry
4
Once this administration applies it's loyalty filter to anyone who walks in the door, it should be clear that the only outcome you get at the end is a cabinet full of sycophants and lots of fired people. Just what we are seeing. But where are the checks and balances? The problem here is this this filter extends well beyond the White House gate. There is an evil lurking throughout this party, and we see it daily. This morning I heard Bob Corker trumpet "he serves at the pleasure of the President" in response to the letting go of Tillerson. But not a word or rational sentence about why Tillerson is leaving, or what happened. He just gets away with playing dumb. Then you have Paul Ryan doing the same. HIs head is in the sand on everything, literally. He just keeps saying that he has no time to look. He hasn't even thought about Stormy Daniels yet, and its been the same for everything. Then, there is the House Panel, who found no collusion and tossed the FBI under the bus. They too refused to even look.
I hope we don't lose track on any of these shameless sycophants. They are all playing dumb because they are scared of something, and that something is obviously what we all need to understand clearly. I suspect they all have hands in what happened during the election. They all know everything and they also know that they will pay a price with those backing their party if they speak up. This all needs to be made public.
10
By flooding the administration with incompetents and spinning the news wheel on a daily basis, Trump guarantees his place at the top - running in place.
If he trips or something major happens, expect chaos, and not the fun Trump kind that evening talk show hosts can joke about.
It will be chaos 9/11 style, with people running in terror for their lives.
While Trump plays golf, of course.
3
This quote from Navarro reminds me of the practice of drug companies to invent or create new illnesses or disorders in order to sell their product. How convenient that Navarro consistently finds analytics that confirm what Trump thinks. The president looks for people who will peddle his version of reality, and anyone willing to prop it up slithers over to join the other zealots. What do they gain from this prostitution, other than money? Does corruption attract more corruption? Cults attract pliable mindsets and a need for worship where godliness lacks.
2
Contra Amy Chua-- this is not a matter of tribalism, but facts on the ground.
2
Let us be crystal clear. Trump is Putin's lapdog. How and why Putin has stolen our president and is on the verge of stealing our democracy with the collusion of the Republican Party is not at all mysterious. The system of criminal collaboration with oligarchs is Putin's gateway to power. He is their puppet. Parri passu, so is Trump. Our oligarchs have no fealty to representative democracy, fair and open elections and the rule of law with transparency a key feature of all political alliances through campaign finance laws that limit the amount of campaign contributions that are completely and instantly transparent. If that were the case it would unveil the source of ALL campaign contributions including those who own Republicans and for whom Trump actually works. Trump is a huckster/showman/front man for the elite. He fakes allegiance to the disposed and the marginalized. He duplicitously engages in a traitorous ablation of democracy. Trump has no integrity, no fealty to democracy nor the Constitution nor anyone other than himself. His affair with Stormy Daniels at the time of the birth of his child with Melania is but a dramatic instance of his incorrigible self centered, self aggrandizing, exploitive, parasitic and traitorous and criminal misconduct. The sycophants ignore his moral depravity and are in it to win it for themselves oblivious to their traitorous collusion with a criminal who is president.
9
Navarro's statement: “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.”
I am a data analyst. And that statement makes me ill.
9
A responsible and intelligent president would hire people who speak truth to power. Trump is the opposite of all that.
5
I get your point, but the following is some very poor writing:
"U.S. products sold in Europe have to pay VAT..."
What is that supposed to mean. I suppose it means that the U.S. companies that sell the products have to pay the VAT, not the people in Germany.
You have a Nobel Prize on Economics; you are writing in the New York Times.
How 'bout writing a little better than this. As your self-appointed English professor, this gets an F! However, I almost always agree with you, except you and all of the other so-called "liberals" fail to understand that policies like a very strong social safety net are fiscally conservative in the mid- to long-term.
They provide for a more secure middle class, greater upward mobility, greater GDP and better jobs than currently indicated by the phony 4.1% unemployment rate. Many of these jobs that account for this artificially low rate are not full-time and/or low wage jobs. Right Paul?
2
Some where in the back ground someone is playing the William Tell Overture. Will we soon be required to doff our caps when Trump passes by or his name is mentioned? Of course first they will mandate that we, the little people, wear caps.
1
Trump's recent statements about how we might consider executing drug dealers is just the most recent example of creeping Duerteism into his persona and his policies
5
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."
The white paper also cites China and Mexico, which are not in the EU. (p. 12)
More significantly, Krugman misses the point of that part of the white paper, which argues that the difference in tax systems between the US and countries using a VAT encourages US companies to move offshore.
"In addition to the obvious problem of relatively high corporate tax rates pushing American capital offshore, there is a more subtle tax problem pulling US corporations offshore." (p. 12)
The argument appears to be faulty, as Krugman makes clear, but Krugman should look more carefully at the conclusion.
1
VAT might be a wash in trade but it is a great source of tax income that we subsidize if we mostly buy industrial goods and sell agricultural ones.
1
How so? We don't pay the VAT.
3
VAT ends up being a subsidy for exports--companies don't have to put the cost of their taxes into exports--making them cheaper. American companies pay for health insurance and FICA--and must add that to the price of exports.
It is very disappointing to see this happening to America. Trump has supporters high and low in society, and often those supporters are much like him, smooth talkers with junior high school mentalities who think snide catty remarks pass for erudition, and who don't even recognize what childish ignorant people they are. Some kinds of childishness aren't bad, a sense of play, curiosity, reaching out to new experiences, adventure and knowledge. But those aren't the Trumpanzee brand of immaturity. In addition to the aforementioned faults, they include extreme self-centeredness, a tendency to use and abuse others and be indifferent to how them make others feel. I would like to see the entire Republican edifice removed from public life immediately, maybe busted on treason and RICO charges. The longer this huge pimple festers on America, the uglier it's likely to get.
16
Paul, I consider your last sentence prophetic here. I'm "d'accord," as it is my firm belief, based upon evidence presented daily in the NY Times and other legit sources, that Trump & cohorts, with full GOP approval if not acquiescence, have set into motion a twin series of events leading to both economic and nuclear catastrophe. These cataclysms are presently running parallel, but will eventually converge, leaving the USA and the world in dire straits. I truly hope I'm wrong, but indications are otherwise.
23
Machiavelli recommends that Princes must avoid making themselves hated and despised; the goodwill of the people is a better defense than any fortress. Also, Princes should choose wise advisors and avoid flatterers.
Trump doesn’t appear to have read his copy of The Prince.
17
I'm sure Trump has read his copy of Mein Kampf!
2
There was a superb WW 2 cartoon about Chicken Little, depicting Chicken Little as a dim bulb and being manipulated into a position of leadership in the flock by methods and statements reminiscent of Hitler, whispered to Chicken Little by the wolf. It suggested that to defeat an enemy or eat the chickens, one first should install an overconfident dumb guy as leader, and then lead the leader into taking his people up the creek without a paddle, or into the cave of the Big Bad Wolf. Great cartoon, and about half of America is acting like that flock of silly chickens following the dimwit leader. The cartoon, probably free on youtube, is worth a view for its implications for today.
1
Machiavelli also suggests that a Prince will have difficulty attracting wise advisors if he acts like a nincompoop. Not exactly Machiavelli’s choice of words, but you get the point.
1
Kudos to Dr. Krugman. In light of his description of Navarro; and the surprise firing
of Secretary Tillerson this morning; and the nomination of Mike Pompeo, it appears that Paul Krugman called it exactly right. After Trump callously and with a complete lack of grace and courage threw Secretary Tillerson under that bus, it appears that Trump is one step closer to the sycophantic cabinet he seeks. I was not originally a great fan of Tillerson, but he did a very creditable job and deserves our thanks. Unfortunately, for us, one quality among many good ones that Tillerson possesses is integrity. That is a quality not prized in the White House.
I fear for the country. Truly. We are now led by opportunists, conmen, shysters and maybe thieves.
Not good. Perhaps we should just give up the pretense and rename Washington DC the
“Kremlin-on-the-Potomac.” How is sycophant spelled in Russian? T-R-U-M-P.
24
"Since when has it become acceptable to declare that Dear Leader is infallible?" Since George W. Bush (at least in modern history). Please recall the number of times we (who'd lived in more Republican areas of the country) that to disagree with the president was tantamount to treason. We of course would quote Theodore Roosevelt (he of the "To never question the president is essentially both servile and un-American" fame) and try to walk away without having a gun shoved in our faces. Nevertheless, this sort of thing is of recent development. (at least that I've noticed in my nearly 6 full decades of experience) No one can claim liberals make such statements as arguing is inherent to our ideology, especially with one another. I'm not yet willing to take the step that it's a Republican (not conservative, which is much broader) psychological quirk, but at least the majority of the most fervent supporters of the past 2 Republican presidents have manifested this particularly counterproductive personality trait.
18
Dr. Krugman, I want to hear your ideas about the next bubble. Please write about that, SOON. Thanks
6
One nation, under trump, with ignorance, intolerance and arrogance for all.
21
It's fairly obvious that "trumpism" is the euphemism for dictator. There's no secret that the Donald is seriously envious of both Putin and Xi who both are now President for life in their countries. trump's well known statement that he distains the two term rule for US Presidents. The only obstacle to abolish this rule is the voters in the upcoming November midterms and beyond that the general elections in 2020. If anyone thinks that this notion is nonsense, look no further than how he got the electoral college appointment. This antiquated part of our Constitution should have been thrown out after the Civil War when the 13, 14, and 15th amendments were enacted. Dictators are always right and those people who are around them, i. e. 'Yes Men' Sycophants are only too willing to find ways to prove the dictator right: Regardless of the actual facts.
12
During this "Springtime for Sycophants," more individuals like Schwaub, a spokesperson for ICE who resigned rather than espouse untruths on behalf of the current administration, need to take a stand. Without these courageous people we are lambs to the slaughter.
21
Navarro's statement: “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.”
This is no surprise, while most people suffer from confirmation bias, this is pretty much the GOP's modus operandi on everything. Just go find the "facts" that support their beliefs and ignore everything else. The GOP certainly doesn't care about reality.
16
Another example of the dangerous position the trump presidency has placed our country. I'm fearful of this as an example of the step by step means by which we are being led to a complete violation of the Constitution. Is this the best way to avoid this catastrophe, write article after article on trump's malfeasance that show his treachery, addressed to an elite that already understands, if not the details, but the dangers of a trump administration. Or should we propose, every day, in every way, an agenda that will unseat him and his tribe in the next elections by appealing to the undecided voters who foolishly
voted him into office? Mr. Krugman today informed the intelligent of another short step trump has led us on the road to tyranny, when what can
really change this awful situation is to propose an agenda that will attract those voters and offer a way out of the deteriorated situation brought about by the Clinton-Obama administrations that chased voters into the arms of trump, and return to a policy that truly promises a better life for the people: a 15$ minimum wage, health-care for all, control of the runaway banks, free tuition in state colleges. Otherwise Mr. Krugman, and the NY Times will be relegated to the level of just Interesting reading, and the country will go to hell.
3
The primary American sycophant is the puppet dummy stooge that Vladimir Vladimirovich Putin has installed in the Oval Office of the White House. Donald John Trump's snarling, snarky and sneaking performance regularly and routinely puts a smile and smirk on Czar Putin's face along with a twinkle in his eye.
15
Hi Paul, it is "Fearless Leader", not "Dear Leader". (Where are Boris and Natasha when you need them ...)
6
Trump, a fool who gladly suffers other fools.
4
And his intuition is always right in these matters.” Wow." In Nazi Germany there was a saying: "Hitler hat immer Recht" Hitler is always right.
So now we have come to that shopworn notion of a supreme leader once again!!!
19
I have difficulty with the statement -
"In reality, a VAT has nothing to do with competitive advantage; it’s basically a sales tax — a tax on German consumers — which is why VATs are considered legal by the World Trade Organization."
The United States pays this VAT on imports, just as if every American consumer was living in Germany, and in all other nations with a VAT, increasing the end cost to the consumer by the VAT rate, which for England is 20%, see following link showing worldwide VAT tax rates, taken from the United States Council for International Business, https://www.uscib.org/valueadded-taxes-vat-ud-1676/
Add to that the sales tax paid by United States consumers, and we end up with nearly a 30% tax in many areas.
How is it logical to cavalierly dismiss this reality, knowing full well that consumers of our goods, internationally, do not have this egregious burden of a VAT.
In my opinion, and in the opinion of tens of millions of others, our products sold internationally are discounted, by not having a reciprocal VAT equal to that applied to imports into our nation.
While I abhor much of the authoritarian nature of Trump, his policies, his cabinet, and Republicans in government, imposing tarrifs to level the international economic playing field is beneficial, and puts everyone on notice that we are no longer willing to be the economic patsie inviting never-ending rape.
And the WTO is not operating fairly in dealing with the concerns of the United States.
1
I think you need to read up and how the VAT is treated under WTO rules. US consumers of European goods do not pay the VAT, because VAT nations give exporters a rebate, in order to level the playing field. US exports are charged the VAT, once again, to level the playing field. In terms of competition: (1) in Europe US exports (with VAT) compete against domestically produced European goods (with VAT); (2) In the US European exports (without the VAT) compete against domestically produced US goods (without the VAT). Trump has stated publicly that this treatment in effect is a double penalty against the US, with the VAT rebate on foreign exports (say 20%) and the chargeing of the VAT to US imports (say 20%) amounting to a 40% tariff. He apparently gets this misunderstanding from Navarro.
2
Hi, how do American consumers pay the VAT on goods produced in Germany?
In Canada we have a GST which is federal at 5%.
If I import goods I pay the GST because I am consuming them in Canada.
If an American imports goods from Canada, they don't pay GST because they're consuming the goods in America.
Same for goods from Germany, Americans don't pay VAT.
2
Go back and read Krugman's piece again. VAT is a tax every buyer in the EU, pays irrespective where those goods were produced. When I was in France last year, American goods were not significantly more expensive that EU goods. the EU is a very good market for American goods.
3
1) Governing is about pendulum swings. The George W. Bush administration was led by a very top-down organizational chart. Access to Bush was deemed by many critics to be too controlled; often preventing the free flow of information to Bush/Cheney, and their top lieutenants. 2) Given the costly cumulative domestic economic and foreign policy mistakes of the Bush administration, with Bush described by the media as being in his insular "bubble," the Obama Administration was elected with a platform signaling more diverse views would reach its leadership. A book trumpeting the diversity of views represented by Lincoln's cabinet was a leading paradigm for, and endorsed, by the incoming Obama/Biden team. 3) The Trump Administration represented a change to real business acumen and practicality to replace Obama's "Ivy League" theoreticians. 4) The growing disparity in the income and wealth distributions under the Bush and Obama Administrations led to resentment and anxiety for a large, former middle-class minority who are now disillusioned economically. 5) The tax cuts may be a temporary analgesic buying short-term relief at the cost of longer economic disruptions. In the short-term, with significant economic dissatisfaction, bets on short-term jobs relief and "other ephemeral deals" often triumph over a well-formulated, longer-term economic solution.
[JJL Tu 3/13/2018 11:35am Greenville NC]
3
How very prescient.
Just wondering, are any U.S. businesses complaining about unfair E.U. trade practices?
Trump is an egotist thus he requires sycophants to issue constant praise to his easily hurt feelings. He will also lash out at people who do not agree with him. The need to do these things displays extreme insecurity.
There are lots of people in our society like this, and sometimes our presidents have displayed these tendencies. But Trump's extreme narcissism has the power to destroy democracy itself. If you don't believe this just look at every horrifying authoritarian ruler that has disgraced our world.
3
How ironic as I read this column Rex is out and the syncophant Pompero is in
4
He is compelled to punish Europe because they make it obvious that they continue to respect Obama.
9
This explains why Trump “fires” (actually a release from dullsville prison) so many people. The hosannas eventually run out.
2
At least Navarro is restricted to being a sycophant by his apparent lack of analytical talent. That makes him a shade less dangerous than the sophists on the Supreme Court.
11
Just adding my usual anti-Christian note. Like an ex-smoker can't stand cigarette smoke anymore, so as time goes by (I'm) 72) I see the Christian iniquity building up.
For decades the "Churches of the Republican Way" have groveled before the wealthy. They routinely now endorse "Money-Changers" as they vote for an economic philosophy that BLAMES THE POOR FOR THEIR POVERTY!
Not even getting in to their constant militarization, jail stuffing and destruction of environment.
13
"This will not end well." That is an understatement for sure! Every day is chaos with the enactment of reactionary idiocy. Suggesting that Trump's "intuition" is right about anything is wacko for Trump appears to know nothing about anything concerning governance. We are in uncharted waters, as Sinclar Lewis reportedly said, "Fascism will come to America wrapped in the Flag and carrying a Cross!" It has arrived, now we are going to have military parades!
7
"... sycophants who tell the boss what he wants to hear..."
Future historians of the Trump years in the White House will simply have to disregard all the falsehoods and lies emanating from this ill-equipped president and his overwhelmed underlings. Sad to say.
4
That the Manchurian Candidate was elected is less surprising than the fact that there are at least a third of the people in this country who think that and what he's done since are OK.
9
How do we stop this obvious path toward Tin-pot Dictatorship?
6
Now Tillerson is out. This is what a coup looks and feels like from the inside.
8
Trump needs to open a "Secretary of Moral and Ethics" and hire a porno actress; that will complete the circle.
Like a cartoon in "The New Yorker" years ago: there were two fat men smoking a cigar, drink in hand, in a club, and one, with a big smile comments to the other "I never met a yes man that I did not like." There!
4
I watched this idiot Navarro doing his darnedest to explain the sheer stable genius of the Trump economic philosophy. Sorry, Pete, just ain't buying your snake oil. It smells too much like Trump's eau de toilettes. For one thing, Trump has no philosophy. His only philosophy is dictated by a barometer of what will produce for him the big numbers, what will sell. More aptly, what ridiculous scheme can Trump conjure up and bowl over an unsuspecting public with. Are they foolish enough? Will they buy his nonsense? If Trump tells them to trust him, how long will that scam fly before the public wises up? By then, Trump usually has made his money, and flown the coop, leaving damage control to those who got caught up in his malarkey, and a trail of losers who stuck with the stable genius too long.
DD
Manhattan
8
This is all very true, but if Navarro disagreed with Trump, Trump would just find someone else. We saw this with Hitler, Stalin and other autocrats. This is all very unfair to Navarro, although I guess one could argue he isn't facing a firing squad if he didn't toady. Still, he has a family to support. Freedom! And family values!!
2
I really do fear for this once great country. I'm old enough to have seen the greatness and the not so great of America. This guy in the white house now is clearly a threat to this democracy now and going forward. So many people are blind to who the man is. I watched part of his speech in PA. the other day, what a fool and complete idiot we now have. I still can't believe we call this very dangerous man the President of these United States. May God help us if he ever gets another term.
4
In the land of the blind, the one eyed man is King. That is the apt description of The Donald's WHITEhouse. Only toadies can work long time for The Donald, so a toadie with a PHD is a very hot commodity in the House of know nothings.
The day is coming when The Donald is gong to consider bankrupting the USA just to get one over on his detractors.
4
I used to think a degree from Harvard meant something--you know, like intelligence, integrity, the quest for truth and honor. The list of Harvard grads--including Navarro and his PhD--that are shoveling manure for Trump has totally changed my opinion.
11
Speaking of sycophants, Devin Nunes sure delivered as expected.
11
At least a third of our country is ready to accept Trump as dictator. The republicans haven't believed in the constitution for a long time. The evangelicals have always wanted a strong man.
During the revolution there was a large segment of people who backed the king and that hasn't changed.
We haven't been a democracy for a long time. The people who want a king have more influence with their vote than the rest of us. It's because of our system of government where the mid-west votes count much more than the coastal votes.
The corporate world has never wanted a democracy. They've always believed they should rule.
8
While in Paris, several years ago, I bought eyeglasses and received documentation that confirmed the VAT. We took the documentation to a nearby office with our Passports and the VAT was refunded.
This small example is exactly what Krugman suggests, nothing more and nothing less.
Obviously, Navarro and Trump lack the understanding of what a VAT is in regard to America.
6
The most dangerous and disastrous thing about Trump is not his ignorance about issues but his ignorance about his ignorance of the issues.
6
I'm no insider, but Tim Kaine is, so this AM when I heard him say that our proposed Sec of State, Mike Pompeo, is someone who has favored war over diplomacy, it sent a chill down my spine. Trump is not above starting a war simply so his minions can call those who oppose him traitors. Lord, it is painful to watch this country swirling into the drain.
13
I would like more economics on tariffs and Navarro's "nonmainstream views" in this or a future column. I'm 100% behind all the views about sycophants and the story of how Navarro got to the White House, as amusing as it sounds, in a ridiculous way. Nothing surprises me about our Dear Leader and his people. How to manage the fluidity of people in and out of this White House, the thin level of knowledge, the lack of depth in the cabinet from DeVos to Carson to our own former dear leader, Rick Perry, is breathtaking. Today's election in PA can be a signal, I hope. And yes, as Harry says, November's a long way off.
4
Trump told son in law Jared find me some crank with a Ph.D., who will swear to my lies. His starting point is that Donald Trump is infallible. After he finishes on the tariffs get him working in the master race.
3
This is an important point when discussing how much corporations are taxes. U.S. conservatives often point out that Europe's corporation taxes are lower, arguing that's why companies move their HQs to Europe, but you never hear them mention Europe's VATs, which make up the difference. Just try to offer to support lower corporation taxes in return for adding a U.S. VAT and you know exactly what conservatives would say. They welcome lower corporation taxes, but fold their arms and shake their heads at adding a VAT. This is especially curious considering their positive reception of Trump's tariffs. No new taxes? What do they think tariffs are?
5
I think Dr. Krugman fails to recognize changing times.
He still seems to insist on seeing the Global Economy as a simplistic unicellular function economy.....and not as a much more complex network of various trading partners that alternately cooperate and compete.
Brexit.....represents a new evolution of what was once known as the British Empire. Brexit unleashes those Accountants on Fleet Street to cobble the Commonwealth of Nations....that most British construction used to salvage the remains of the Empire....back into a major trading network....complete with a common language, common set of laws, a common banking system, and possibly a common monetary system that adapts quite well to electronic transactions......
NAFTA.....although the Bushes and the Clintons attempted to sabotage it....and although the Media still doesnt grasp the signifigance and genius of this Reagan Era Plan......NAFTA may just save North America's bacon. And it looks as though the Trump Admin understands this. Next move will likely include pulling Cuba into NAFTA. It would be wise to consider taking over Hispanola(Haiti and DR) and running that island as a US protectorate inside of NAFTA too......this is vital to US national defense......otherwise the Chinese Navy is parked at our southern exposure.
1
So the VAT is just like the much-maligned medical device tax; it only applies to items sold within the taxing country but doesn’t apply to exports from that country. Its purpose is to raise revenue and does operate to the favor one company over any other company, foreign or domestic. Now, if only our spineless senators could understand that… or maybe if they weren’t bought off by the medical device manufacturers…. But that is as likely as Navarro speaking truth to power.
2
Excellent - thank you - as Trump continues to amass his team of ego-flattering, weak-willed opportunists it is imperative that this tin pot regime be exposed consistently and constantly. Please continue, never give up !
3
The Russia connection with Trump's trade biases is key, here. He vilifies the EU every chance he gets, scoring Putin points. Clearly, Trump covets those points, at our peril. Tillerson finally said it like it is about Russia, after he was fired!
10
Missing from Krugmann's analysis is the effect of taxes on corporations, to the extent that these replace the VAT. If a US corporation pays an income or similar tax on its production and this exceeds the tax paid by an EU corporation, that is a tax that US corporations pay and foreign corporations do not. To the extent that the EU replaces this tax by the VAT, that is reasonably viewed as a tariff on US production.
Now that taxes on US corporations have been replaced by deficits, this is a false analysis, and the shoe is on the other foot. Dollars will become useless and to the extent that these are held by the EU, we are taxing the EU, not the other way around.
1
Yes, Paul, as you conclude, "this will not end well." You, of all people though, should recognize that the de-democratization, or subversion, of American democracy began with the computerization of the vote counting process c. 2002.
It was at that point that -- lured by the seductions of ease, speed, convenience, and entertainment -- we outsourced this bedrock protocol of our democracy to a handful of highly partisan private vendors and committed the counting of our votes to the partisan, proprietary, pitch-dark of cyberspace.
The rest, as they say, is history. But you were there for the first malodorous presidential election in 2004, when the votes of Ohio were sent out to the servers of Karl Rove's IT guru Mike Connell in Chattanooga Tennessee, and the results "flipped" as hundreds of thousands of evangelicals supposedly rushed out to vote after dinner.
You didn't like the smell of that or the rest of the anomalies and disparities offered up by that election -- and you researched and wrote about it briefly. Then, like every other member of your profession, you clammed up, turned to other things.
The political veer of the computerized vote counting era culminated in Trump, but Trump can be the villain he is with impunity only because the infrastructure of American politics has been taken over by the radical right.
This is -- in part at least -- your fault, and that of all who have failed to recognize the danger. And yes, it will not end well.
3
‘This won’t end well’. The writing is on the wall. We are taking practical precautionary measures in anticipation of the coming storm; Decrease spending while increasing savings; adopting a minimalist lifestyle; buying gold; eliminating debt....everything you would do to prep for a depression.
1
Mr. Navarro should remember what happened to John Mitchell. Nixon's Attorney General, Mr. Mitchell also held that his function was First, to completely support the President's views...no matter what, and second, to ensure the President's re-election...no matter what. And he said that to the Watergate Committee. Loyalty is good, but sycophants don't finish well in Washington. It may take a while, but they always finish with destroyed reputations and often finish with being booted from their profession.
4
It hasn't started well, gone well nor will end well is correct. But if America is to survive as a free country, we must defeat them.
3
Don’t forget that Bannon’s new project is to support ultra-rightists in Europe. I wouldn’t be surprised if there’s a connection. Conservatives have always hated that Europe’s social welfare policies have been successful.
3
"Provide the underlying analytics that confirm his intuition" is the very definition of fake thinking.
1
I'll say it again, "He's gonna run out of people to 'hire.' I've been counting down from 326,059,414, as of yesterday.
1
If you don't look at what happens to VATs after they are collected, you're doing a sloppy analysis of their effect. Sure, if German and US producers have to pay the same VAT in Zimbabwe -- where the VAT is used domestically and never heard from again by Germans or Americans -- it's a level playing field.
But if they pay the same VAT in Germany, you need to ask, what happens to it? If the man behind the curtain is refunding the VAT to German producers, they're not really paying the VAT, and your "analysis" is a joke and you've been conned.
Capital is internationally mobile; there is tremendous pressure to have very efficient spending on costs of production. If you don't, your competitors will take market share from you or your profit will drop and you'll have difficulty getting new capital funds.
But if you can get things that are, economically, part of your production costs to be, financially, provided as a government service funded by something outside of your production stream -- like VAT applied to imports -- that takes off some of the pressure on your costs of production. If all your competitors have similar hidden subsidies, level playing field.
But if they don't ...
I guess I must be missing something because I don't have a Nobel Memorial Prize in Economics for my work on international trade. But I really am missing it.
how much does an American auto maker spend, per vehicle it produces, for the health and retirement benefits of its workforce... v how much does a European maker spend?
one way or another, things get paid for through taxes, but the payers and the way they frame the story to their own advantage is what's really the point of the VAT v corporate tax rate discussion.
1
While his base still cheers him on.
3
I am afraid there is another reason, beyond Putin, why Trump has Europe in his gunsights. Increasingly, Trump seems animated by a desire to punish anyone or any group that does not acknowledge his superiority. This is different from how Krugman uses the word sycophancy, to mean always agreeing with policy. Trump doesn't seem to do policy, at least beyond the bumper-sticker level. Trump seems to be all about personal competition and hatred of anyone who might be held in higher esteem than him. Of course Obama is his primary demon, but there are many smaller targets. I think that by now Trump has gotten it that Europeans do not respect him. Even worse, Europeans mostly prefer Obama.
4
What what we have here is the basis of a Farce which can now open on Broadway after it’s run in DC.
2
Putin is "an enemy of freedom?" He is the one who let the Crimeans get back into Russia -- which is what over 90% of them wanted. It was the West, not Putin, who was against democracy there.
Trump, like many politicians, is prone to fealty, adoration and worship by sycophants and enablers. That does not make him unique among those in his present profession. What does make him unique is the extent to which he willingly disowns reality, ignores facts and disavows his own utterances, generally in short order, relying on others' public displays of affection to massage his ego.
There is often a very fine line between an over-inflated ego, like Trump's, and a overpowering sense of insecurity which, paradoxically, seems to describe Trump as well. That makes him even more susceptible to toadying, stroking and flattery, even when it is transparent to the point of ridicule.
It may be springtime for sycophants, but it is wintertime for rational policy-making, and its downright chilling.
171
It’s now just amusing to watch Amerca pivot like some neglected carnival ride.
First your eye starts to pick up iregularity in some basic element of the machinery - something looks off.
Then you start to hear the metalic repeating sound of something that’s obviously off kilter.
The rotation of various parts changes from regular to irregular and the momentum of the moving pieces keeps pulling them further out of tune.
And then you see the panic on the faces of the people strapped into their seats on the ride.
Panic turns to terror and somebody screams as the screech of rending metal creates the expectation of the terrible crash you know is coming.
That’s America now. Terrifyingly lurching out of the control of its Carnie-folk operators. And now we’re all fascinated by the unfolding scene of irrecoverable disaster. It’s like HBO doing a disaster-flick sequel to ‘The West Wing’.
I’m relatively safe from the danger of flying debris down here in the South Pacific. But you Americans! Boy! You are strapped in your seats. Soon enough, you ARE the debris. And none of you have the guts to even try to pull the plug.
The lesson each thinking American should have at the front of their mind is, “This is all my fault. I let this happen.”
And that goes double for Krugman.
You all let this happen and now you’re going to sit and watch it get worse.
Trump will be starting a war sometime next year to get himself re-elected. Are you going to let your children ride that merry-go-round?
3
ok Navarro is a suckup but Krugman's analysis of the VAT is flat out wrong. If German car makers had to pay 19% tax on every vehicle they sold into the U.S. market it would make exporting here exactly 19% less profitable for them. So simply comparing it to their home market does not do justice to the issue. Yes some car makers have factories here in the US and make certain vehicles here. But for autos manufactured in Europe and sold into the US market we are certainly a more attractive export market for them than they are for us. Period.
3
The idea of a tariff is to make domestic production more competitive, making the foreign goods more expensive. A VAT doesn't do that. So an imported U.S. car in Germany faces the same 19% VAT that a German-produced car does. There is no trade impact.
A German car coming to the U.S. faces no VAT, so the issue is moot on that side as well.
1
I don't believe you are correct. The value added tax is very much like a sales tax. The cars sold in Europe include a VAT, whether they are manufactured in Europe or in the US. The cars sold in the US include a sales tax, whether they are made in the US or in Europe. The real difference is that the US consumers see the tax, and European consumers don't: it's already added to the price, so there is no separate tax added at sale.
4
Pono, surely you mean “Nobel Prize Winning Economist, Dr. Paul Krugman” (who won said prize for work on international trade), not just “Krugman.”
It was clear from the get-go that Trump's conception of what being President entailed, and his understanding of the issues he campaigned on were pathetically inadequate and that he is the ultimate incompetent who doesn't understand how incompetent he is.
Way to many people have been avoiding stating this outright, instead pretending that Trump might "grow" in the office, or at least come to some understanding of how little he knows and surround himself with people with experience.
But that would mean that Trump would be capable of acknowledging that he was totally unqualified to run for office, which it was clear he wouldn't do. Tillerson can best serve the country now by confirming what many know - that he is not fit for the office.
12
"Tillerson can best serve the country now by confirming what many know - that he is not fit for the office."
Are you kidding?
Tillerson only cares about oil deals especially with Russia and decimating the state department.
He may be compromised like trump.
1
It's true that the EU has a VAT (a sales tax on goods); it's also true that both Canada and New Zealand have a more modern GST (tax on sales of both goods and services). The USA is alone among the advanced economies in the OECD in not having any such national consumption tax.
When Canada instituted tax reform in 1988 (on a "tax revenue neutral" basis - unlike the recent tax reform "giveaway" in the USA), we decided to lower our personal and corporate income tax rates and to introduce a GST. Why? First, it levelled the playing field for domestic production compared to low tax regime imports. But, second, a tax that automatically reflected increased consumption was felt to be the ideal tax with which to fund increasing Medicare expenditures. So, it has turned out.
Naturally, there is a low income personal GST tax credit in Canada so the consumption tax burden doesn't fall unduly on low income families. The GST is not popular in Canada; but the universal Medicare it largely funds is.
12
“This will not end well”... how can it unfold any other way? Any chance whatsoever of a ‘decent’ ending? I can’t believe I lived through the ‘good ole times’ of the early 21st century. The Republicans are going to eat the revenge of all good men that survive the Neanderthal Years, and there are more of them than the uneducated rant of the filth that’s been exposed, the racist, unthinking horror of stupid that Trump is and represents. God, these are awefuk times to be witnessing in.
15
Paul nails it but his comments are a bit too narrow. Devin Nevis and his Republican co-sycophants on the Intelligence committee are co-conspirators and collaborators in Treason. When World War II ended the French shaved the heads of female collaborators and shot the men who were collaborators with the Nazis. These congressmen are of the same ilk.
Trump is and remains an Manchurian Candidate who like Mini Me and Captain Evil is a stooge for Putin. Trump has been compromised by the Russians and each of his every actions are designed to undermine the United States as a neutralizing force against Russian Hegemony.
Now his idealized friend Vladimir has poisoned an ex-patriot Russian Spy and his daughter. Where is Trumps outrage at this invasion of our ally? What does he focus our attention on? The head of meet the press "sleepy eyed Chuck? Maxine Waters ? Who does he direct his venom at ? People who challenge his fragile ego. He has and will continue to destroy the Republican party as his sycophants cooperate with his "agenda" Remember the agenda is " Dis-empower the US Empower Russia. Putin has order Kim Jung Un to make Trump look more valuable to the citizens so we can further destroy the US.
God help the USA.
14
Mr. Navarro serves his capricious, ignorant , tantrums filled toddler boss , not the interest of the American people.
He is a true sycophant .
17
Navarro is such a nice Spanish name and this guy is such a nuisance.
2
Will Dear Leader accuse Rex Tillerson of treason for daring to criticize brother in money laundering Vladimir Putin?
Lots of jobs available today for food tasters.
Yes, Lock Tillerson up, Lock Tillerson Up. Contradicting Dear Leader sounds like treason to me. To the gulag and uranium mines for him, and afterwards a trial. Held in the Lubyanka after persuasive methods have been applied.
The only way you can prove beyond a doubt your patriotism in this administration is to be fired and cooperate with Mr. Muller.
What tales does Mr. Tillerson have to tell Mr. Muller? Has that conversation been exposed, and is that perhaps the real reason for termination?
9
Paul is so circumspect in his criticisms. The good Doctor stays so rooted to the facts. I admire his self control.
But for my own part, I am so repulsed by his spiritual and psychic ugliness, his obscene and pornoraphic self deception and self promotion that I can not stop at the water's edge of intellectual and knowledge deficits. The utterly grotesque and violating nature of his speeches at rallies is too nauseating and personally violating I cannot stop there. He is a walking talking assault on our American soul. His rally speeches are soul murder. They are a deeply indecent violation of people's innocence and goodness.
That Ryan and McConnell stand by in silence, in silent complicity is stain and degradation of their souls they will never be able to undo. This is cultural and intellectual riff raff dragging our culture and us down into the gutter.
Those rally speeches like in PA last night should be more than enough for them to demand is resignation.
In a sick and extremely perverse way he now violates us on a daily basis, courtesy of a mainstream media who lacks the backbone and needs the ratings to stream this political porn into our homes every single day.
Unconscionable.
19
Only the "Best People," from wife beaters, to climate deniers, to defenders of Neo Nazis. So now we have an Economist who says about Trump: “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.”
This shows Peter Navarro does not even understand what his job is...Unless he thinks he is already working for Comrade Trump in a totalitarian state.
17
This reminds me the quote from a Belgian politician "Quand les dégoûtés seront partis, il ne restera plus que les dégoûtants". It can translates as: when those disgusted are gone, there will be nobody left but the disgusting ones. Spot on Mr Krugman.
17
Brown noser...its a better word
8
I'm sorry to go there, but Peter Navarro is Trump's fluffer.
11
When I fist saw the headline, I thought that Paul was coming out AGAINST his peers here at the Times for abandoning journalistic ethics and agreeing to reduce themselves to simple propagandists for the hate-war against Trump.
The column cites facts more than propaganda. But, I suppose you believe that VATs are tariffs and that Navarro's ridiculous statement to Bloomberg News is an example of "fake news." What you describe as a "hate war" might also be described as a mass of patriotic United States citizens rushing to defend the country from the massive assault on the rule of law, on freedom of speech, on the press, on environmental protections, on specific races of people, etcetera ad most severe nauseum, that this administration is perpetrating against its own populace for the benefit of the very few; and in the case of journalists, this is done via simply reporting the facts of the administration's own actions, both public and deliberately less so, and by following the money AND the ideas that are becoming policy, such as Navarro's.
Oh, Trump deserves all the hate you can carry, publish, haul in a fleet of cargo ships, etc. He's making me think right now about an episode of Courage The Cowardly Dog in which some sort of demon starts taking over the house and only whimpering trembling Courage has the perception and reserves of strength to deal with the problem. In this situation, the demon is Trump tho he has many minions, many demonettes in places like Congress.
But...but..."I have the best people..." Just another pigment of DJT's unbridled imagination.
3
These Trump schmos are even less informed and ignorant than one would expect - didn’t they at least see one documentary or movie about the rise of Hitler where their forbears are grinning at rallies and eventually but surely strung up at Nuremberg years later? God willing.
11
Anything done to weaken the EU fits right into the playbook that Vlady gave to Donald Trump.
11
The EU is also a target of Bannon.
5
The transparent fawning of the entire Cabinet and the GOP Congressional leadership is “nauseating”, but, it is horrorfiying to see 40% of voters support Trump despite the kowtowing. Sure, some are just wealthy cynics eager to rake in all the money to be had from tax cuts and de-regulation of banks, Wall St, environmental degradation, and predatory healthcare. They are a small inspirational minority to many “wanna be rich” deluded. So who’s left? The “new” “Moral Minority” that doesn’t mind the 20 or so women who accuse Trump of assault or harassment, or his bragging about sexual assault, or affairs with a porn star and a playboy bunny, or his bankruptcies, fake College, failed businesses, and unrelenting lies?Maybe the angry unemployed or underemployed or underpaid who hope that Trump’s antics will get them a raise, a job? How many are racists, xenophobes, white male supremacists, neo-Nazis, and owners of AR15s? Or those who believe that women are subordinate to fetuses, that zygotes are persons with souls, that sex ed and birth control interfere with “God’s plan”, that believe that their beliefs should be imposed upon all Americans?
Should Democrats/Liberals/Progressives compromise reason and science and equality to win? Right now Dems are pealing off to vote to deregulate banks, deny gun regulation, and “establish” religious beliefs over the privacy rights and choices of women.They must decide to represent us all or become sycophants themselves.
8
It is one thing for people in the administration to be gutless sycophants. What is stunning is watching congressional republicans lining up to worship this madman.
Almost as painful is watching the NYT try to report discord in DC as though both parties are equally to blame. #pathetic
6
It is certainly odd given that, according to Wikipedia, Navarro is..
a professor emeritus of economics and public policy at the Paul Merage School of Business, University of California, Irvine, Navarro is the author of over a dozen books, including Death by China. A liberal and environmental activist,[2][3] he is a member of the Democratic Party.[4][5][6][7][8].
Go figure...
It would seem as if there must be back channels of communication between
Navarro and economists within the democrat party sphere of
influence with whom the type of odd reasoning cited in PK's column
could be worked out in an intellectually respectable manner...
So far, however, this does not yet seem to have surfaced.
But maybe he can do wonders, sooner than later, about getting il duce to respond to climate change???
Is trump really this STOOPID or is he playing us for chumps? Do none of his advisors and supporters understand state sales taxes? I'm a bit incredulous that trump and his advisors are that dumb. I just finished doing my taxes. The Massachusetts tax form asked if I made any purchases out of state to avoid paying state sales tax. My husband purchased a Harley Davidson motorcycle in the summer of 2017. He paid $1200 in sales tax. When he bought his Japanese motorcycle in 2014 he paid the same percentage of sales tax, 6.25%, on that purchase. When our son bought his Chevy SUV he paid a 6.25% sales tax. When we bought our Toyota Prius we paid the same 6.25% sales tax. We just bought a Samsung washing machine and paid the 6.25% sales tax!! Again are he and his administration this stoopid??? I have my doubts but it makes another great campaign rally slogan. trump stated that he loved the uneducated and they wildly cheered. It seems that they're living up to his characterization if they believe this latest blatant distortion of what is truth. Their prideful ignorance, (something to truly be proud of?), will lead to the total destruction of our country, starting with our economy and ending with our democracy, November can't come soon enough but in retrospect November might already be too late to save our country from this dangerous and destructive "president" and his willing sycophants. Will the voters wise up? I truly have my doubts.
7
"Since when has it become acceptable to declare that Dear Leader is infallible?"
I dunno, but it seems to be spreading. Witness yesterday's pathetic information release by the GOP that found Russian interference in the 2016 election but no favoritism for Trump. Seriously! It takes a gargantuan leap of faith (or lack of logic) to be able to conclude that, why, yes, the Russkis interfered in our election but they had no clear aim in those efforts. In the grand scheme of things, this Navarro guy is just another bit player - a useful idiot - in GOP's efforts to consolidate power and turn this country into a banana republic with one party rule.
6
So this is what a world run by dictator billionaires looks like. The new rules include:
(1) The facts are what [fill in name here], our dear leader, says they are.
(2) Everyone must respect and endlessly praise dear leader.
(3) And never, ever contradict anything dear leader proclaims to be the truth.
Other than the above, please continue with your daily activities and remember to smile.
8
What is the antonym of sycophant? Complimentary. It goes both ways. How about a pinch of objectivity occasionally?
these clowns were always there - they were just waiting for their fearless leader the big clown to take control.
2
As I stated many times before in NY Times blogs; Trump is a cancer who infects everything he touches and rots it away! Vote an entire Democratic ticket this coming Fall and hope his buddy Russians don’t hack the vote!
8
Okay, so another wacko takes the place of the last wacko. 2 years 10 months unless we win the senate. This stuff isn't stopping. DeVos, Navarro, Pruitt, Zinke, Sessions, all throwing the country for a loop.
2
Is is kind of interesting that our consumption-based economic system, driven by low taxes and constant borrowing (that's where the debt comes from) to fuel consumption, is so inefficient. Canada and most European countries with their high taxes systems are much more efficient and economically stable.
U.S exports to the E.U. may enjoy a 3% tariff on average. But averages can be misleading. Just for the record, U.S. cars exported to the E.U. are hit with a 10% tariff compared to 2,5% for E.U. cars entering the U.S. This difference puts U.S. auto producers at an obvious disadvantage. However, Trump chose not to pursue further the Transatlantic Trade and Investment Partnership (TTIP), which was being negotiated as he took office and would have eliminated this differential. I think that is known as shooting oneself in the foot.
3
The EU is a customs union -- free trade within the union and common tariffs on trade with firms domiciled outside of the union. The President should have tried negotiations first to lower tariff barriers on US produced products.
What is left out this analysis is the fact that in addition to the tariff placed on autos imported into the US, foreign cars are subject to state/local sales taxes as are domestically produced cars.
Also, left out of the analysis id the goal of foreign trade. It is to enhance the welfare of all or at least most of the citizens. Competition from foreign producers made domestic auto makers design and produce higher quality products at competitive prices. Trade barriers will protect weak and inefficient firms that would probably vanish if they had to face real competition.
So called "leaders" surrounding themselves with sycophant yes men. It's everywhere, in every institution of this country. "Just tell me the good news that makes me look good and glorifies everything I do or say." "Problems?" "Make them go away and never tell me about them." If you do that, you have a job, you get bonuses, you are rewarded. If you don't, you are pushed out, fired, disposed of to make way for the next kool aid drinking sycophant.
Couple that attitude, with ignorance, entitlement, and incompetence, along with a ruthless devotion to making profit over everything else no matter how much damage it does, and you have the real underlying reason why this country, and the world, is in the mess we find ourselves in.
Trump is a symptom, as well as a poster child (emphasis on "child") for the problem.
7
I can hardly wait to hear what Krugman has to say about Kudlow when he joins the Trump administration. With Kudlow and Malpass on the Trump team, two slums of Bear Stearns, what could go wrong?
2
How timely, as Rex Tillerson, who of late has been openly critical of Russia, has now been discharged. Note that the WH refuses to acknowledge the British PM's position vis-vis a Russian role in the spy poisoning case there. Will Mike Pompeo be able to walk the line between Trump and reality? Will we have a functioning Department of State? Stay tuned folks.
9
Not only does this Neville Chamberlain-style appeasement toward Trump exist in the cabinet and administration, it has consumed the Republicans in Congress. Put a mustache on McConnell or Ryan and they resemble the old grand appeaser, Neville.
7
WINTER for Clinton's sycophants, the one who still write op-eds for the NYT. The title of Kruman's op-ed today could be "Sour Grapes." BTW, doesn't Navarro have a Ph.D. from Chicago, not a throwaway one that is implied? And look where "mainstream" economics, in the hands of Greenspan, Summers, et al, has gotten the country: manufacturing hollowed out, chronic trade imbalances, financial meltdown, large and growing public and private debts.
Navarro is correct about export subsidy aspects of the VAT approach, as any tourist to, e.g., Europe who has returned with purchases knows. You get VAT rebate at the airport and, if unlucky, pay duties when you get back. If this isn't an export subsidy, what is? Krugman offers a phony take by changing the narrative to the use of domestic taxes on domestic consumption. Typical.
Typical, but true. If the US had a VAT as does the EU we wouldn't be having this conversation. Our stats/local sales taxes should work the same way -- if you buy something from an out-of-state vendor, you should pay the state'local sales tax in your stat, not the state form which you purchase the product. An export rebate for the exporter (seller from whom you purchased the product) and in import (sales tax) on the purchaser.
"Mr. Trump said he would replace Mr. Pompeo with the deputy C.I.A. director, Gina Haspel, making her the first woman to head the spy agency."
So much for the misogyny.
But it is not going to change the way Democrats think about Trump.
He does have some faults - e.g. he is clearly a lecher. And then the Democrats pile on other, imaginary faults, like "racist," "misogynist".
I am sorry but you are not convincing us centrists. And I am sorry but we DO intend to participate in the election in November.
If you are a genuine centrist, you cannot possibly support this administration. And if you still support this administration, you are no centrist. You do the math.
I'm a centrist too, and I can tell you putting a woman in a job does not erase all the other awful things you've done. He's certainly a racist and sexist, but the greatest problem is that he's a complete moron.
Jane, he has put several women in important positions. This one is only the latest example. Our ambassador to the UN is another. You may not like Betsy Devos, but I believe she IS a woman.
He is neither a racist nor a sexist nor a moron.
He does have defects, like being a lecher. But being a lecher need not make you a sexist. He loves women's bodies, far more than he should but he also respects their minds.
Otherwise he would not have put a woman in charge of his electoral campaign.
You want to stay with your prejudices and not let your judgments be bothered by facts. Fine, that is your choice. It isn't mine.
One can only assume that Trump's first words to Navarro as the chief economics adviser, as he enters the President's office is, "Pucker up."
Ditto, Mike Pence, Sarah Huckaby Sanders, Mnuchin, Carson, Perry, DeVos...
4
Team of rivals this is not.
4
The elitist NY Times readers and Prof. Krugman should leave the Dear Leader in peace. After all he has (35%) support from the people, where all wisdom comes from.
"Not end well?" Sorry Prof., but the words you were looking for were "We are doomed".
6
Good photo for making Mr. Navarro seem out of step with everyone else.
1
I like the oblique reference in the title of this piece to Mel Brooks' "The Producers."
Seems somehow apt.
4
I have a question. Let's look a cars. In Germany for example, are VATs equally applied to all cars; that is imports and domestic, and at the same rate?
1
YES
So if you're going to cherry-pick the campaign paper over VAT, I'm going to cherry-pick you on the suggestion that China believes trade is a zero sum game. How could this be when China demands Chinese workers on bids for foreign projects or when it demands everything "made in China 2025"?
Navarro's main complaint about EU trade is the hidden subsidy the weak euro implies to German manufacturing. Italy today is talking about a return to the lira to resuscitate its manufacturing sector. Home issue in Greece is long overdue to end the skills exodus there under the European bank regime.
The economics profession is on trial today. And it's long overdue because the profession has drifted from discovery to PR for the corporate welfare lobby and for media in global trade more than happy to advance friendlies with self-publishing careerism. People cheat; I'm with Navarro.
Your complain is that those pesky Europeans have high internal taxes and this is unfair to US? Well, raise taxes in US instead of complaining, if that is thesolution. By the way, no one is forcing Italians to buy German goods, as no one is forcing Americans to buy Chinese goods.
Navarro, another Dreamer like Marco Rubio with his contribution of today.
The US is not forced to Import from China, but the US, like the EU have chosen a trading System of open Competition. And whether we like it or not,
China is much more competitve in everyday Consumer Products (Electronic-, IT-Products, small and large Home-Appliances, Textiles and many other
Gadgets which everybody is using every day. The next wave will be
Electric Automobiles en masse rolling across the Oceans towards Europe
and the US, whether we like it or not, Aircrafts will follow.. China is already good with their Products and will become better every day, mainly based on hard work. State Subsidies were yesterday and are a shortterm medicin
anyhow.
Why does Americas biggest Corporation allow China to produce their "I" - Products??
I honestly donot understand the grumbling in the US anyhow.
The Nation has almost full Employment and since you block Immigration,
who will produce your Products for daily use at a China Price Level?
Okay the US can block the Imports and isolate itself if you dare.
But one must think of the consequences up to the end.
Free Trade has proven itself to be of benefit to all Participants, despite
flaws here and there. No System is perfect, but Free Trade is by far
superior over Isolation.
2
Ironically, value added taxes are a consumption tax often touted by conservatives. They are used in Canada too.
Naturally Donald Trump does not have a clue what value added taxes are, and Navarro has no incentive to explain it to him.
4
More protection for small Europa farmers and fewer toxic Farm products grown reducing toxic Farm runoff into our waters now unprotected by Pruitt EPA...hmm...so protectionism for our environment by decreasing corporate farming and bad food consumption around the planet. Hope in law of unintended consequences?
2
"And everyone who isn’t willing to play the full game, who has tried to play by something resembling normal democratic rules, seems to be fleeing the administration."
Fleeing or being fired.
1
No...we've enjoyed more than 240 years of democracy and all of it is going to be washed away in less than 2 years unless the American people get up off their comfortable sofas and do something about it. We can no longer be confident that our votes will be duly counted, that the sitting president won't actively engage a foreign enemy to harm the election.
3
It seems to me that the author’s contention ignores the importance in the relative sizes of the market. If in a small market a consumer may pay a VAT on all products sold there, he may choose to substitute or not to buy anything at all. So while he loses the benefits of buying the product, the effect is to deny the producer a market. In a small market, the producer is not hurt much, but is effectively, to some extent, cut out of the market. But if the larger market is open, with no VAT, the producer is not so fettered. The result is that there is a balance of trade in favor of the producer in the smaller market. Can someone explain where this logic is wrong?
1
Smaller market? Europe has 500 million people!
While VAT amounts across Europe vary, EU as a whole is a bigger consumer market than the U.S. alone. So, if anything, under your argument U.S. producers would benefit more than European ones. But obviously trade is more complex than that, and trade imbalances (and market penetration by different manufacturers in different markets) are determined by more variables than just the presence of a VAT.
While I agree with Mr Krugman about almost everything, I'm not sure I completely buy his argument here. Germany has a national sales tax, the US does not and US state sales tax rates are much lower than Germany's 19% VAT. Doesn't this mean that it's harder for _any_ company, be they American or German, to sell non-essential goods in Germany than the US and consequently that more such goods will be sold here than there and that this will tend to increase our trade deficit? Put another way, at the same level of income, US consumers will buy more stuff than their German counterparts and this elevation in lifestyle does in fact increase our trade deficit with Germany.
I'd love for Mr Krugman, or somebody with a better grasp of this stuff than I have, to weigh in here and agree with me or point out what I'm missing.
1
You only point to the fact that Germany is handling internal economy their way and we are handling it our way. Nothing to do with trade. Now, Germany has surplus with any country thay trade with, and they have strongest manufacturing sector of any developed country. If we were smarter we would see why theit manufacturing is triving even despite the high VAT. Well, first of all they have a functioning government where employment is considered a privilege. We have government that is not functioning, and is constantly being undermined by conservatives.
Maybe that's where the problem is?
1
@ Tim, any VAT paid by a german company is reclaimed by that company, meaning there is no net out of pocket costs to importers. A sales tax is not reclaimable but is typically not assessed on raw materials or inventory held for sale, resulting in no net out of pocket costs to the importer. So, same same, is I think PKs point.
1
Putting this yet another way, let's assume there isn't a critical difference in the per-capita productivity of both nations. The government is a larger portion of the economy in most Western European countries than it is in ours and is in part funded by VAT. Because of this, there is much less poverty in Germany than there is here and, in particular, the less well-off have much better access to health care, which is primarily domestic and not imported. They have decided that it is more important to provide basic necessities for their entire populace than we have. More middle-class people here have smartphones, fancy televisions, and nice cars (all of which can be imported) and lower-class people have more trouble with housing, food, and health care (all of which are more domestic in nature). This excess of imported stuff coming, in a sense, at the cost of domestic basics for the poor tends to increase our trade deficit.
While the VAT do not have the effect as expressed by Navarro, we should not forget that one of the original parts of the Republican tax proposal, a"border adjust-ability tax", would have had the effect that Navarro sees for VAT. In effect, this would have acted as an tariff on imports and a subsidy on exports. Thus the U.S. be actually doing what Navarro accuses the Eu of doing. Thankfully this was dropped from the final but still flawed tax proposal.
1
Why is it so tough to understand the difference border tax and VAT? Border tax is different that VAT because it only affects imports. VAT is levied on all goods, domestic and imported. If all states levy 10% extra tax on all goods, that would be equivalent of VAT.
This is the matter of country controlling it's revenue stream. Would it affect imports? Possibly, but how the country is run internally, employing economy based on consumption (US) or on manufacturing (Germany), it's no other country business. We chose our way and should understand all it's implications.
1
The plan put forth by the Republicans on border adjusted taxes did not only deal with imports but also carved an exemption for income from exports sales thus encourage exports at the expense of domestic sales for same products. So as proposed it effected both exports and imports not just imports in this case
Sounds Hitler-like to me. Anybody who didn't swallow the Fuehrer's line was gotten rid of.
Funny how these strong, smart, leader types can't have any ideas around them but their own. Incredibly insecure.
Yet one of our best presidents, Abraham Lincoln, used a team of rivals with differing ideas to lead us through the darkest days of our country.
8
And, this horrible Administration just proved Prof. Krugman's point by sacking Rex Tillerson, to be replaced by another Republican goofball with a yellow streak up and down his back, Mike Pompeo.
Chaos blooms in Washington like yellow dogwoods instead of cherry blossoms.
The worst Republicans, vying to be the perfect traitor to the ideals of American democracy, curry favor with Dear Leader as they flatter our way into the Trumpist oblivion.
13
Good try Navarro , but you’ll never be as big a sycophant as Trump himself.
3
Soon only the shameless sycophants will be left. This will not end well.
But where will it end? Hopefully, not in a nuclear war!
4
Posers and Sycophants--
Tell him you care, each time you speak,
Keep him deluded each day of the week,
Give him bad stats, clearly made up facts
Posers and Sycophants,
And Sycophants and Posers . . .
2
When I think of some of the great intellects that have occupied the Oval Office, and then compare them to Trump, I get very depressed. It's hard to resist the idea that our society is collectively more stupid than ever before.
8
It's always springtime for sycophants, in any administration. Some prefer more subtle sycophants than Mr. Trump, but then we always knew he was vulgar.
1
Anyone who actually believes Trump is always right belongs in a mental institution, not the White House. I doubt Navarro believes that; what he believes is that Trump must always be told he is right. It's the full Stalinist approach where people of ambition in the orbit of an utterly ignorant autocrat always tell the emperor how wonderfully he is dressed. As an aside, is that why he still has his bizarre hairdo?
7
It all connects back to Putin, this is getting clear every day
8
As Kellyanne Conway admitted, there are "alternative facts." It's not so much Peter Navarro as it is Donald Trump who has long-held the misguided, misinformed views on trade that are supported by Peter Navarro. And, Mr, Trump did choose to ignore the advice of his Chief Economic Adviser, Gary Cohn, who resigned over this issue. So while Mr. Navarro is the sycophant du jour, it is the warped views of Donald Trump that are, as always, determining policy.
3
Just another in a cast of clowns who will get eaten alive by Xi Jinping, who is playing the long game.
7
“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! Hate to go to a doctor with that same attitude....or a construction contractor......or a parent.
7
Springtime for Trump. Winter for U.S.
1
I do not understand the contempt for Peter Navarro and the adoration for Gary Cohn in the New York press.
In my opinion, neither is warranted.
Possibly its connected to the phenomenon that if you want good press, leak to them.
It may be related to who is a reputable economist and who is a sycophantic nut job.
1
So, and briefly put, President Taft's new economic advosor is Dr. Sardonicus.
Seems appropriate.
What was your first clue?
Again: an ministration that's rotten to the core! And the worst thing Trump supporters can say about DT is that he maybe, kinda, sorta, sometimes tweets a tad much...
5
“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 is right. How is it that my California tax dollars are spent paying this guy to be Professor Emeritus at UCI?
5
The trade advisor, in the foreground of your picture, isn't the problem. The 'working people' behind him are: they are desperate and don't know what to do, so their they are, 'with' this most despicable President.
The common American must become better at being a good citizen. It is now enough to raise your kids and do some volunteer work: you have to know what the issues are and vote with some kind of honor and respect for this country.
If all we see is our paycheck, then, to hell with anyone else and the climate. This is way too selfish, and exactly what Republicans bank on. These same people of modest means vote for moneychangers, that just passed a tax cut for the billionaires of this lost country of ours. Billionaires voting the same as workers? Hmmm, I wonder why?
No, we are all complicit, and 'conservative' Rebublicans, no matter how 'Christian' or evangelical they call themselves, are with the moneychangers. They are one of the biggest problems of America today.
Who are We the People? Who exactly are we living for? What is the 'more perfect Union' in a world of greed and selfish gain. Our President leads us into this darkness, and the working people vote for him and the Republicans who support and shower praise upon this liar, cheat, adulterer, bully. Republicans. Ruin.
2
So much time spent trying to "logic" out why this man does things.
Europe is on the chopping block because they don't like him and they made fun of him. He's punishing them.
Just as he's set this all in motion because someone told him that the election today in Pennsylvania is a referendum on his Presidency.
Things are very logical if you look at them all as a bid to get people to like him.
1
Krugman tells it like it is. Trump only listens to the flatterers,the sycophants, who tell him that his orange combover is the most beautiful hairdo they have ever seen,that his words like covfefe are the best,that his ideas for starting a trade war is great. He is immune to the truth,from criticism. Only praise from lackeys like Peter Navarro and Stephen Miller will suffice. Regrettably, the White House staff,the cabinet, and the Republicans in Congress have no truth tellers who are willing to stand up to him.
3
Prescient, Paul.
I wonder, did Rex Tillerson read this on his plane and have that tingly feeling on the back of his neck?
5
Navarro is willing to kiss the dear leader's ring, as is Devos, Carson, Pruitt and the rest of the gang that couldn't shoot straight. Qualifications for a position is not considered by Don the Con. I always wonder how Jared Kushner is in any way qualified to do anything other than be a slumlord, but Trump thinks he's the one that can bring peace to the Middle East.
I don't think anyone really understands how if this continues the collapse of America will follow shortly thereafter. We now have Republican hacks in congress who refuse to conduct an actual investigation claiming they found no evidence to suggest collusion, but haven't interviewed all relevant witnesses and allowed those interviewed to simply refuse to answer questions and not be held in contempt. These guys claim their findings are the correct conclusions and the entire intelligence community got it wrong with respect to Russians supporting Trump during the 2016 election. And who headed up the committee? Devin Nunes. Another real qualified congressman.
I'm just seeing that Rex Tillerson has been fired and will be replaced by another Trump shill, Mike Pompeo, who met with Russians under sanctions in Washington and claimed it's no big deal.
We can kiss America goodbye now and thank the complicit Republican congress who should be jailed for treason.
2
Before he died, my Swedish cousin, who was a retired professor of economic history at the university in Stockholm, discussed with me his wonderment with conservative economists [such as Peter Navarro, and the author of "trickle-down" theories, Arthur Laffer]. How could these theorists continue to believe in economic theories and policies that are, repeatedly so prone to abject failure?
Which is why the Nobel-winning economist and professor at Princeton, Paul Krugman is so valuable to bewildered minds needing clarification on what makes those aforementioned economists, and their ilk, so dangerous to an egalitarian society. Their theories are based on a Darwinism of the darkest sort. Their's is a theory of natural selection where the rich and powerful have little, if any, responsibility to the society that lifted their boats above all others.
As for Mr. Navarro, he is precisely the sort of puzzle piece Trump loves to have in the room. Navarro reminds me of those litte men in the giant hats surrounding the North Korean leader who applaud and nod his every whim.
For all of Gary Cohn's faults, he eventually came to grips with the iceberg threatening the ship of state. Trump wants people to reaarange the deck chairs as he sails into oblivion.
I suppose it is a pipe dream to imagine just ONE Republican in the Senate or House becoming the next Howard Baker; someoone who is willing to face the facts and act on them. It cost Nixon his job. The same fate must include Mr. Trump.
2
My jaw dropped when I read Navarro’s statement. There's always bias and spin in analytics. Knowledge is an imperfect thing. Even gravity doesn't always behave like gravity. We therefore have some room for interpretation. However, all analysts strive to be as unbias and as accurate as humanly possible. Our assertions are confirmed or rejected based on the opinion of the community. You can question the gravitational properties around a black hole but you can't tell a room full of physicists there is no gravity. That's the nature of decentralized information grounded in empirical scientific thought. Navarro is openly admitting his role in the White House aspires to be the exact opposite.
That's the kind of statement I'd expect to hear from someone like Anthony Scaramucci. Did Navarro get his PHD at Trump University? In technical terms, he is what you would call a quack.
2
I think this VAT problem could be explained in a half minute TV commercial. Just take out the psycophant talk and explain the facts. It’s not that complicated. There must be someone willing to finance this. There may be no point in running it on the Trump morning shows but I don’t see any effective counter to the simplistic jargon that is effectively being pushed by the bully pulpit. People like Navarro and Munch go on the shows and spin this stuff without an effective counter as far as I have seen.
4
In Shakespeare's Julius Caesar, Brutus and Cassius discuss Julius Caesar's expanding quest for power. fearing he will become Emperor - dictator for life.
Cassius says, "Why man he doth bestride the narrow world like a colossus, and we petty men walk under his huge legs and peep about to find ourselves dishonorable graves." He continues,
"The fault , dear Brutus is not in our stars, but in ourselves that we are underlings." In other words, it is not fate or the gods or some external threat that determine Caesar's power, but Roman citizens like themselves who lack the courage to resist him.
President Trump and his base (sycophants) consistently find scapegoats--China, European allies, trade pacts, immigrants, Democrats, etc. to blame for America's deficits. Americans can and must resist Trump's simplistic, selfish, and grandiose uses of power by asserting our civil rights and exercising the power of the vote.
2
I am not surprised any longer when Krugman trashes anyone and everyone from the current Administration: his rabid atavistic anti-Trumpism is well-documented here and elsewhere. What is still shocking to me is that he attacks our Leaders and their loyal servants - the public employees, including his own colleagues (Dr. Navarro has NEVER stooped to such lows), the private citizens, and now our friends and allies in Germany and elsewhere in Europe. If he writes ONE article without mentioning Russia or Putin, he should receive another ill-deserved Nobel, really. Luckily, Dr. Navarro is an outstanding economist who knows well what he is doing.
1
A now Rex Tillerson is out and we have another sycophant - Mike Pompeo - in the most powerful cabinet position. "But Mr. Pompeo knows whom not to criticize — namely, Mr. Trump. Since taking over the C.I.A., Mr. Pompeo has gone out of his way to praise what he describes as Mr. Trump’s open-minded approach to intelligence, recasting the president’s churlish mocking of American intelligence agencies as the healthy skepticism of a smart leader" NYT Aug. 7 Trump Likes When C.I.A. Chief Gets Political
Watching all of this unfold is like watching a murder mystery where you know who did it. It has become beyond obvious that Trump is doing everything to further enrich his wealth and to help Putin, and it all boils down to if we can remove him from office before he does permanent damage to our country and our allies.
4
If there is any doubt that History does not repeat itself, the Trump Presidency is putting that to rest. How many times must people watch this story play out on the world stage? Of course the most recent examples have been in so called banana republics and third world dictatorships. Never before has it involved what once was the preeminent nation on the planet. We must not let this be the final chapter of our grand experiment with a democracy based on ideas and law.
2
Navarro up. Tillerson out. I rest your case, Paul.
2
The mad-clown president is stacking his court with belly-on-the-ground sycophants while the Republican Party fiddles and declares no collusion while using the Constitution as kindling to set our democracy on fire.
Is it time yet for another Declaration of Independence?
Vote in November, throw the traitors out.
6
I can hear the fiddle and smell the smoke. Can you?
3
Trump may surround himself with Yes Men and sycophants who fawn and flatter, saying what they think he wants to hear.
But don't overlook the greatest sycophant of all: Trump himself.
Not just a sycophant to himself (one way to characterize his narcissism) but the Sycophant-in-Chief who says what his base wants to hear so they stay buzzed. He resorted to sycophancy when he met with the Parkland families at the White House. To win them over during a highly emotional meeting, Trump expressed support of age-restrictions for weapons of war, a reversal of a campaign promise. A few days later when he met with the NRA and Pence, his sycophantic impulse to please the "Great Leaders" of the NRA led him to reverse his position back to a NRA stooge.
Consider Trump's hero-worship of Putin. It may yet be treason but for now it's definitely sycophancy. He's enchanted by Putin. Trump is a fake tyrant. Putin's the real thing. Trump grovels for Putin.
Sycophancy explains why Trump inexplicably mouthed on TV "He's a good man" while pointing to President Obama, the subject of his obsessive hate campaign. Obama's dignity, decency, gravitas and graceful discharge of transition protocol, made Trump feel small in the presence of bigger, which triggered a sycophantic spasm of fawns, gushes and make nice.
All punctuated with his goofy grin.
Asked what he called tax cheats Trump said "smart."
Ask what he calls sycophants he'll say "stable geniuses."
12
It's all of a piece: his proposed military parade, that televised cabinet meeting where his lackeys declared they're blessed to serve under him, the Chinese playing him for a fool by giving him the 5 star treatment, his showing off the nuclear football to the guests at Mara Lago.
It's like that kid in the Twiilight Zone episode who is an all powerful, spoiled, petty tyrant whose slightest whim may brutalize a family member. All around him must bend over backwards to humor the little brat or risk some horrible punishment.
5
How much different was Hillary? Did she listen to Ed Rendell, or Michael Moore?Or Pelosi, who sin't supporting the Democrat in the PA18th because he doesn't support her?
This is not new. In his much mentioned career as a wheeler-dealer Businessman, Trump demanded " Loyalty " above all. Qualifications, training, skills, talent NOT required, or even encouraged. People with actual credentials and accomplishments tend to get uppity, as they have other options. This leads to the Trump Barrel Theory of Subordinates.
That means the very bottom of any Barrel, after the good stuff is poured off. Quick, name one person in His Cabinet that you would hire for your Family Business. Yeah, thought so. But, good news for Rick Perry. Betsy
Cruella DeVos is now in the running for the most unqualified, incompetent, unquestionably clueless Cabinet Member. GO, Rick. The eyes of Texas are upon you, and maybe you could take up dancing again. Just saying.
1
If you look at Peter Navarro's publication history, essentially what he's done is to get in on the ground floor of the faux-academic publications racket.
For those not acquainted, there are for-profit "journals," out there now that will publish ANYTHING, if you can squint at it in a bad light, it looks sorta kinda academical, and your check cleared.
Somebody needs to look into how he got hired and tenured: it's dollars to Navy beans that there's a crackpot right-wing gazillionaire in the mix someplace.
Sweets to the sweet; phony intellectualism to a phony President, it would seem.
5
Indeed this will not end well....
TheRump and his legions of obsequious sycophants would have us all under the rulership of a kakistocratic oligarch.
If that is our next chapter, this book will not end well.
1
I now finally get it. The reason Trump is so upset with Kim Jung Un is not that the North Korean dictator is a mad man with nukes but because it is he and not Trump who gets the “Dear Leader” moniker! But after the tragic display of a basement by cabinet members last year and Navarro’s proclamation that Trump is always correct, we may now see Trump be referred to as “Dear President” by all in his administration..
1
"Since when has it become acceptable to declare that Dear Leader is infallible?"
Required for White House employees, Congressional Republicans, and Fox News "journalists".
Never for supporters of democracy,
6
I agree with everything except the professor's final point. Trump has shown himself to be dangerously uncomfortable with any level of criticism from those around him. He is the man who tried to trademark the phrase "You're Fired!" He becomes readily flustered and angry with those around him, and lashes out, as his tweets of the last 2 years prove repeatedly.
I suggest that the main service the synchophants in his administration provide is to serve as his "Prozac". They give him the comfort and (falsely) positive reinforcement he so desperately craves. This president may be much safer for all of us if his staff constantly tells him how wonderful he is and how wonderful the job he is doing is. The alternative may well be to have him dive into isloation, frustration, paranoia and rage that cause him to lash out with whatever weapons he has handy. And he now has more weapons than the NRA.
2
I buy car parts from Germany and they don't charge the VAT on things they export
1
Trump may surround himself with Yes Men and sycophants who fawn and flatter, saying what they think he wants to hear.
But don't overlook the greatest sycophant of all: Trump himself.
Not just a sycophant to himself (one way to characterize his narcissism) but the Sycophant-in-Chief who says what his base wants to hear so they stay buzzed. He resorted to sycophancy when he met with the Parkland families at the White House. To win them over during a highly emotional meeting, Trump expressed support of age-restrictions for weapons of war, a reversal of a campaign promise. A few days later when he met with the NRA and Pence, his sycophantic impulse to please the "Great Leaders" of the NRA led him to reverse his position back to a NRA stooge.
Consider Trump's hero-worship of Putin. It may yet be treason but for now it's definitely sycophancy. He's enchanted by Putin. Trump is a fake tyrant. Putin's the real thing. Trump grovels for Putin.
Sycophancy explains why Trump inexplicably mouthed on TV "He's a good man" while pointing to President Obama, the subject of his obsessive hate campaign. Obama's dignity, decency, gravitas and graceful discharge of transition protocol, made Trump feel small in the presence of bigger, which triggered a sycophantic spasm of fawns, gushes and make nice. All punctuated with his goofy grin.
Asked what he called tax cheats Trump said "smart."
Ask what he calls sycophants he'll say "stable geniuses."
1
Trump wants to surround himself with YES-Men; what a surprise. He has always had an ego the size of an orangutan whose color matches that of his, or planted, hair. And there are always enough men and women who will abase themselves and debase the whole idea of providing multiple and alternate views. After all there are still nearly 35% Americans who see value and virtue in Trump.
Welcome to reality, and you bet this ain't fake news!
I think it is now perfectly clear the NYT and it’s columists don’t think Donal Trump should be President. After 16+ months everyone pretty much understands this. Don’t you think it is time to move on to any number of other problems that exist in the world? This has gone from being mildly interesting to just downright tedious.
2
TW - Trump and Trumpism are the largest problems we have today. Very sad that you have been unable or unwilling to notice.
Dr K! It's s Springtime for Brown-nosers - far too many Americans don't know what a 'sycophant' is or how to pronounce it - thanks to our "third-world class" education system. It is, indeed, deeply disturbing for a bigger shill even than pretend to know-it-all Jarod to be the "so-called president's" principal source of trade and economic advice. Trump never relies on anyone smarter than he is and one must be willing to lie and create alternative facts, which Navarro clearly is happy to BE PAID BY THE AMERICAN TAXPAYER to do. How do these so called "professional people" in the Administration, including Tillerson, Carson, Navarro and (until last week) Cohn, look at themselves in the mirror without vomiting? And whatever happened to the clowns that wrecked the economy in Kansas? They're also probably part of the Trump mis-administration!
3
Again ,as in nearly every article of mr Krugman, an unfunded insult at he President of Russia:"Putin an enemy of freedom"?that is untrue mr Krugman and fully unsubstantiated.
Donald Trump is known for a number of personality quirks, some of which are just harmlessly odd, but most pf which are dangerous in anyone holding high public office.
The troubling Trump persona features intellectual laziness, religious and racial bigotry, complete disdain for the truth and the desperate need to be viewed as a heroic man with all of the answers other people were too stupid or cowardly or corrupt to see.
On the subject of global trade, Peter Navarro provides Donald Trump exactly what Trump needs.
In Trump’s mind, Navarro provides the nuts-and-bolts expertise to execute a plan which Trump conceived in his usual intuitive brilliance.
In Navarro’s mind, he provides Trump with plausibility to sell his tariffs. In the process, Navarro receives status as the president’s valued consigliere.
This is quite a partnership. Np wonder the world has trouble taking us seriously.
2
Trump’ knowledge of international trade
Would get him a failing grade
His understanding of VAT you could say
Is almost as deep as Art Vandelay
But winning trade wars is oh so easy
Just ask Reed Smoot and Willis C. Hawley
3
We all know Trump is pathologically narcissistic. What I don’t understand, however, is why his narcissism allows— nay, impels — him to select the worst people rather than the best people for any given job. These awful picks (De Vos, Pruitt, Mnuchin, Carson, Ross, Navarro, etc. etc.) reflect unbelievably poorly on Trump. If he selected well-qualified and well-regarded people instead, they would make Trump look really good, and therefore better satisfy his narcissistic tendencies.
Does Trump wind up picking terrible people because (a) he’s dumb, or (b) someone else is doing the actual picking? Can someone please explain?
ALB - He does this because he mistakenly need to think that he is the smartest person in the world and by choosing poorly, the ignorant people actually think that he is. Very sad for our country....if it is not too late by November, we absolutely need to correct this mistake.
2
Navarro is a Harvard Ph.D. What does that say about the economics department at Harvard?
As I read this column, the cable TV news show I had on in the background was replaying highlights (or "lowlights") from Trump's "rally" in Pittsburgh last Friday evening. While this was ostensibly a presidential appearance in support of GOP Congressional candidate Rick Saccone, like all Trump speeches, this was a seventy-minute free-association rant by Trump excoriating all his imagined enemies (the press corps, "socialists", Democrats, unions, gun-grabbers, etc.).
And of course the rabid, pro-Trump crowd was eating it up with a spoon, howling and chanting in spontaneous eruptions of rage every time Trump held up another sacrificial lamb to be rhetorically slaughtered in front of the crowd.
And then it struck me. Trump wants a Cabinet and a West Wing staff who will venerate and cheer him in the exact same manner as the spittle-flecked masses at his Nuremburg-style rallies. He doesn't want just sycophants - he wants roaring adoration and total obeisance to his every utterance (including the numerous falsehoods which he spouted to the crowd on Friday evening - eliciting thunderous approval from his adoring fans).
In short, Trump is a delusional demagogue. He loves nothing more than spouting lies, baseless propaganda and free-floating bigotry in front of adoring crowds and hearing them raise the rafters in response to his self-perceived genius and machismo.
And that's the same response he expects from his staff. Not "Yes", but rather "Oh God, Oh my God, oh yes, yes, YES!!!"
4
Dave - Thank you for your comment....you nailed it on all counts.
1
One of the saddest things about Mr. Krugman's opinion pieces is their predicable conclusions. He would like to be our Casandra, except he has been invariable wrong.
The poor man appears unable to live with the fact that he is neither the smartest man nor the keenest wit in the room.
A more honest man would disappear for a couple of years, go into the dark and perhaps return with something to say other than "This will not end well." That is wishful thinking on his part.
As for accusations of sycophancy, considering the man's slavish adoration of the Clintons, Mr. Obama and other Democratic Party Poo-Bahs, one can only repeat the old rub, it takes one to know one.
Let's hope that Navarro travels on chartered jets so he can dismissed and be replaced by the next Trumpophile who claims to be an economics expert.
1
"And the story of Navarro’s rise tells you a lot about the nature of the Trump administration — a place that rewards sycophants who tell the boss what he wants to hear."
Who is surprised by this? Donald the man-child inherited Trump, Inc. from Daddy and has never been accountable to anyone. The "best people" who surround him in the WH are exactly the same type of loyal sycophants that surrounded him in his business world/reality TV days.
Temperamentally (admittedly a scary word to start any sentence about Trump), he is much better suited to be a Mafia boss than president. But, Trump would fail just as miserably in that job as in his current one because he is too lazy, ignorant, incurious and incompetent with no attention span.
10
Agreed. Extra stress on no attention span.
1
"Since when has it become acceptable (no necessary as a term of employment) to declare that Dear Leader is infallible"
Since before the apprentice.
You don't become a serial bankrupt by listening to good advise.
We can only hope he gets sycophants for a defense team.
If you happen to know anyone who lives in or near PA's 18th district encourage them to vote or encourage friends to vote.
8
You know, we've seen this movie before and know how it ends. Unfortunately (or fortunately for us) it was a foreign film and you know how few people go to those. This is how Democracy dies. And because the whole thing is shot in slow motion, we are at least halfway there already and don't even realize it: The demonization of any press and judiciary who don't make success of the administration their first priority, calling "treason" not only on political opponents but on people who applaud insufficiently, the requirement of drooling sycophancy in high officials, the official "faux news" ministry of propaganda. Oh, we've seen this movie. In the next scene, there will be an "Emergency" of some sort. It doesn't even matter what, but sometime in the next year, something bad will happen that will "require" the Dear Leader to get just a little bit of extra power so he can save us all. Power to silence the "fake" press and arrest the treasonous haters who try to march in the streets. Power to listen to our conversations and punish the "unpatriotic" critics. And the authoritarian 30% will bark and howl for more. Unless the rest of us make it stop. There are some movies for that, too, but I don't know if they'll ever play here again. Hope so.
5
Krugman's loved Obama's decisions resulted in the worst economy since the depression, terrible unemployment rates, lowest labor participation rate in 40 years, no growth and minority unemployment at record highs, higher taxes, and government regulations by the tens of thousands.. Krugman hates Trump who has created a booming economy, low unemployment, optimism for the future, low minority unemployment, elimination of thousands of government regulations, and lower taxes. Which of those situations benefits all Americans including minorities? Krugman has gone the way of Lenin and needs to be recognized for the failed miserable economist he really is.
1
Obama inherited the Great Recession from Bush the Younger, and worked mightily to fix the errors that got us there. Even with a recalcitrant Congress the economy began to improve, albeit not very quickly, but slowly and surely. Regulations were put in place to end the banking malfeasance that created the Great Recession. Obama left Trump a nicely humming economy.
Trump inherited the result of those efforts. He himself has done nothing to help the economy. Cutting taxes while the economy is doing well is not good for that economy, it is instead likely to add inflationary pressures that currently don’t exist. Cutting regulations only pushes those costs onto the rest of us, instead of making businesses pay the full cost of their operations. Who pays to clean the water and air, make sure workplaces are safe and that business practices aren’t unlawful? Without regulations, the rest of us do. And business just gets to increase their profits.
There is what is now an old adage - Trump is someone born on third base who thinks he hit a triple. He knows squat about economics. His lack of understanding and an overrated confidence in his ability to think on the fly will collapse the humming economy he inherited and make enemies of our longtime trading and political partners.
3
Seems you confuse Obama and his predecessor.
2
Not sure where this guy was for the past 9 years, but Obama's policies initiated and fed the economic growth that put folks back to work (unemployment was under 4% at the end of his term) and pulled this country out of recession. Enjoy that lingering economic growth because the Trump policies insure that it will short lived.
4
The main responsibility of Trump senior advisors is to eviscerate each other to entertain the unclothed Emperor and gain his thumbs up for the day or hour. Their ideas are irrelevant since Trump’s “good brain” has all of the five he thinks he needs to “win”. At least Navarro, unlike the vanquished champions of season 1, knows his job will be to chant “All Hail Caesar” the loudest, not to actually render unto Caesar any worthwhile advice.
1
The number one disqualification of ALL participants in this illegitimate and fraudulent con playing government for the daily reality show is the fact that they signed up for the job. Every last one of them. If you discover an exception it simply proves the rule (and don't trot out any blather about the generals, they are doubly disgraced by failing to uphold the principle of civilian control of the military, that Kelly in particular is not qualified and a dishonest shamed hack to boot is self evident.)
3
There is a book by English poet David Whyte called "The Heart Aroused" which is about views of corporate America. In it is a passage about meetings in which the boss ( a CEO) proposes an idea that all his senior staff offer opinions. All of them act as "sycophants." With one exec. feeling brave says" on a scale of ten boss,I give it a nine." All of them think his idea is ludicrous and dumb.
It would be of interest to know what % of execs reporting to the CEO are sycophants. Anyone who continually praises this president likely fits the description of a sycophant because they have never understood that the best managers are those who manage"Up" as well as down.
For that reason you have to be suspect of Navarros books regardless of his PhD. After all, just because you own a PhD. doesnt mean you know how to "manage Up."
1
Paul, you stated that if Trump got elected a recession would automatically happen, doom and gloom all over the world. But it didn't happen. So how do you expect anyone to value anything you say?
I know the NYT won't print this, but I write it anyway.
Doom and gloom over trumps social values!
1
A couple days later, he retracted, admitting his disillusionment had gotten the better of him.
Krugman is unlike all the economists who predicted fiscal austerity would bring us out of the Great Recession, who predicted high inflation (that never came) for a decade, that predicted the dollar would be debased (it was not), that Kansas would be an economic miracle (it became a failed state) and who predicted that tax cuts would pay for themselves. Unlike all of those charlatans, he admitted he made that statement out of despair.
Now, would you like to include the current administration’s fallacious predictions on growth after the tax cut?
3
At risk of defending Krugman, i'll point out that "automatically" is not necessarily immediately, and neither the effects of the Trump tax cut nor the potential damage of the tariffs have really taken as yet.....a little patience, please. Ignorant demolition of an economy as complex as the U.S.'s takes a little time.
4
"This is odd on several levels. To the (very large) extent to which Trumpism is based on racial enmity, picking a fight with Europe, of all places, seems strange."
Picking a fight with EU is not strange. The EU is the epitome of the "globalist cucks" that Steve Bannon and Stephen Miller white-nationalist types despise.
1
The VAT's rough equivalent is the states' sales taxes.
2
Yes, those sycophants continue to praise him while Trump only embarrasses himself not realizing that people see him without his clothes. And he continues to give away valuable bargaining chips: with Israel and China and now North Korea (Jerusalem, TPP, and now a meeting with Baby Kim).
5
Is Trump a dunce (highly likely) or a deliberate agent bent upon destruction of America's alliances along with our national and economic security?
4
He's easily influenced by flatters and offers of power and money. It doesn't matter to him where that comes from. He's what they call a useful idiot.
I'm absolutely certain that he's the type who punched the school weakling walking home, in order to gain acceptance into a giggling high school macho club he admired.
I appreciate the explanation of the right wing's basis for claiming a "trade deficit". I am still trying to figure out how "Obama and Hillary founded ISIS."
6
Trump does all his hiring at the local "crackpots are us" store.What could possibly go wrong?
3
The mind reels. Kakistocracy, indeed. Like the Big Lie it seems as if Big Incompetence overwhelms us by its sheer mass. Like the Big Lie where do you start when trying to fight Big Incompetence? We just saw DeVos flailing and failing on the national stage on 60 Minutes. And let's not talk about Pruitt, Carson, Rick Perry, et al. Somehow the Great Narcissist's Kool-Aid has paralyzed our institutions into impotence, aided and abetted by the cult that used to be the Republican Party. When will the great uprising of rational people happen?
5
It sounds like this guy, pretty much out of nowhere, hit the jackpot. Like a mad economics professor, he's the OZ behind Trump's madcap economic strategies. I've quit wondering why anyone smart, talented and truly honorable would work for Trump...we now know they wouldn't! With the exception of Mattis and McMaster, we've seen that they are all demented in one way or another, and heaping praise on dear leader allows them to carry out their demented schemes...very dangerous indeed.
2
I'm trying to recall the last time I saw an editorial by Mr. Krugman that indicated he'd "put in the hard work of understanding opposing views and assessing the evidence". Wait, it'll come to me....
1
Still not finding any substantive responses in republican comments. Just insults, and kind of lame ones at that. RJ just knows HE could do a better job of economic assessment that Dr. Krugman..... Very persuasive, sir or madam.
3
Why are we not surprised? Given the nature of the president’s rambling, off the cuff campaign rally in Pennsylvania this past weekend, the calling of names of his perceived enemies, to the cheering of his stacked base, basically says it all. Attention junkie supported by flunkies.
Between his golf games, endless lies and the purported campaign schedule for the near future, I’m sure he has someone researching how he can become president for life.
1
So, Jared goes on Amazon and ends up finding a book by a protectionist economist for Trump. A great nugget that sums up how shallow Trump's intellect is, not that we needed further proof. It would nice to know whether Trump read the book but I think we know that he didn't, he was too busy watching his shows.
5
"My function... is to try to provide the underlying analytics that confirm his intuition...."
Oh, cool. The opposite of science.
6
"This will not end well."
Propping up a demagogue such as Trump never has. Never, ever in the history of humankind. Hear that, Republicans?
4
Yea, Mueller is quietly protecting our Bill of a Rights and the Constitution. Mueller for President!!!
2
Brings to mind the pun line of an old joke-"madam, we've already determined what you are, now we are just dickering over the price."
3
In Krugman's quote, Navarro says he provides "underlying analytics". Use of the current buzzword "analytics", as opposed to "analysis" or even "statistics" gives a hint about Navarro's intellectual level.
5
None of this is surprising to those in San Diego, who have seen Navarro run for office numerous times and lose each and every time. His reputation in these parts is as a whack job, who promoted unpopular ideas and who utter failed to gain any sense of constituency. How sad he's found a constituency of one in the White House.
It is becoming increasingly difficult to distinguish between the Trump's White House aids and the SNL cast. Bizarre ninnies like Steven Miller, Peter Navarro, and Sarah Huckleberry are much closer to TV spoofs than serious purveyors of government duty.
3
It's not clear to me that there is anyone left but sycophants. Mattis may be the lone holdout but after this North Korea nonsense I don't get the sense he's going to be around much longer. Besides, Trump can get around folks like Mattis by not including them in the conversation in the first place, which is exactly what he did.
1
Navarro is quoted as saying: "My function, really, as an economist is to...confirm his [Trump's} intuition. And his intuition is always right in these matters.” Trump's intuition a decade ago was that the housing market would rise and rise -- and soon afterward, it burst with a pop heard round the world. Our president's intuition is a frightful thing to behold -- but intuition it is, and all you have to do is act precisely the opposite way of what he predicts, and you truly will reap dividends.
1
My intuition tells me the Earth is flat. But my education and reasoning tells me for a fact that the Earth is round and my preparations to sail the oceans will not lead me off the edge. Did trump learn to follow his intuition without thought at Wharton?
When this nightmare is all over, the sycophants supporting and enabling this man will simply claim they were following orders from their Dear Leader - he was elected by the people, after all. Shameful.
2
This tired script has been played out before, to tragic ends. My only question is who is Trump's Martin Bormann?
1
“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.”
Where did Navarro get a Ph.D. in economics....Trump University? Online? Mail order?
Once again, Trump's claim that he knows the best people is confirmed....but, only if "sycophants" is substituted in place of "people."
All, shall we say, ineffective, insecure "leaders" need sycophants to let them know, "Hey, you're doing great." See also "The Emperor's New Clothes"...
1
"This will not end well."
That is an understatement that would make an Englishman proud. I find one constant in all the Trumpian madness that might answer the question why. If you analyze His Orange-weirdness' most nonsensical statements, tweets, policy proposals etc. from a Russian point of view, they don't seem so absurd. Trump's negative or even hostile approach to the EU and Nato and U.S. allies in general make a lot of sense if you imagine Trump as a Putin puppet. It is in many ways the simplest explanation for a whole lot of crazy. Time to apply Occam's razor?
4
The Trump presidency has shown there is little that qualifies as “American” or “un-American”. There is a significant number of Americans who would be comfortable living in a strongman-led country. They laugh at Trump’s insults of his opponents, love their guns over their free speech, don’t mind have a government run by incompetent, unqualified people and enjoy single party rule. The notion that we are some how a better, exceptional breed of human does not stand up to examination. Americans are citizen of the world after all.
Hypocrisy and ideology go hand in hand. Have you noticed? Navarro is the poster child for the old saw, "There's a special award for the guy who graduates at the top of his Doctoral class in [choose your discipline], and also a special award for the guy who graduates dead last: 'Doctor'."
Having just finished reading several articles written by far-right (I don't call them "conservative," as that's lost all meaning in today's world) academicians recently, the over-arching theme is that their analyses all tend to be one-dimensional. Adherents to the Scientific Method understand that you allow yourself to be as open as humanly possible to new evidence, whether comforting or discomfiting, and follow that wherever it leads. Disciples of RWO (Right-Wing Orthodoxy) are easily identified by their narrow-minded acceptance and presentation of only those bits of information, however valid they may be, that support their preconceived beliefs ...and ignore anything and everything that might cast doubt on or refute their dogma. It's pervasive in this entire cabinet, all the way from VP and Inquisition Seneschal Mike Pence, to Edumacation Secretary DeVos, to Environmental Pollution Agency Sec. Pruitt, to Ben Carson, who thought "Cabinet" meant a blank check to go buy high-end furniture for his office.
And now the lickspittle Navarro, who doesn't understand the difference between VATs and MAGA hats. Ph.D.=Piled Higher and Deeper.
1
Mr. Trump has no need or regard for reality. Anyone on his team must, at a minimum, sever any connection to critical thinking and praise the Dear Leader. What a horrible predicament the U.S. has inflicted on itself. The way out will not be quick or painless.
Mr. Krugman, you must have meant 'debase' rather than 'abase' to describe Navarro's actions towards trump.
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.
1
Everything about the present President of the United States is "odd on several levels", Dr. Paul. You said a mouthful - that "he expects the kind of treatment tin-pot dictators demand...greeted with constant hosannas of praise." How the present crisis in our American democracy will end is anyone's guess, but chances are the crisis will bloom into the monstrous stink-flower of all time.
I am still waiting for your apology about the ridiculously false predictions you made about the economy right after the election. By the way, Paul the President's tariffs are not bad at all, as long as the Europeans do not retaliate or take action as a result of them. I say the previous as a lifelong free trader and someone who like you holds two advanced degrees. Before you shoot your mouth off about how they will of course retaliate don't bet on it. The President has created an air about him like Reagan did. Partisan hacks also claimed that Reagan was going to destroy the world. That the world was worst off because of his election. The left's pathetic arguments have been disproven numerous times which is why so many states refuse to vote for Democrats/progressives. I live in Illinois so I know all to well the corruption and incompetence of Democrats in control (Rauner is the first Republican in more than a decade and likely won't be re-elected). The President's actions have helped to level the field with other non-paying NATO countries. His perceived instability can be a very good thing for the U.S. Lastly, please remember which side of the political aisle are affiliated with socialists/communists and how you people applauded Obama's statements in response to Romney's warnings.
1
We elected an arrogant fool as president based on people knowing him from reality TV. He is then freely allowed to cherry-pick his advisors from a pool of like-minded arrogant fools. Congress does nothing because those in it have been bought by special interests. Those in power conspire to stack the Supreme Court. Could there be something wrong with how our system of government has evolved?
The economy and jobs are good. North Korea wants to talk. Where is the Russia investigation? Tariffs are on for the Pennsylvania special election. Trump, the master persuader and manipulator, is still hard at work with his cronies. He knows what to do; he has a lifetime of experience doing it.
Democrats: It's not enough just to vote. We better get many others registered and convinced that Democrats are the way out of this mess, and we must make certain their ballots are counted. Take nothing for granted; doing that is what got us into this disaster in the first place.
Then we need to figure out how to adapt our government in a way that ensures a president like Trump can never happen again.
The past 25 years of U.S. Free Trade agreements have FAILED from a business and numbers perspective. Please note: This country has been running full bore on unfettered Free Trade agreements since 2000. Our averaged growth rate, between 2000 and 2016 was less than 2%. Prior to 2000, our averaged growth rate was 3.5%. The simple math is that the economy grew at a 40% lower rate under Free Trade policies than under the tariffs and quotas that had been in place since 1790 with the initial legislation passed by congress and signed by President George Washington.
Any argument by an economist about comparative advantage or any other Econ 101 trade theory is moot. Worthless. Nonsense. The numbers can't get any plainer. Free Trade failed the United States when put into practice.
The real questions are stunning: Where would we be if we had not gambled on Free Trade theory? Where would we be now, had we left in place the 60,000 factories and the 5 million jobs lost to Free Trade since NAFTA in 1993? Where would we be now, had we not given over $10 trillion dollars out to foreign powers in the form of trade deficits? Where would we be if we had maintained our 3.5% growth rate vs. the 2% we got?
The idiocy of Free Trade is beyond debate. It hasn't worked for us and to keep talking about the theory is pure stupidity. And let's remember, Paul Krugman was the free trade sycophant to the prior three presidents. This article is nothing but hypocrisy.
1
"It was a dark and STORMY night...."
is the first line of trumps entry in the Bullyher-Litigateher literary contest. prof. Krugman, sometimes a dark horse enters the picture and "it all works out in the end. I don't know how, but it does..."
I am counting on it. It would seem to be out last and best hope.
VAT is Germany's income tax. If Us companies must pay taxes to Germany, then German imports into US must be charged US income, just like US companies pay. Not understanding this basic is why Krugman has become a laughing stock
1
You almost said it. Go ahead. Trump is implementing Putin's agenda: destabilize the western alliances politically, economically & militarily.
2
When, please, when will the Republican Party give loyalty to America rather than flattering Donald Trump? They are protecting Trump and in turn they are supporting Putin. VATs are not the issue. Putin opposes and wants to weaken the E.U. And Trump will do anything - anything - to protect himself and gain financial support from Russian oligarchs. Trump by supporting Russia and the GOP by supporting Trump are complicit in committing treasonous actions against this country. We are involved in a cyber war with Russia. Supporting Russia is treasonous. GOP wake up!
2
I am missing the days of disagreement.
Why the focus on Europe? The plain and simple answer is that the Russians want to drive a wedge between the partners in the NATO alliance and a trade war between the US and its western European allies will contribute to that effort.
Trump does what Russia wants because he's a compromised money-launderer for the Russian mob and a nefarious traitor.
Want to know about Authoritarianism? Here's what the leaders are like:
"High-SDO people are characterized by four core traits: they are dominating, opposed to equality, committed to expanding their own personal power, and amoral. These are usually accompanied by other unsavory traits, many of which render them patently unsuitable for leadership roles in a democracy:
Typically men
Intimidating and bullying
Faintly hedonistic
Vengeful
Pitiless
Exploitative
Manipulative
Dishonest
Cheat to win
Highly prejudiced (racist, sexist, homophobic)
Mean-spirited
Militant
Nationalistic
Tells others what they want to hear
Takes advantage of "suckers"
Specializes in creating false images to sell self
May or may not be religious
Usually politically and economically conservative/Republican"
More at: http://dneiwert.blogspot.com/2006/08/cracks-in-wall-part-i-defining.html
3
Thank you Paul. It was a good article!
1
“…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
2
After repeated failures to get elected to any office as a Democrat, Navarro tries his luck in the Trump clown car.
"He is a prolific writer, but has no publications in top-tier academic journals." An interesting analysis by The Economist.
https://www.economist.com/news/briefing/21715017-there-are-reasons-be-wo...
Adding to Kathrine's remark that Trump hates Europeans because they are free people, I'd say this.
Dear Leader Trump not only loves Russia's Dear Leader Vladimir Putin whose government just nerve gas-attacked an opponent and his daughter in the UK last week, but he also loves China's Dear Leader Xi Jinping who last week became yet another lifelong communist tyrant.
Trump congratulated China's Xi's infinite term in office by saying “He’s now president for life. President for life. And he’s great,” "Maybe we'll give that a shot." https://www.theguardian.com/us-news/2018/mar/04/donald-trump-praises-xi-...
Folks, this is no ordinary time. We must work very very hard this coming November to elect every congressional Democratic candidate. Only that way can we prevent our nation from being given a nightmare"shot" by Trump and his sycophants.
If you've read this much, I thank you. I want to make sure you understand that I'm not making this call on a partisan basis. I grew up under a dictatorship. And I have a great fear that my adopted nation, the United States, is slipping into such.
For all our children, yours and mine, and for all of us, we MUST!
1
Hi Paul, Germany’s current account surplus is greater than China’s. It’s 8% of German GDP. The share of consumption in their economy is 54% of GDP compared to almost 70% in the US. I guess if you tax an activity it results in less of it, huh? They run a mercantilist currency policy, linking their money to weak actors like Greece and Italy so no one wants to invest in it.
Germans of course put this state of affairs down to their virtue. Time to end the charade that we’re operating under a fair system of trade. Trump and Navarro are lunatics but know that their rise is directly traceable to the ongoing tendency of liberal (in the old-fashioned sense) economists to cling to their outdated notions of the benefits of “free” trade that are anything but.
1
@Rich888
Washington DC
"Germans of course put this state of affairs down to their virtue."
Which Rich dear boy is basically true. The Germans make superb products that people want to buy and they unlike the US have taken vigorous action to protect their manufacturing industry not with tariffs but with measures to improve their efficiency like apprenticeship schemes, subsidies to prevent layoffs during downturns, etc. Can you imagine the US doing any of this on a national scale? And no they don't have quite as much appetite as Americans for consumerism. There are also other important differences in the consumption of services like spending about 11% of GDP on healthcare unlike the US 17%. Virtue does tend to have its own reward.
2
As Professor Krugman well knows, steel is one of those commodities where the price per ton drops as you produce more to maximize the efficiency of your plant. The U.S. Market provides the consumption for excess product by German mills. This is what makes German mills profitable in their own market.
2
Two points about Krugman's piece.
First, Trump's trade negotiation position is coherent with the political goal of creating/keeping jobs in the US. The strategy is based on the old axiom of divide and conquers; ideal for a country with such dominant position in the global economy. It might work depending on how trading partners will react to it.
Second, regarding Peter Navarro as a sycophant trade adviser. In 1992, recently elected Bill Clinton summoned the best minds in economics for an informal exchange of ideas in Arkansas.
Clinton, one the smartest presidents of the post-WWII period. asked a tricky unorthodox macroeconomic policy question to the panel. Laura Tyson, an unknown professor at Berkely, gave the answer Clinton wanted to hear.
Professor Krugman gave the academically correct but politically incorrect answer. Laura Tyson got the job and Krugman returned to academia.
1
I have always thought of Trump as someone who made shrewd deals with the Genovese family -- who control concrete -- and the Gambinos -- who control the building unions in New York and Atlantic City. He apparently did well at that, as evidenced by Trump Tower in NY and his involvement with the AC casinos. He supposedly has $3.5 billion stashed away.
He also seems to have a knack for collecting fees for getting his name pasted on the front of golf resorts and such -- that one doubts that he really runs.
He has a certain talent. He does seem somewhat out of place, however, amidst the DC mob.
6
I guess Trump thinks being the first to strike is smart (North Korea, Iran, here we come!) and that America can only win, since it has more imports it can tax hurting the foreign producers than the rest of the world can hurt American producers. The sick rationale here: getting hurt somewhat less is winning the senselessly self-started war of reciprocal economic harm.
Also he escapes direct responsibility for raising taxes on American produce and can blame those nasty foreign countries, if they retaliate. And blame corporations instead of his own darn tariffs and trade war for consumer pain because of rising prices and the ensuing recession or depression.
The GOP is the party of blame deflection and distraction: it's always the other, the POC, the Obama´s, the (construed to be) foreigner, the other sex that's responsible for the plight of the American white guy, never that guy himself or the white guy hiding the welfare hammock of ultrawealth theft privilege and the psychopathy that comes with it behind the switches and levers of politically enabled market power abuse, and behind the - again politically facilitated - tax evasion niqabs.
If you try to squeeze all your gov revenue from the small slice of total earnings that the middle and lower classes make, are forced to compensate the inevitably soaring deficit with both slashing spending and with gaga borrowing, and perpetually fail to stimulate demand for sheer spite and envy, you cannot not escape the next meltdown.
4
A spade is a spade. A rose is a rose is a rose. “My function, really, as an economist is to try to provide the underlying analytics that confirm his [the Leader's] intuition. And his [the Leader's] intuition is always right in these matters.” A statement like the last man in the bunker might make is a statement like the last man in the bunker might make. Sycophancy is bad, but irrational following of the Leader gave us World War 2.
8
Has anyone else noticed how frequently lately Prof Krugman has been ending his columns with "This will not end well."? Unfortunately, I agree.
12
Peter Navarro will doubtless join the "best people" in Trump's cabinet, replacing Gary Cohn and putting the kibosh on whatever trade relationships we still have with the rest of the world. Just as Betsy DeVos, another luminary in the array of incompetents, is destroying what's left of our education system.
12
Trump is listening to sycophants who tell him that he has leverage than he does.
Since Bush II, the newspaper-reading public knows that the US can't bully the EU on trade, but Navarro tells Trump otherwise. Since the assassination of Rabin, the Israeli-Palestinian peace process is dead, but Jared claims he can fix that. Nunes tells the president that there was no collusion between his campaign and the Russians but Mueller is preparing indictments.
What will happen when this president faces a crisis that is not of his own making? Will he continue to ignore reality? I fear he will, and the US will fully understand the meaning of losing big.
4
To use a sports analogy, we can win this one at half time. Flip the house in 2018. Hog tie the remaining federal repugnant office holders with subpoenas and investigations. Win back the executive and untold state and local offices between 2018 and 2020. Begin the work of repairing our democracy for we the people with liberty and justice for all.
At last Paul Krugman utters words I had never expected to read from him: "for all its faults [the European Union] is a major force for peace and democracy. Why rush into a spitting match with our allies ... ?" Maybe he will remember that in his future fault findings. Until Trump and all his Republican sycophants are gone, what other hope have we for a rational, social, peaceful, and environmentally sound world?
3
This VAT story is priceless . . . But it is also the tip of the ice-berg. Dr Navarro has said some things about what he learned of China during his role as a Peace Corps volunteer in Thailand. As he served in the mid-1970s, what he claims to have learned is just impossible. He is a liar, like his boss.
6
Anyone who demands to be free from criticism, who will not tolerate being criticized, will become a monster. Abusive father in a family or the president of the United States, the end will be the same. As Mr. Krugman says, "this will not end well"
7
Anybody with half a mind knew before he was elected that his type would require a team of yes men, which is exactly where all of this is going, an almost cinematic scenario that congers up dark and unpleasant thoughts about a government run with the help of hopelessly obsequious minions mindlessly offering themselves up to rich, powerful, driven, often hiddenly mendacious men.
5
I feel now exactly how I felt on that surreal day Trump was elected: this is unreal and I am scared
4
Of all the sycophants in Trump's orbit -- and the list is long -- the prize winner today is the despicable Gavin Nunez, who shut down his committee's investigation into collusion without informing his Democratic colleagues.
We are in a terrible place and a terrible time in our nation's history. Even the most optimistic among us are being challenged to see light at the end of this dark tunnel.
13
And his supporters -- those who voted for him -- refuse to see his egoism and narcissism. The policies of Bobby Jindal -- a clear sociopath -- ruined our state, and yet there are Republicans who refuse to face the reality that we've gone from a billion dollar surplus to a billion dollar deficit. We're at the bottom of every quality of life indicator. Between tourism, growing tech, and oil, we should be booming -- but no. All they can do is scream that Democrats and taxes are bad.
So America, y'all ready to become Louisiana?
11
"This will not end well"
Whether "this", whatever that is, ends well or not, I want to see Mr. Trump and his factota/sycophants ousted from governmental power as soon as possible.
Matters of course have gone and will continue to go from horrible to even more horrible to horriblest, so long as Mr. Trump remains as USA president. If there is any doubt to the attitude towards the horror of Mr. Trump as president amongst Republicans in the current Congress, one only has to ponder the actions of the Republicans on the House Intelligence Committee who have done everything that they can to avoid and obstruct investigation into malfeasance at all junctures by Mr. Trump and by his bizarre coterie of family members and hangers-on. The latest grossly irresponsible action by those Republicans is the "report" that they have issued which supposedly finds no collusion between the Trump campaign and Russian governmental representatives nor evidence of an effort by Russian officials to favor the election of Mr. Trump. Publicly available reporting shows that both occurred.
Thus removal of Mr. Trump will never happen, no matter how condemning the findings from the Mueller group, while Republicans control Congress.
I suspect that the findings of the Mueller group will be along the lines of "Mr. Trump shoots someone dead on Fifth Avenue". But the so-called base of deplorable Trump supporters will cheer him on and Republicans in Congress will continue see, speak and hear no evil.
2
There are special elections all year and the big one in November. The best and only hope for reining in Trump and his nefarious ilk is to vote Democratic in all of them. Not voting cannot be an option. Voting is our last, best and only option. Exercise it.
1
So now Navarro is telling us that economic policy of The Most Corrupt Administration in Modern US History is being guided by..
Trump's Intuition
Perfect.
11
“His instincts are always right.” So I guess that means that the job of his administration is to “Move the People towards the Trump.” Those readers who know history will understand this reference.
5
"This will not end well."
Paul, how do you know that it will end? I fear that the Trump Presidency is a nightmare that the U.S. will never wake up from.
6
Sycophancy is actually such common behavior in our culture, it is far more shocking if it is absent.
1
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.
5
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
5
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.
4
Just imagine who is going to advise and prepare Trump for the North Korean meeting. No this will definitely not end well.
7
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!
4
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?
3
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.
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.
2
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?
1
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.
450
manfredm - BRAVO to you for your excellent comment.
4
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.
1
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.
1
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!
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.
412
Isn't it likely that the hold is the money laundering that has created the illusion of Trump's fortune?
5
I can come up with two reasons for Trump’s slavish devotion to Putin. Massive money-laundering with Russian oligarchs, and/or hooker tapes. If either of these exists, and were to come out, Trump’s fragile ego and shaky public image would be destroyed. Nothing else makes any sense. Occam’s razor applies here, too...
11
The investigation AND his tax returns.
2
"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.
2
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.
3
I'd love to see his undoctored Wharton transcripts after he reveals his taxes.
1
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.
2
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.
"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.
574
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.
4
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.
2
I Hope That's Not True. But?
1
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".
1
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....
1
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.
1
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.
330
The system didn’t self-correct, a foreign power toppled their government. I’m hoping for a better outcome here.
11
I am not so sure that Trump would not behave as Saddam Hussein did to consolidate his power: Saddam took dissenters against his rule out behind Parliament while the vote was going on and shot them in the head.
Trump is so insecure in everything that they only place he feels comfortable is at his rallies where his fans cheer and yell. He loves the adoration as their god and wonders why he is not getting this from the rest of Americans.
2
In Saddam's case it took intervention by the USA. Who will intervene for us? Canada?
3
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.
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."
1
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?
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.
771
It is important to remember that populism is just a set of techniques for a minority to claim power. It has come to be associated with a movement of the poor, but it can just as well be a movement of the rich, such as it is now. Here is an excellent article making this point:
https://www.salon.com/2017/11/25/donald-trump-a-populist-who-wages-class...
"Democracy is endangered and about 40% of voters are clueless participants in this process ...". Fortunately, we have the likes of you to indicate errors and point the hoi polloi in the right direction. Perhaps only people who have high opinions of themselves (perhaps people like you) should be allowed to vote.
BTW, tell us how the Obama-Clinton axis led to the prosecution of the banksters who led the country and the world into the worst economic downturn since 1929. Yes, they, too, talked down to the "little person" and promised all kinds of goodies - "yes we can." Yes, we can protect our paymasters on Wall Street; they just left out the rest.
Yes, let's overlook Obamacare. Didn't help anyone, did it. And let's ignore the majority GOP, blocking anything offered by the Dems.
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.
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.
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.
2
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.
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.
6
"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...
3
"(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.
836
Harry - Thank you for your very accurate comment.
3
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...
2
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".
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.
3
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.
2
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?
1
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.),
3
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!
2
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.
4
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.
1
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.
2
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.
1
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.
1
"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.
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.
2
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
24
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.
4
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."
24
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.)
44
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.
41
Sadly, most don't read... they just listen to what they want to hear.
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.
2
My goodness, what is the big deal indeed. There is so much information available on this right now, it’s astonishing to find anyone who would ask that question.
2
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.
3
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.
"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.
25
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.
2
Verdict first, evidence afterward (if at all).
12
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.
10
I don't agree with you. If China expanded its production of steel 10 times, trade barriers are only a small part of the story. The main part of the story is that the Chinese state and the Chinese province governors (who want to please Bejing to improve their career prospects) ordered Chinese banks to lend massively to Chinese companies, especially state owned ones, to increase production and provide jobs, thereby meeting that 7% growth target and ensure social peace. The result has been a massive oversupply of steel on the world markets. This resulted in dumping conditions, since all these Chinese producers have to get their wares sold. This put European and US steel producers in deficit and even bankruptcy, while on the other side Chinese suppliers could continue to churn out steel at a loss as they had unconditional support of their banks. Who cares about sales prices, when you don't really have to repay debt?
This is the reason why Europe imposed anti-dumping duties on Chinese steel and went to the WTO.
The same story, by the way, also happened in other industries: solar panels, wind power...
51
To say that the average tariff in the EU is 3 per cent is true. that means if some specific tariffs are 10 percent others are non-existent. Why is it you cannot understand that?
36
Excellent analysis, SJP, and one that should have been raised when Professor Krugman took questions a few days ago in trade. As I understood comments of his several years ago, he is not against protectionism under any and all conditions, and I wonder how he proposes that American, European and manufacturers in other parts of the world deal with China about policies that have been and will be ruled anti-competitive by the WTC.
11
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.
38
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])
18
Brilliant suggestion! I hope you keep reaching out to anyone with a public platform who can make this case and push it into reality.
2
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.
"Ask them what percentage of their taxes they would like invested in each of the following: [areas]"
Congress allocates tax revenues, so you should contact your members of Congress. Visit congress.gov/members.
And before you over-simplify things, look at the US budget. Google "us budget site:gpo.gov".
1
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.
47
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.
1
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.
88
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
52
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.
18
"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.
87
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.
45
There is only one way to end America's descent into tinpot dictator rule by fiat and chaos. People have to vote them out. The decision by many African-Americans, Hispanics, women, Millenials and other younger citizens not to vote for Hillary because she wasn't Obama, wasn't liberal enough, wouldn't give enough free tuition to the student cadre, etc., has placed our republic in grave jeopardy. And it's not a game. I gave up long ago expecting most citizens, devoid of concern for the common weal, to serve in uniform or the Peace Corps or Habitat for Humanity. Is it asking them too much to pick up a ballot?
4
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?
3
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?
19
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.
4
In your example country B, assuming that would be Europe in this example, has low income and corporate taxes. But the EU as a rule have very high tax levels compared to US (we have single payer health care and education). Am I missing something here?
13
In actual fact, when you add federal income tax, state income tax AND, in many instances, city income taxes to state & city sales taxes, USA is highly taxed indeed.
4
A sales tax has the same effect, which is what Mr Krugman said. It is a consumption tax. How much you use that as a source of revenue versus other possibilities, is up to each country/state to decide. Same with income, corporate taxes and so on. They are all taxes on the individuals and corporations in that country. A tariff is a tax on corporations in other countries.
2
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.
8
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.
37
It worked out well for Laffer.
11
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.
12
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.
7
Let's hope there will never be a musical called "Springtime for Trump."
1
I think it is a reference to "Springtime for Hitler."
1
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.
1
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.”
2
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.
2
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!
1
"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.
28
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.
29
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.
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.
20
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.
14
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.
1
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.
2
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 $
1
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/
17
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.
92
"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.
1
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?
4
The German Mark...hello? This currency ceased to exist a while ago...also its called value-added tax, the percentage concerns a good's value independent of currency. (but susceptible to exchange rates) As the Euro trades far higher than the Dollar, there would be a benefit for American goods in your scenario.
12
DM are no longer used as a currency for trade. They are no longer legal tender. The rate you quote is what the German Bundesbank will pay in Euros (about 1 euro for two DM) when they are turned in at the bank. It is a fixed rate. The 1.6 rate to the dollar is derived from the current euro/dollar exchange rate. So adding DMs to you argument adds nothing and misrepresents the currencies in which international trade is carried on. Moreover, German national debt is now about 68% of GDP, falling from about 80% in 2010. US national debt, meanwhile, has increased every year to about 100% of GDP, thanks to Republican tax and spend on war and the military. The US dollar is still the world's reserve currency and most trade takes place in dollars, so the US has had a tremendous advantage in international trade. We print more dollars with no gold reserves and others must trade in them. This is the situation that should worry us, because it is already fraying. When trade is based on the value of a basket of currencies based on computer algorithms, the purchasing power of the dollar will fall. This will not worry the top 1% in the US. They already hold wealth in other currencies and in precious metals. If you want to scare yourself, read the articles about the coming collapse of the dollar.
9
How long since the DM (Deutch Mark) was replaced by the Euro, and ceased to be legal tender?
11
"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.
24
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.
47
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".
https://en.wikipedia.org/wiki/Peter_Navarro
"I'm With Crazy": TRUMP 2018
307
Wow, good one Socrates. No doubt, Professor Krugman got it right - no surprise, I know - when said "This will not end well".
5
“…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
1
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?
2
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.
10
"... you have to tax something."
You completely missed Krugman's point, which is that the VAT is applied *equally* to imported and domestic goods in the EU.
Krugman is NOT making a case for or against VATs.
14
“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.
5
You are totally wrong! German employers & employees pay for health insurance. The difference is that they pay to non-profit health insurers. The VAT tax is just like a sales tax. Please note how much better Germany’s infrastructure is than the US’s!
2
"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.
26
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."
4
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.
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.
'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.
126
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"?
2
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.
7
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.
15
The myth that poor Americans voted for Trump because they felt abandoned by the Democrats is a well disproven claim. First, it was rural working class who went for Trump not all "poor" Americans (like urban working class) and this demographic agreed overwhelmingly with Clintons stances on jobs and the economy over Trump. This is how we know this wasn't about economic insecurity but cultural insecurity. Most of Trumps supporters are middle and upper middle class and not working class.
13
Wow, I live in California, and I don’t know this Malthusian fellow you mentioned. I see a state that is smart, well-governed, and progressive.
3
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.
67
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.
32
"for having such a leader as Trump forced upon you ..."
OH no, we did this to ourselves. Ignorant is fixable, STUPID IS FOREVER.
1
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.
11
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.
3
Trade deficits are partly determined by the savings rate of the countries involved.
1
“…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,..”
1
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.
8
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.
45
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.
6
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.
29
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...
40
It sometimes seems that Republicans tend define truth as what the boss says, and Democrats tend to define truth as science.
29
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.
6
“…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
1
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.
20
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.
6
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).
13
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.
1
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.
15
“…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
1
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.
31
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.
14
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.
183
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.
1
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.
6
My boyfriend and I studied Germany and Nazis. So did Trump. Trump has frightened us as a result of out studies. This will not end well for our country.
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.
11
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.
4
It doesn't matter that the VAT is higher than US sales tax. The consumer price of goods imported into Germany includes the VAT, so imported goods are priced equally to domestic product. That is fair trade. Conversely, the US has no VAT, but does impose tariffs on imported goods, which evens out the playing field, or gives a slight edge to domestic. US sales taxes are irrelevant to this equation.
26
Frank, you seem confused. Shouldering a tax burden is not a duty (pardon the pun) of a corporation. Paying taxes is their duty. If they pay the same taxes in the same market, the competitive effect is negligible. That is what Trump/Navarro seem not to know.
34
I agree it is a humble opinion. If the goods were made in Germany, buyers would pay the same VAT. No "extra tariff".
9
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.
78
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.
45
I bet bone spurs also kept him out of Vietnam. Who knew it was a contagious disease.
1
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.
136
@ 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.
4
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.
1
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.
7
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.
18
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.
20
Yeah, I really do think that President Obama's White Hiuse featured "ribust debate."
Because not only did he not hire toadies, but the man's a genuine academic, and that is what they do.
His faults as a President may have come out of that--they lkely did--but debate and reasoned argument and being forced to look at inconvenient truths?
Yeah, pretty much.
5
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.
96
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 ...
2
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
754
Socrates, the only definitive negative in this post is the comment of Marcus Noland. The rest is simply noting that he disagrees, with no indication of what's wrong with his views.
I agree he's an obvious idiot, but your quotes mostly are not good criticisms.
5
After consuming Mr. Krugman's column and the "The G.O.P. Accidentally Replaced Obamacare Without Repealing It" op-ed in today's paper and being reminded of Sen. Orrin Hatch's disrespectful "dumb ass" comment -- it's clear Republicans don't understand economics and don't read the fine-print. Few appear to have thoroughly read the thoughtful, intelligent Affordable Health Care for America Act (aka Obamacare); slightly larger in length than a Harry Potter book. Mr. Navarro's inflated opinion of himself and Trump underscores how two screwballs found themselves rotating around a familiar sun: egos run-amuck.
15
@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?
15
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.
78
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.
9
And now it’s Peter Navarro, a day after Charles Blow accuses Melania of “knowing” about Trump’s extracurricular antics while married … and implied that she cynically didn’t care. I thought it now reasonable to ask “What did Barron know?”
This has become next-level. There will come a time when Trump goes, gently or otherwise, into whatever dark night former presidents go, and we’ll have another president – might even be a Democrat if they can get their collective act together. Just as Don Imus summoned Howard Stern, opposed pundits then will define yet another depth of viciousness to attack that president for his or her ideological views – by whatever pretext they can invent out of whole cloth.
A “czar” assigned important duties and willing to put up with a lot to take his shot at making his own dent in history, however small, is now held up as something … astonishing, and as an active agent of evil. For doing his job.
Not just Navarro but a lot of other people, as well (including me), believe that our trade policies have favored trading partners for decades, putting geopolitical objectives in aid of a Pax Americana ahead of the protection of our middle classes. The result? A hollowing-out of our middle classes.
Navarro and Trump want to renegotiate those agreements to better protect our own. That doesn’t make one an idiot or the other a sycophant. If you disagree, effectively responding is easy: not an op-ed but electing more Democrats who agree with you. If you can.
4
The famously right-leaning sarcast fails to find fitting formulas for parallelisms. Once again.
45
Okay, so first off those responsible for the hollowing out of our middle class are the CEOs who've spent the last few decades laying off or underpaying their employees thanks to computerization, outsourcing, union-busting and plain old greed. They've been helped along by the politicians they've owned (mostly, but not exclusively, Republicans) but...trade policies? Not so much. Millions of good-paying jobs have been created by globalization- as you well know, assuming you don't work in the collieries.
Next, Democrats have frequently expressed their displeasure with presidents of their own party- Lord knows I did, especially when Clinton was around. (Funny; I've yet to read a single negative comment from you as pertaining to the pretender from YOUR party.) Then again, how many times did Obama shame the nation to an extent where he needed sycophants to defend him? Boss Baby does that several times a week, and with him it's hard to distinguish between the sycophants and the psychopaths. Either way, there's plenty to go around.
43
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!
30
"mature economy" (above).
2
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?
10
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.
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.
Hypocrite.
6
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?
2
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...
273
It has already hurt our whole country and the world.
4
@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.
5
Sooner or later, it will hurt not only the Trump Administration, but our whole country - and perhaps the world.
It already has.
He hates them for their freedom.
38
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......
1
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.
107
"US firms can simply register in the EU country where they sell and get the VAT back."
That would strongly favor very large US firms, which can afford that overhead for access to the market.
11
I think you still don't get it. You don't get VAT back unless you are leaving the country with the product immediately after buying it. You should spend a few minutes in an EU international airport. "VAT REFUND HERE". Long line.
None look like CEOs of American companies.
This is so simple it might be used as an IQ test.
7
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.
1
Access to power is however remarkably attractive, the question then is how to make standing on principle increasingly important.
35
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.
7
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.
1254
Well said, David! Thanks--you gave me a well-needed laugh at this deplorable situation.
6
And we can change that in November by voting the Republican sycophants out of office!
12
David, keep the pressure up. Just keep it up!!!!!!
3
Good column, but the comments are better written. Copy editors should have cut 20 cliches. Count them.
15
I took your advice and counted. You’re wrong.
2
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
123
“…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
3
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.
546
They are surrounded by like thinkers or should I say, like non-thinkers.
7
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.
1
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.
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.
422
I must disagree with one of your points. Our country would be much better off if Trump had, in fact, chosen our Attorney General by randomly picking a name from a professional directory.
16
You're assuming that T knows what the internet is and/or how to use it.
6
And then there's Ben Carson at HUD . . .
5
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.'
240
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.
578
If a Republican is again elevated to the Presidency, I predict Trump will be subverted, i.e., a lower level will be set. This has been the case consistently since Eisenhower, excepting Bush Sr.
10
"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!
7
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.
3
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?
132
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.
---
https://www.rimaregas.com/2016/02/25/finding-sobriety-in-2016-sanders-cl...
150
Funny you should mention that it's Trump biggest dream to establish himself as a dictator for life, Rima. Everyone feared that FDR was on the road to becoming a dictator for life when he broke with George Washington's unspoken tradition that a president would serve 2 terms when he declared he would run for a 3rd term in 1940. That's why the 22nd Amendment to the Constitution was adopted in 1951 which would officially limit the president to 2 terms in office. Nixon wanted a the 22nd Amendment repealed so he could run for a third term. Trump would also have to demand that the 22nd Amendment also be repealed to achieve his nefarious dream of becoming President for life.
2
I wrote the following in reply to your earlier comment, then debated whether or not to post it. Then I followed your link. Yes, you did all you could to stop Hillary. So stop complaining. You were warned.
Well, Rima, you did do all you could to make sure Hillary didn't win because, well, if you couldn't have Bernie, then you might as well take Hillary down a peg or two--or maybe enough pegs to make sure she'd never become president because, well, because she is, horror of horrors, a centrist and an establishment figure and a neoliberal who never did anything good for anyone. When people told you to stop attacking her, that you were aiding and abetting Trump, you self-righteously insisted you were simply telling it like it is, all the while touting your own pure intentions. Let the chips fall where they may you insisted. So they fell as you were told they risked falling. And still you're not happy.
16
How desperate does a Trump supporter have to be to raise the specter of FDR as a threat? They know no shame, nor much of anything else.
3
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.
150
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."
854
It was never going to end well for a third of Americans who lost their jobs to the Great Recession, and for whom restoring their place among the ranks of the middle class was never in the cards.
It was never going to end well for as long as Blue Dog Democrats who can't be bothered to spend the two years in between terms (House) and six years in between terms (Senate) having an honest dialogue with their voters and explaining why moving to the center with a GOP that's gone off the deep end and completely sold out to corporate America would be very bad for them. Instead, Senators like McCaskill, Tester, Manchin, Heitkamp and others prefer to vote with Republicans on a bill that will allow Equifax and others to have more security breaches and not tell consumers about them, banks to discriminate against Blacks and Latinos on home loans and, most important of all, roll back Dodd-Frank all the way back, to finish the setup of the mother of all bubbles that this Republican Congress set up throughout the past year.
Next recession will be a Depression and the Fed won't have the tools with which to fight back, as it did in 2008, nor will the precariat have savings with which to weather the storm that will undoubtedly come.
The sad thing in all this is that the centrist media, including NPR, is painting a rosy picture of the economy and Trump will get credit.
---
https://www.rimaregas.com/2016/04/01/is-another-recession-looming-secula...
186
Between elections, Rima. A minor flaw in an all too relevant cynicism.
8
Rima, you speak of the centrist media, including NPR, painrting a rosy picture of the economy. I gave up listening to NPR awhile back - it touts a corporate line in most everything, unfortunately. As for the rollback on Dodd-Frank, a good source of these shenanigans for me has been "Wall Street on Parade."
14
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.
32
It's not going to advance his career very much in the long run.
49
Not everyone is a sell out, MEM, even folks who are not rich or well known. Sometimes integrity is priceless.
61
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.
10
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.
329
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.
12
@Ed - Our country is in grave danger when the majority in 1 of our 2 major parties favors postponing the 2020 election(s) if His Unhinged Unraveling Unfitness says it's necessary:
https://www.washingtonpost.com/news/monkey-cage/wp/2017/08/10/in-a-new-p...
Constant vigilance by Progressives is required - Resist !
6