Donald Trump

'Free-Market' Conservatives Welcome Their New Protectionist Overlord

Even Larry Kudlow is calling Trump's tariffs a "growth action."


Today, the Republican president of the United States made the kind of economically illiterate argument that Republicans have been mocking for longer than I've been alive:

Trump was referring here to his mutually threatened trade war with China, which minutes before this tweet he had insisted "We are not in," because "that war was lost many years ago by the foolish, or incompetent, people who represented the U.S." You can't fight a war you've already lost, and so that's why we must fight, amirite?! (Also, the U.S. trade deficit with China isn't close to $500 billion; the president is once again pulling scary-sounding trade stats out of his arse.)

Conservatives used to know damn well that trade deficits don't matter, budget deficits do; not vice-versa. Here's Uncle Milton Friedman making the succinct case about that, and against steel tariffs, 40 years ago. But now that a populist protectionist has taken over the GOP and the White House, that new song is getting sung right out loud:

We have already seen opportunistic heel-turns on trade from the likes of Mike Pence, Reince Priebus, and Stephen Moore, as well as a big opinion-shift among the Republican electorate (Democrats, bless their hearts, are already there). But could we be witnessing the same pattern from new Economic Council Director and lifelong free trader Larry Kudlow?

Let's hope not. But today, Kudlow was certainly whistling a different tune on China from the White House than he did from his CNBC desk during the Obama administration. Asked by reporters to respond to the market-roiling news that China was announcing retaliatory tariffs on $50 billion worth of American goods, Kudlow implausibly characterized the president as a "free-trader" who "wants to solve this with the least amount of pain." He then added: "This is a growth action. I can't emphasize that enough."

The best you can say about Kudlow's rosy interpretation is that he's doing what it takes to have access to a Mercantilist president's ear. A less charitable explanation is that proximity to power corrupts analytical integrity.

During Obama's first term, when the then-president slapped duties on Chinese tire imports, Larry Kudlow repeatedly warned that a "trade war with China" would be "a disaster." A "Smoot-Hawley protectionist trade war," he cautioned in June 2010, "is the last thing we need right now." Also: "A message to all those people blaming China for our slow, jobless recovery: Shame on you. Stick to your own knitting." Even "the threat of higher tariffs," he wrote that October, "only adds to uncertainty and weakens the foundation of growth."


It's "not about trade wars," Kudlow insisted. "This is about holding to the laws and customs of free trade and holding violators to account. It's not about war."

Kudlow would not appear to be on the same page as his new boss.

Reason on Trumpian trade here.

UPDATE: I forgot to include one of the greatest trade-policy quotes in the history of cable news. In March 2011, Kudlow featured on his CNBC program the one and only Donald J. Trump. Who said this: "I have a son, and he loves little airplanes….Most of them are made in China….He has so many of 'em….If he had half of 'em, and if they were made in this country, I'd be very happy…and he'd be just as happy."

NEXT: Hey, Beltway Denizens: Spies Are Tracking Your Phones, So Maybe Don't Ruin Encryption


  1. Looks like Trump’s America killed the AM/PM links.

      1. Well played.

        But no.

        NO HELLO.


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    1. I tried PM Links yesterday. Barely anybody responded.

      1. It’s too hard to find it deep in a random thread.

  2. During Obama’s first term, when the then-president slapped duties on Chinese tire imports, Larry Kudlow repeatedly warned that a “trade war with China” would be “a disaster.” A “Smoot-Hawley protectionist trade war,” he cautioned in June 2010, “is the last thing we need right now.”

    It’s pretty obvious to everyone but Welch and the Reason anti-Trumpers that Obama wasn’t the shrewd negotiator that his successor is. WE STAND BEHIND OUR PRESIDENT’S SEEMINGLY DISASTROUS TRADE POLICY BECAUSE HE KNOWS WHAT HE’S DOING.

  3. Reason is going to look so stupid when Trump beats the economy. I guess it’s not their fault that they don’t understand his amazing plan to win trade by making others lose. So Easy!

    1. He should set up a Trump Yyyuge Gains mutual fund with no MER!


    I’m sure the “trade deficit” thing has been explained to him many times as well.

    “It is difficult to get a man to understand something, when his salary ego depends upon his not understanding it!”

    1. He only believes things Fox & Friends say. I don’t understand why they aren’t instructed to say intelligent things, if only out of a sliver of patriotism.

      1. Dear God, he’s immersed himself in a circlejerk with conservative TV personalities instead of the actual advisors all around him.

        Or, rather more startlingly, the advisors seem to have been bent to feed his ego instead of advocate good policy.


        1. His ego is such that he’ll override any advice with his own superior wisdom. Why he doesn’t apply that same skepticism to Fox News is kind of the genius of Fox News. It grabs your brain by the nuts and doesn’t let go. Add it constant Trump flattery, and now one of our crazy uncles is the president.

          The depressing thing is that apparently the Murdochs or whoever controls that crap now apparently don’t have any kind of agenda beyond “keep the Trump base angry and keep selling ’em gold.”

          1. Tony, I have to admit, I didn’t think you had that sort of harsh criticism of Obama in you. But don’t let it be said I won’t give you credit. That is probably the best description of Obama’s character I have ever read. Bravo.

            1. I know you are but what am I! Nice John.

              Obama has an ego but he is sane. And he actually did go to the best schools.

              1. It was a great post and a very good description of Obama. I honestly didn’t think you could ever criticize a Democrat that well. You should mark this post and link to it the next time someone accuses you of being partisan.

                I am giving you a compliment Tony. Don’t be so mad.

                1. You’re as clever as Donald Trump.

                  There’s one for you.

                  1. Damn Past Me, that’s actually a pretty good burn. You’re calling him an idiot, but he can’t dispute it without saying Trump is an idiot. Well played.

                    1. You’re as clever as Tony.

      2. Because it is rewarding to please the almighty leader.

        Look at what is happening with Amazon now under attack. It is all really about Bezos and Wa Po. Trump is out to get him.

        Then the ATT / Time Warner deal is being blocked. That is all about punishing CNN.

        Murdoch wants to sell off parts of Fox to Disney in a sweet deal. He will keep Fox News and sports. He needs to get FCC aproval. He will get that and keep Fox News which is a huge money maker.

        Trump backed his toady station owner Sinclair which is also in a merger deal.

        Always follow the money. Trump will hit back at anyone who doesn’t please his ego.

      3. Ainsley Earhardt is a Gamecock, not a Clemson Tiger.

  5. You’re not supposed to understand every move in eleventy-dimensional chess, Welchie.

  6. Why would a man like Kudlow sacrifice his dignity and his integrity in order to be in the presence of an unprincipled serial adulterer with a penchant for bankrupting businesses and with a propensity for prevarication?

    1. Because he got a look at the short list of nominees and the name after his was Cramer.

  7. All of the arguments that support the idea that trade deficits don’t matter apply equally well to deficits. Deficits “don’t matter” it is claimed because we just owe the money to ourselves. The government borrows the money from other Americans or willing foreigners and the interest that is paid on it just ends up back in the economy. That is no different than the claims about the trade deficits not mattering. We buy this stuff with money that we borrow from overseas and that money ends up coming back to our economy and we end up with all these great stuff.

    Understand that the books have to balance. So if the US buys $300 billion dollars a year more in goods from China than it exports, it must take back $300 billion in cash someway either in a surplus with some other country or in the form of foreign investment to pay for those goods. The money has to come from somewhere. And the people who claim that trade deficits don’t matter, are just saying that borrowing money doesn’t matter, which is the same thing the people who claim deficits don’t matter are saying.

    Maybe both are right. We have had a lot of trade and budget deficits for a long time and it doesn’t seem to have affected us much. But Welch is being very disingenuous to claim that the two positions are in principle any different. They are not.

    1. OT:

      Were you thinking of or borrowing from Cheech & Chong’s song, Mexican-American, earlier today when you told Ole-Mex that he got a C in conversational Spanish? Its what immediately came to my mind and the song is funny. The line in the song I think is “Mexican Americans love education so they go to night school and they take Spanish and get a B.”

      1. That is exactly what I was thinking of. You got the reference.

        BTW, I saw Kieth Olberman on PTI last week and he was shockingly sane and good. What has the world come to?

        1. Watchmen is the real universe, where we won in Vietnam and didn’t go insane. Since we lost in this universe, we’ve slowly all been going nuts.

        2. Yeah, there was one night last week where I saw him with Kornheiser. He wasn’t his normal insufferable self, if that is what you mean by sane and good.

          1. He really does know sports. And he seemed oddly humbled and self aware. He was really good and a lot better on that show than Wilbon.

            The Golic and Wingo show has turned out to be very good I think. Wingo is just an upgrade over Greenberg.

            1. No doubt he knows sports and he has, at times, offered some good perspective. I would be an idiot to think that the guy doesn’t have a good command of the sports world.

              My jury is still out on Golic and Wingo. I like both of them. I do not like that they include Mike, Jr. in the first hour.

              Funny, this morning I caught a little bit of Greenie’s new show while going back and forth with Golic and Wingo and MSNBC. I don’t like the format and I can’t stand that Michelle Beadle.

              I really like Booger McFarlane, though. He is a great #2 or #3 guy for a show. I always liked him when he was on with Mike & Mike. He’s funny and insightful. He plays well off of a whole host of characters, including Finebaum. John, if you or I were the host and he was the co-host, he would find a way to play well off you or me.

              1. Who decided Michelle Beadle is any good? She is not particularly good looking. She is not smart. Is not a former athlete. Who did she blow to get that job? I just don’t get it.

                1. She is not particularly good looking.


    2. Well, (I think) libertarians argue that government budget deficits are harmful but trade deficits always work themselves out. I don’t think anyone thinks igniting a trade war with China is good for the US.

      1. The reason why trade deficits “work themselves out” is because people claim that the money sent overseas comes back in the form of foreign investment, aka it is borrowed. That is the same argument made for why deficits don’t matter just in a slightly different form.

        Do me a favor Tony, don’t respond to arguments you don’t understand. I am well aware of the various arguments here. I would be happy to try and explain them to you but you are dumb as a post and take pride in being so. So, trying would just be a waste of my time. So, stop wasting my time and posting responses like this one that don’t make any sense and do nothing but highlights your ignorance of this subject.

        1. Could you explain them to me? I’m Future Tony and I still don’t get it.

          1. I just did. Trade deficits are alleged not to matter because transferring money doesn’t matter. We just send money to them and they send us goods. The balance of money or goods going, either way, is irrelevant. So, is the fact that we are borrowing the money and sending it back to them.

            That is the same principle underlying the arguments that deficits don’t matter. Deficits don’t matter because we are just borrowing money and sending it back in the form of interest and government spending. The money stays in circulation and is such shuffled between the government and the public just like money in international trade is shuffled. Both arguments rely on the assumption that no exchange of money is ever bad even if the money is borrowed since the borrowed money just gets put back into the economy either way.

        2. That’s not the same argument for why “government deficits don’t matter,” which is about the nature of fiat currency. Both are, however, justified historically only because the United States happens to be the world’s dominant economy. We’ll probably be able to test the theories when Trump undoes all that through sheer stupidity.

          1. We had 8 years of Obama stagflation and close to zero growth. I think the economy will likely survive 8 years of Trump’s 3 or 4 % growth in pretty good shape.

            1. You don’t even believe the crap you say, which is why you’re such an asshole.


      What does China (or whoever) do with the dollars it receives?

      1. The theory is that it sends them back in the form of foreign investment. Another name for “investment” is a loan. We are financing these deficits by borrowing money. And the reasons given for why they don’t matter are the same as the reasons given for why government deficits don’t matter. Welch just pretends they are different because he likes trade deficits but not government spending. That is nice but they are not different.

        1. But they are different. For starters, a trade deficit isn’t actually a thing. If there’s a deficit in some transaction that you were a part of, that means you got cheated or robbed. If you got what you bargained for, then it was a fair exchange and there is no deficit.

          Anyway, a government will typically get almost all of its revenue by force. The more debt it incurs, the more it has to extract from the populace by force. That’s why government deficits are generally bad. The people are forced to pay a debt they did not incur.

          If you’re against open trade among private individuals and companies that reside in two different countries because some of the currency involved is being used to buy government bonds, which said government can only repay by using force on its populace, then it sounds like you have a problem with the way the government acquires revenue. If you’re against open trade because you think too much currency is flowing one way and too many goods and services are flowing the other, then that just doesn’t make much sense.

          1. The reasons why people claim they don’t matter to the economy are the same. You can dislike one but not the other for moral reasons sure. But you cannot claim there are no economic effects of one but are of the other. And the trade deficit is just as real as the budget deficit.


              A trade “deficit” matters a lot to the economy. It’s a good thing. It means trade is crossing political boundaries.


              The economic effects that you’re complaining about are basically just the government taking on more debt. For a government deficit, this necessarily occurs every time. For free trade across political boundaries, it is not a necessity that the currency exchanged is then used to loan governments money and the fact that it may happen is no justification for tariffs or trade wars.

              It sounds like you have a big problem with governments borrowing money and then forcing others to pay their debts. I’m with you on that, but increasing taxes isn’t the solution to that problem.


            I’ve never heard the word “deficit” used that way. It means simply that incoming money is less than outgoing money. There are cases where the existence of a deficit in an account implies a crime of theft or embezzlement, but that’s not always the case. People have talked of trade deficit and budget deficit and attention deficit for decades if not centuries.

            Foreign “investment” has negative consequences as well. It means that the returns from the investment will be sent overseas instead of kept in the US, as would have happened if a domestic investor had made the investment.

            1. Why didn’t the domestic investor make the investment?

      2. Buys oil and gold (not from us), an ever decreasing number of Treasury bills, and a shit ton of real estate in other countries.


      It can also come from savings or, as is often the case nowadays, from the Bureau of Engraving and Printing.

    5. John, there are a couple points that cause your argument to break down.

      Budget deficits are problematic for private entities mean higher expenses than revenue, which will lead to bankruptcy unless it is somehow rectified. A company that imports more than it exports does not necessarily run a budget deficit, however. Turning a profit means creating more value in the outputs than the inputs used. At the aggregate national scale, companies can import more than they export and yet be profitable, meaning creating more value. Importing more than exporting (a trade deficit), thus, isn’t in itself problematic.

      For public entities, deficits are a problem generally in the same way high levels of government spending are a problem. Since government spending is raised through taxation, price and profit-loss signals don’t function as well to allocate resources as they do through voluntary transactions. Additionally, governmental bankruptcy is also a potential problem with governmental budget deficits as with private budget deficits, although governments declaring bankruptcy is rarer.


      Foreign investment is foreign ownership is foreign control.
      I don’t want to live in a company town owned by the Communist Party of China.

  8. It is not just economics. To quote the late Abba Eban. “His ignorance is encyclopedic”

    1. His critics’ dishonesty is encyclopedic. So I am not sure they should be throwing many stones. And Welch’s understanding of economics consists of cherry-picking various arguments that support whatever end he wants

  9. Say what you will about Trump, but he’s revealing many so-called ‘Conservatives’ as nothing but liars and/or Progressives. You can tell the difference by the one’s that change their opinions just because a Republican is in office.

    1. Conservatives are not libertarians. There has always been a strain of conservatism that embraced protectionism in some form or another. It is just that recently the conservative establishment became a species of particularly stupid libertarian and decided that absolute free trade was the only acceptable position because “PRINCIPLES!!”. Principles that are magically forgotten when it comes to drugs or anything conservatives don’t like.

      Basically, all of them, Prog, Libertarian, Conservative alike are economic illiterates who see economics as a source of convenient arguments to rationalize whatever benefits them.

      1. To be fair, economic literates (aka professional economists) also see economics as a source of convenient arguments to rationalize whatever benefits them.

        1. yes. that is known as Macroeconomics. The entire field is an elaborate hoax that allows people to convince themselves that there is such a thing as a free lunch and that it is possible to spend your way to wealth.

          1. “Tax cut our way to prosperity” is also a hypothesis depending on macroeconomic, even Keynesian, rules, just stupidly and cynically applied.

            1. I don’t see how this is a hypothesis. It’s as self-evident as they come.

              1. For the short-term interests of the people whose taxes you cut, sure, but they’re justified as a sort of Keynesian stimulus. Of course I’m sure we both understand what bullcrap that is, and is only employed to sell it to poor rubes who won’t benefit.

            2. Nothing says rationality like claiming taking people’s money and spending it for them is how you create wealth. You called it dude. But again, you really pegged Obama above. It was the best post you have ever done.

              1. Nothing like arguing against the very concept of civilization to justify a specific bad policy.

                1. If government spending = civilization than it’s really no surprise that you’re a barking mad socialist.

                  1. That’s simple but not a terrible definition. Name me a civilization that didn’t have a government spending money on things.

                    1. If government spending = civilization, than surely the highest form of civilization must be the one where the only spending is government spending. If you don’t look too close at the body count, and if you tilt your head while squinting, it almost looks like it functions.

                    2. Your logical fallacy is “that’s retarded.”

                    3. Rome.

                    4. The ‘price to pay for civilization’ is just another left-wing trope to justify confiscating income. Personal income taxes are a fairly recent phenomena. Plenty of ‘civilizations’ did just fine without this racket.

                      Get a clue lefty.

                    5. Sales taxes are income taxes taken another way. You focus specifically on income taxes because you’re doing buttwork for wealthy interests who have propagandized you. We need to take taxes in some way. You just don’t like the ones that affect the wealthy the most.

                    6. Yes, that’s what I’m doing wanting to keep my money. Income taxes were brought in during the war effort at the turn of the last century.

                      No one said no taxes. But it takes a special kind of useful idiot to ask for more income taxes.

                    7. Unfortunately my comment can only be repeated. What’s the difference between a sales tax and an income tax? Meaningfully speaking? They both take your money.

                      Oh, one is regressive and the other progressive. But you’re only against the progressive ones. For no possible logical reason except that you’re in favor of plutocracy.

                    8. One is also harder to game. Rent seeking and the political process is used to create all sorts of carve outs and cronyism that can give the rich and resourceful ways out of their tax burden. Though high tax rates as well increase the attractiveness of such rents.

                      Income taxes really hit the middle class the hardest because they are the ones drawing a pay check but are not crossing over into the super-rich-valley where the marginal cost of a few extra % is not a dealbreaker.

                      If the tax were based on consumption more broadly this would create different incentive structures (more responsible personal spending/long term saving/investing).

                      The looming problem would be if the federal gov could get enough tax income to fund the drunken sailor spending that they have engaged in since the income tax was introduced. There would have to be a readjustment in spending which is the biggest roadblock to any change from the leviathan in place now.

          2. Why no macropolitics, macrohistory, macroreligion, macroscience….EH?

            1. But there is.

              Macrohistory would be what used to be called a “survey course”. It packed a large time frame and huge geographic area into the tight space of a semester or two. In terms of broad brush understanding, it performs well. Sort of like Macroecon 202. The only problem with Macroecon is that they offer more than one class in the subject, when everything of value it can teach fits into a semester.

        2. It’s pretty telling that late in their careers both Keynes and Hayek set aside their lifelong feud to conclude:

          “LOL IDK. Economics is impossibly complex.”

          1. I could’ve told you that easily douchebags.

      2. I never made the claim that conservatives are libertarians. This has nothing to do with that divide, since it’s well known that Conservatives are for rather a lot of foreign intervention on various grounds, all it with it’s own underpinning rationale (even if I happen to disagree with most if not all of it).

        Conservatives are supposed to be better on economic principles, though, and better at intellectual consistency.

        They’re failing at that, in this regard, although conservatism has been in decline for quite some time to the point where they have probably a handful of even conservative-leaning members in Congress and the Senate. As in fewer than five in each. Which sort of begs the question of ‘was intellectual consistency and economic principles something that worked’, and of the course the answer to that is ‘no’ in recent memory.

        1. Conservatives have never been fanatics about free trade at all times under all conditions. They have up until recently been brighter than that. They only stopped being so because they were infected with morons who adopted Libertarian thinking whenever it suited them.

          1. Again, this is something I haven’t said.

            The biggest rationale to being against free trade that exists in the Conservative agenda is for ‘National Security Concerns’ which generally rest upon ‘does our military use X gizmo, if so build it ourselves’ although there’s an emerging idea that we also should not trade items with potential military use to foreign nations where they could conceivably be used against us (I.E. building next-gen phone/computer designs in China, for example.)

            But there is very scant support, generally speaking, in conservative circles for things like tariffs in general or more especially Trump’s particular brand of international trade (I.E. Fair Trade). It doesn’t exist, or at least barely existed pre-Trump.

            I don’t think you can really rest the blame for much of their idiocy on libertarians when it’s becoming pretty transparent that their thinking is more Progressive in origin. They are skewing away from both Conservatism and Libertarianism simultaneously.

            1. The rationel for protectionism is that we need an economy that produces things and we should not let other country’s act in a predatory manner to steal our industry.

              The truth is international trade hasn’t worked the way it was supposed to. The people who lost their jobs were supposed to get new lower paying jobs but still be better off thanks to all the cheap goods. That is not what happened. They didn’t get new jobs at anything close to decent wages. And the cheap goods haven’t made up for the stagnation in wages for most Americans. Free trade has benefited a small class of elites but hasn’t worked for many other people. It just hasn’t.

              I say that as a lifetime believer in free trade. But at some point, the truth that it wasn’t working as advertised became too obvious to deny anymore. We have to rethink how we are doing things. Every other country in the world engages in massive protectionism and all sorts of predatory practices. If those things are the road to ruin, why do those countries seem to be doing okay and have all these industries that used to be here?


                I already said this, and it’s considered under the ‘national security interests’ even while it becomes meaningless words at that level of expanded definition. It’s another point where I diverge from conservatives.

                And also, the whole ‘free trade’ mythos you’re citing isn’t what was actually implemented and we both know it. The libertarian refrain of managed trade isn’t free trade is ultimately true even while perfectly free trade likely is aspirational rather than practical.

                Ultimately, in terms of trade, what the United States has done is insulate ourselves from the laws of supply and demand and pretend that everyone can live a life of luxury on welfare while not lifting a finger. It’s a lie, but we perpetuate the lie through our labor policy, immigration, and heavy use of the stick-and-carrot that is the regulatory state.

                The bill will come due, we just don’t know exactly when.

            2. I would find Libertarians appeals to “Freedom” and Principles” if I could ever find a libertarian who ever paid a price for them or did anything but benefit from them. Sorry but if you only benefit from your principles being applied and your principles always end up supporting the policy position that benefits you, they are not principles. They are rationalizations. And that is what is going on with both Libertarians and conservatives on this issue.

        2. It’s fascinating how even a skeptic of conservatism like you can still be sold on “they’re better on economics and economic principles” when not in any of our lifetimes has that been true.

          1. If only conservatives could produce economic results like they do in socialist paradises like Venezuela. If only that idiot Reagan could have had 8 years of stagnant growth and the lowest number of Americans employed since before women entered the workforce the way Obama did. I mean nothing says “genius” like tens of millions of Americans dropping out of the work force because finding a job is hopeless.

            If only conservatives could be so intelligent to think that the solution to the high price of healthcare is to make everyone buy insurance. We had 8 years of a functional retard and economic illiterate as President. It is amazing how resilient this country is. Even people as dumb as Obama can’t kill it.

            1. You’re doing the Venezuela thing John. Also blaming Obama for the recession that started before he was in office. A bit poo-flinging kindergartner, even for you. Maybe it’s time to pack it in for the evening.

              1. Poor Obama. It is just bad luck that the economy never did anything for 8 years. That damn Bush. And how was he supposed to know forcing people to buy insurance and requiring the insurance to cover everything whether they needed it or not would make insurance expensive and make health care worse and more expensive for most of America?

                How are those Austrian classes going Tony? How about the 57 states? You know as well as I do Obama is dumb as a post. You just are too racist to hold a black man to any kind of standard and admit the truth.

                1. Damn, 57 states too? Now you’re just being a troll. Do you really want me to start listing the fucking ridiculously retarded things Trump said just yesterday, or would that make you flee from the thread like you always do when you’re definitively called out on your epic bullshit?

                  And the economy did better under Obama than it’s doing under Trump.

                  1. Tony, by what metric are you saying that the economy was better under Obama?

                    Every indicator that people usually use seems to think otherwise. Real GDP is up, unemployment is down, S&P 500 ip drastically, GDP growth basically flat. Just curious what metric you are using to support that claim.

                2. You would need to be pretty retarded to think that a brand new social safety net is a good idea in the middle of any recession. Especially when it’s generally acknowledged that it was one of the big mistakes of the New Deal.

                  It’s like everyone on the left thinks that suddenly one day Marx and Keynes idea’s will work.

                  Shocker, they never do.

                  More amusing are people who believe that nonsense, but then complain about the deficit. I don’t have words for that level of amazing, shiny idiocy.

                  1. What do you mean by “good idea”? It’s certainly a good idea for the people who would otherwise be sent into poverty or disease because of the recession (a macroeconomic reality they have no control over). Simple Keynes is countercyclical spending, and it’s certainly historically done better than the “always spending, all the time, but on useless crap” counterproposal adopted by Republicans.

                    1. Except that after the recession that debt just sort of lingers forever, no austerity is ever implemented, and those temporary programs have a better than average chance of becoming permanent fixtures even while they’re unsustainable in the mid-to-long term and economically destructive in the short term.

                      Why, what did you think Keynes would suggest?

                    2. What do you mean by economically destructive? Putting people into poverty? Oh no, permanent social welfare programs keep people out of poverty permanently, so that can’t be it. Adding to the debt? Well Keynesians advocating paying it down in the boom part of the cycle. Unfortunately Republicans exist and they never pay anything down.

          2. Maybe not in your lifetime, but I’ve long suspected that you’re just some kid with a thesaurus.

            The Democrat party is infested with economic illiterates, so it’s difficult to be worse than them even while I don’t think conservatives are anywhere close to good. My major points of disagreement with conservatives are their social policies and foreign policy, but frankly conservatism as a movement is basically dead and too fragmented to operate these days so I really don’t consider them a ‘threat’ in the same way I consider Progressives to be a threat.

            The star of Progressivism is on the rise, and the body count usually follows the same trend.

            1. Every Democratic pol in the country is convinced raising the minimum wage will not effect employment.

              1. So have you guys abandoned “tax cuts pay for themselves” because of the evidence? If so, bully for you and evidence. Now why do you keep spending trillions of dollars on tax cuts?

                1. What does it even mean for a ‘tax cut to pay for itself’ one might ask, but I know the answer.

                  You beg the question by rigging the statement up as an assumption that there’s some knowable baseline value for what the government must spend, which is a fallacy. Even if it was not a fallacy, no one knows what that amount is and no one ever mentioned the spending side because of the very fact it’s sacrosanct by both the left and the right.

                  With that sort of mentality, anything less than total government takeover of the economy is simply irresponsible. Ludicrous.

                  1. One might come up with an estimate of government spending/GDP that is some optimum, depending on how much in the way of a welfare and military state you want, but the very fixation on “size of government” is a distraction. We’ll make it as big as we need it to be to accomplish our goals. Sometimes that’s winning a war (need big government for that), sometimes it’s providing healthcare to the masses because the market won’t do it and won’t do it as cheaply. Or maybe we want the Wild West and very little government, for some reason. The very conversation is stupid in my opinion. It’s an invented problem to get people to vote against their own interests.

                    1. The market can provide healthcare more cheaply but the market has little to do with the health care system now. To blame ‘the market’ for the kerfuffle that is the current healthcare system is baffling.

                      How can any market function when you have no idea what something will cost until months after you purchase it? How can a market function when insurance products are forced to include coverage for things that the customer never asked for? How can we appropriately price health services when boards have monopoly power to restrict the supply of doctors or localities give incumbent interests veto power over capital investments of their competitors, or the ability to exclude them entirely?

                      Why address an issue created by government regulation with MORE regulation?

              2. Better than Republicans wanting to pay wages that below poverty level and then bitch about all the people on welfare.

                1. So get more employable and stop crying.

          3. The only real demonstration I’ve seen in my lifetime is the Clinton years when he and the conservative congress cut spending, but I think you’ve said before that it was because of a cultural drive to cut spending that is no longer present. I’ve been told all my life that economic literacy is restricted to the right, but I started paying attention to politics during Baby Bush and the insane military expansion. It seems to me that the Conservatives just want to spend the money on different things. And also cut taxes, which I support, except when they concurrently raise spending.

            I suspect BYODB has heard a lot of the same things about conservatism, which is distinct from the modern Conservative as evidenced by their utter lack of drive to actually conserve.

            Which, TBF, we idiots continue to elect them, so why wouldn’t they keep being fiscally insane? On a local ballot a few years ago we had two referenda:
            1. “Should we build a new school?” – 80% said, “yes.”
            2. “Should we implement a 1% meals tax to pay for it?” – 80% said, “no.”

            A 1% tax. On a luxury activity. So, we borrowed the money, because we genuinely needed that school.


              If you want to hear the Conservative opinion, look no further than Mark Levin. I use him to set my Conservative clock on what’s going on with them.

        3. Historically, conservatives have been non-interventionist. It wasn’t until the neo-cons abandoned the dems and joined the republicans that “conservatives” became interventionist. Until the 1980’s, almost every foreign adventure was started by progressives.

      3. Trade protectionism was a universal American principle for most of it’s history. It wasn’t just conservatives.

    2. So we’re supposed to continue trading freely with a country that is using the income from that trade to build weapons of war for use against us, is stealing our intellectual property hand over fist.

      Yeah, yeah, I know what Bastiat wrote. He wrote it when rail transport was in its infancy; decades before the telegraph, telephone, heavier than air flight, and radio, and over a century before computers and nuclear weapons. Bastiat could not have imagined a totalitarian dictatorship like the PRC. That’s why he could dismiss concerns about trading with enemies by glibly asserting that they wouldn’t be enemies so long as trade was occurring. But the PRC does not want to integrate into the world trade system, and does not care about its people’s benefit; they want to coercively dominate their region and, if possible, the world.

  10. “This is a growth action. I can’t emphasize that enough.”

    “I just had a growth removed from my head.”

    “How awful!”

    “Not really. Got a haircut.”

  11. Didn’t you fucktards go see Hamilton?

    This is why we can’t do the Articles of Confederation, people: you’re not a real country until you’re waging trade wars.

  12. Ya know, I almost feel sorry for the economically illiterati who run this damned trade war. I mean …. if the Chinese government is screwing over the Chinese people by taxing them for our products that they want to buy, yes, it does hurt our exporters too, and it seems so natural, so intuitive, that the only way to fix that is by retaliating in kind … but it’s been known to be wrong for so long that there is no excuse for misunderstanding it. And it only takes a few minutes to explain how tariffs are really a tax on the consumers, not the producers, so taxing our people to retaliate against China taxing their people is about as logical as the Blazing Saddles sheriff threatening to kill himself.

    1. And yet, no one has successfully explained this to President Trump, or the Republican voters that made him the nominee and then the president.

      Alternatively, folks have successfully explained this to the President, and he’s okay lying his ass off about it anyway because he’s more concerned with the optics of being a tough guy then he is with being a good custodian and leader.

      1. I think it’s just pure adrenalin fight-or-flight response. Trump notices China has tariffs on American cars, thinks that’s not fair, tells them to knock it off, they flip him the bird, he thinks I know how to get their attention, raises US tariffs on Chinese imports, they think that’s not fair, and it’s on.

        Like if someone picks on your little brother, it doesn’t matter that your little brother was mean to their sister, and that was because her brother didn’t pick your brother for the sandlot baseball team. Your gut instinct says it’s not fair, and the rumble is on.

  13. That blonde is giving me a growth action in my pants, if you know what I mean.

    1. “blonde”

  14. You know what other media organization supported the president?

    1. The Kremlin cyberwarfare unit that employed Internet memes to flip just enough Hillary voters (or convince them to stay home) in swing states to throw the EC to Drumpf?

      1. Almost makes you wonder what it is about Hillary voters that made them so vulnerable and easily swayed by false information.

  15. Two points:

    1) Trump’s actions here are indefensible.

    Even if he were doing this ahead of a negotiation centered on China’s help with North Korea, he should have had this worked out with his Chinese counterparts first.

    This is a shit show train wreck in slow motion.

    2) Stock market does not equal Main Street, but that being said . . .

    BA closed down 2%.

    Nvidia was down 1%.

    Plenty of U.S. companies can remain profitable even if the American consumer is faced with inflation and unemployment kicks upwards from here.

    All Trump really cares about is getting reelected and what happens in the midterms. Incidentally, watching an ostensibly Republican president adopt all the worst aspects of the Democrats’ trade message for the past 20 years isn’t just a failure of the GOP. Wouldn’t it be great if the Democrats were willing to go to bat for trade with China in an election year?

    But there’s zero chance of them doing that, right? They invented the rhetoric and logic Trump is using–why not go after them for that? What does Nancy Pelosi have to say about trade with China? When will she stick her neck out for free trade?

    1. This is from November, but still . . .

      “House Democratic Leader Nancy Pelosi condemns President Trump’s comments blaming the trade defciit wiith [sic.] China on past U.S. administrations instead of the Chinese, saying his reversal from the campaign would have appalling reverberations.”


      She was bashing China before bashing China was cool.

      Honestly, Trump is all the things average people like about the Democrats–minus the social justice warrior bullshit.

      We’ve seen the Democrats drop DACA for fear of alienating swing voters, so it’s not like they’re differentiating themselves from Trump on immigration (or free trade) either.

      What would make average swing voters want to vote for Democrats rather than Trump at this point? It’s not like average swing voters are militant LGBTQI+ activists, feminists, BLM, illegal alien interests, radical environmentalists, or antifa.

      Trump has robbed the Democrats of everything that sells and left them with all the dead weight and fruit sushi. He’s more likely to win reelection than he was to win the first time, that’s for sure.

      Too bad about the free trade. And just when I thought the science on free trade was settled.

    2. Who backs tariffs?

      But the support of key Democrats ? including Sen. Elizabeth Warren, D.-Mass. ? for Trump’s “America first” approach to trade stands to complicate any GOP effort to tie the president’s hands.

      The awkward political divisions over trade matters were on display Sunday as Warren backed Trump’s policy while Republican senators rebuked the president from their own party. “When President Trump says he’s putting tariffs on the table, I think tariffs are one part of reworking our trade policy overall,” Warren said on CNN’s “State of the Union.”

      1. Many much fun times.

        For Democrats, responding to President Trump’s aggressive trade actions hasn’t been easy.

        Senators seen as possible presidential candidates in 2020 have repeatedly called for tougher actions on trade from the executive branch, with some saying President Obama didn’t do enough.

    3. It hurts the PRC more than it hurts us. And they need to be hurt.

      1. I’m not into hurting myself–even if not hurting myself doesn’t hurt people I don’t like.

        1. “Tell that to a mommy panda protectin’ her cubs.”

  16. My inner optimist says that Trump and China are engaged in mutual economic warfare to position themselves for a good trade treaty which will benefit both parties…

    I think my inner optimist visits Colorado too often, if you know what I mean…

    1. Yeah, that’s what I’m hoping, too.

      When we see this stuff spill out into the open, however, it’s a pretty good indication that if there were behind the scenes negotiations, they’ve stalled or fallen apart.

      When we see Xi knock all the pieces off the 3-D chess board and stomp off in a huff, it’s a pretty good indication that at least he’s not getting what he wants.

      I don’t think they’re used to people making demands of them. When’s the last time anybody stood up to China?

      1. They have chess pieces in their back pockets unfortunately. They probably own half of Congress and a good amount of the deep state; the whole world knows that our politicians and bureaucrats come cheap. That’s the model from their taming of Australia.

        Their strategy at this point is to assume Trump is an anomaly and they just have to wait a little bit to get things back to normal.

    1. If the Yellowstone super volcano erupts, emergency workers would have to be brought in from east of the Mississippi. Everyone in the western part of the continent will be dead.

      1. Whatever.

      2. Wow, better watch The Road again to pick up some tips. I always assumed that the family at the end was going to eat the orphaned kid.

      3. With the prevailing winds, the east of the continent will be inundated with ash.

  17. “Conservatives used to know damn well that trade deficits don’t matter, budget deficits do”

    when you are issuing debt denominated in other IOUs you can print at will, budget deficits do not matter either

    libertarian types seem to have trouble with this basic idea, and so krugmanoids laugh at them

    1. “when you are issuing debt denominated in other IOUs you can print at will, budget deficits do not matter either”
      Which is complete bullshit.
      Dumbshit lefties seem to have trouble with this basic fact, and so libertarian types laugh at them.

      1. your economics is faulty

        with debt issued that is payable in a fiat currency, the debt is monetized, paid via the inflation tax

        when the fiat currency is also the reserve currency for most of the world, then the inflation tax is spread across users of all linked currencies (check the stats on official foreign holding of US debt).

        In other words, deficits are merely an accounting term that stands for taxes paid indirectly and not through the standard channels of confiscation.

        Statist krugmanoids understand this, but don’t play it up, yet still taunt libertarian types with, “where’s the inflation?” and “where is the rise in interest rates on T-bills?” and other blather.

        1. Pretty much. They pull a similar trick with trade deficits. They just call the loans foreign investment and pretend we are not borrowing money to finance them.

          1. There are two interesting things going on: the innocuous, played up by the Wall Street Journal et al., is when foreign private interests demand dollars in order to invest in productive assets for which the former owners of those assets want dollars (say, US apartment buildings or farmland); and the hidden and more insidious is when foreign states buy dollars, inflating their own currencies, and buy US treasuries in the same manner in which the Feb “expands its balance sheet,” in effect making their citizens pay tribute to the US hegemon.

            1. The first is not innocuous in the least. The returns on those “investments” are sent out of the US rather than being kept here. It is identical to the country borrowing and paying interest. In Vancouver, nearly all the real estate is owned by Chicomms, and Canadians are paying rent to the PRC to live in their own country! Likewise in many US cities on the west coast. There is a cost, however much Reason cosmotarians would like to pretend there isn’t.

              1. In what way are the returns of those investments “sent out” of the US? If dollars are sent out, they are no good until they buy something. Other US assets or US goods.

                1. Just like gold is no good until it is used to buy something from a gold mine?

                  No offense but I hear this absurd claim from economists all the time. It seems to be something taught as dogma and never thought through. Dollars are used as de facto currency in other parts of the world — they don’t have to come back to have value.

                  When I’m buying something from China with dollars, I’m competing not just with other Americans offering dollars but also Chinese offering dollars that had previously been sent to China. Thus because of the previous spending of dollars in China, I am forced to spend more dollars than I otherwise would have.

        2. A plugged toilet lifts all turds.

        3. Your economics is faulty:
          “your economics is faulty
          […]paid via the inflation tax”

          So budget deficits DO matter; imagine my surprise that dumbshit lefties seem to have trouble with this basic fact.

          1. Budget deficits plus taxes matter as much as total government spending – the deficit panic is boob bait. There is nothing magical about a deficit. Since Nixon finally killed the gold standard, smart economists have always known this. The “government deficit” and the “XX trillion dollar dollar debt – OMG!” are just superficial accounting scandals. Milton Friedman frequently signaled this, although he never exposed the entire scam (which is an interesting question by itself why he did not, but that’s another story). Watch Milton:



            1. wef|4.4.18 @ 9:53PM|#

              Dipshit, you show up here now and then to promote your bullshit.
              Fuck off.

    2. They sure matter when the IOUs come due. For now we’ve been able to just pay off the IOUs with a slightly larger number of new IOUs, but that won’t last forever.

      1. Seems self evident, which is why krugmanoids don’t get it.

      2. “…but that won’t last forever.”

        It’ll last as long as the public tolerates the ‘inflation tax’.

        1. Sure, but the inflation necessary to monetize the entire debt would be far more severe than anything we’ve seen since the 1700s. We’re talking 15 months of GDP (without addressing SS/Medicare).

      3. Yes, IOUs come due constantly and are replaced with more. And it will go on until no one wants to accept dollars, and then the US will default officially, instead of the continuous, low-grade, effective default which has been going on since the 1930s. But when it ends, that’s that. The last fools owning dollars will be screwed, but most of the inflation tax will have been paid already – and in fact is being paid right now. Big investors understand this. Foreign central banks also. Yet they still participate in the system, because the US has been careful to maintain a commitment to avoid Zimbabwe or Venezuelan corruption. There was, however, a slight panic about ten years ago.

        1. The last fools owning dollars will be screwed

          I don’t disagree but you seem to be downplaying the significance of such an event. An enormous amount of Americans’ wealth is locked in dollar-denominated assets. There would be a domino effect on stocks and real estate too. Defaulting on debt to foreigners is also a casus belli, and we’d be left without allies. I know the old saw about boiling a frog by raising the heat slowly, but that kind of event is the temperature change equivalent of a volcano erupting below the pot.

          1. If the US central bank is good at something since the 1980s, it’s slowly simmering frogs, and not only the French

            1. It’s worked for 30 years so it will work forever? Is that your claim?

          2. Yes, there would be a huge panic and people would freak. The stock market would crash. A depression would be ushered in.

            1. Cats and dogs, dying together.

              1. I don’t think you understand that you’ve been called on bullshit yet again.

                1. Not you, Chipper; our newest econ-ignoramus EOA.
                  Damned threaded comments!

            2. “Chipper Morning Baculum|4.4.18 @ 10:45PM|#


              See? This is literally the limit of your ability to discuss the issue, superficial insights gained by listening to people smarter and more informed than you are, that you then regurgitate as though you understand them.

              1. Mary Stack|4.5.18 @ 1:03AM|#
                ‘Bullshit, bullshit, bullshit, bullshit…’
                I doubt this is Mary, just some random troll posting bullshit, bullshit bullshit.
                Right, bullshitter?

  18. Look, I support free markets, but….
    Look, I support free speech, but….
    Look, I support the 2nd Amendment, but….
    Look, I support spending cuts, but….
    Look, I’m not a racist, but….

    1. Good luck with those free markets, free speech, and amendments when Xi rules the western Pacific and has bases in California.

      1. “Good luck with those free markets, free speech, and amendments when Xi rules the western Pacific and has bases in California.”
        Is Xi the boogy-man under your bed?
        Are you young enough not to recognize the same ‘yellow-scare’ regarding the Japanese, or stupid enough not to recognize the fallacy?
        You have shown yourself to be a bit of a dimwit; keep it up, and you’ll get to be a no-wit. You and John made asses of yourselves this morning; do you really want to keep it up?

        1. There’s a difference between a country that has nearly zero natural resources, no sketchy international political/military ambitions, and a vastly smaller population (Japan in the 80s) versus the most populace country on earth, with one of the largest land masses on earth, and clear political/military ambitions.

          People who worried about Japan overtaking us as the most powerful country on earth were idiots. They didn’t have the “raw materials” to do it… China does. Every economist in the world believes that China will be the biggest economy in the world in the nearish future, and for good reason. All indicators show this to be a very reasonable outcome. Toss in the fact that they’re playing power politics, and that COULD become a sketchy thing.

          Contrast that with saaay India, which will probably end up being the 2nd/3rd largest economy on earth. They’ll be an economic powerhouse, but there’s really not a lot to worry about there because they’re pro western and pretty chill. China is not. Anybody who doesn’t worry at least a little bit about China being the largest economy on earth is a short sighted fool. It will likely end up like USSR Mark II in 30 years where it’ll be the western powers wrangling with China on global affairs. Hopefully it’s less violent (fewer bloody proxy wars), but even just the non violent stuff will be a pain in the ass. It WILL happen, the only question is how militant/aggressive China will be.

  19. Conservatives used to know damn well that trade deficits don’t matter, budget deficits do

    Wha? But they both have ‘deficit’ in the name. That makes them the same.

  20. While a lot of people regularly say, “that’s the dumbest thing Trump has ever said,” I concluded that that tweet really is the dumbest thing Trump has ever said. This moron really seems to think that Americans are “down” a hundred billion dollars when they buy that much in goods from China. Like they’ve lost that money. Jesus Christ. Just consider that: the president of the United States has the economic intelligence of some rando internet commenter.

    1. Let’s say my income is $50,000 in a particular year. And I spend $60,000 in the same year. Am I not down $10,000 at the end of the year? Is this some kind of new cosmotarian math?

      1. OMG, I can’t even figure out how to begin tackling the layers of stupid that statement is wrapped in. A trade deficit is not the same thing as a spending deficit. Let’s start with that. Do you understand that?

        1. “OMG, I can’t even figure out how to begin tackling”

          That’s no surprise, you’re an imbecile, and you’re obviously out of your depth and incapable of explaining it, so you’re hoping someone smarter than you will come along and explain it.

          What’s really sad is how completely obvious it is to everyone and you’re too fucking stupid to realize we can all see right through you.

          1. Mary, fuck off.

      2. So, in this analogy, is America’s “income” less than $100 billion a year? Or is it that Americans trade all their national product + $100bn?

      3. There is no such thing as a deficit in a trade. There are no losers, provided the trade is voluntary.

        When dollars are traded for goods and services, dollars go out and goods and services come in. One trader values the dollars more than the goods. The other trader values the goods more than the dollars.

        The goods have a higher value to the purchaser than the money spent on them (if this was not the case, the trade would never be made). These goods (aluminum as an example) are then transformed into products that have an even higher value than the aluminum did. For example, $1000 worth of aluminum is transformed into an airplane wing that someone is willing to pay $20,000 for. Something now exists that didn’t before. Wealth is created. And the Chinese will pay United for airplane rides.

        The notion that someone loses in a voluntary trade is absurd.

        The term trade deficit means more goods come into a country than go out. Which is completely irrelevant as they were exchanged for an equal amount of currency. It is a meaningless term. Value is exchanged for value.

        What Trump is alleging, is the Chinese are subsidizing aluminum to the point that it’s driving our manufacturers out of business. As if it matters, in a global economy, where the aluminum is manufactured. The absurdity is that the US does the exact same thing for US grain. Odd that the Chinese placed their tariffs on our farm products, no?


        Uh, let’s just say you have no concept of the issues at hand.
        The hot-dog stand is over there; go talk with them.

      5. In reality it’s more like this:

        You have a 500K dollar net worth. Say you inherited a house worth 500K. You make 50K a year, and spend 60K.

        Every year you borrow 10K out of the equity in your house to cover the difference. This is fine if you do it once in awhile… But if you were to do it forever, you eventually run out of equity to borrow against, or perhaps the “bank” decides they don’t want to loan you more money even if you still have 100K in equity because they don’t believe you can make the debt service anymore.

        That’s what will happen to us. We’ll either end up selling off all our assets to the Chinese to pay for current consumption, OR they will simply stop taking our dollars because they don’t trust us to not inflate them to nothing or whatever.

        Our trade deficit exists because Americans as a group are collectively selling off assets we all own so we can consume in excess of our own productivity. You can do this for awhile, but not forever, unless you want to inflate the currency away.

  21. Can some clever writer for Reason please find a way to sneak on to Fox & Friends in the morning and use it as a platform to pitch some idea? If possible couch it in a manner that strokes Trump’s ego. Something like:

    “You know, pot legalization would be an incredible boon to the US economy. Previous presidents couldn’t get it done, but President Trump might be able to do what no other president could accomplish. Plus it is totally Made in America!”

    1. Napolitano, name your price!

  22. It seems pretty obvious by now that the GOP is going to get trounced in November, but I’m beginning to wonder if that particular contingent of the DC establishment still isn’t in denial about the extent to which they will get murdered. Trump may have a loyal following among mouth breathing idiots, but I think all of it will come at the cost of the loyalty of traditional American allies and the so-called “loyal opposition” at home. If Democrats take over while Trump gets us deeper into an unwinnable trade war, the next thing that will happen is the economy will go into recession and the federal government will suddenly have the makings of a fiscal crisis. Then you have the idiot Trump either kowtow to the reinvigorated Democrats or double down against them. None of this looks very good for the federal government and its place in the world. Parts of this country are very robust, but I’m beginning to wonder about whether our omnipotent federal government and empire is.

    1. Sanjuro Tsubaki|4.5.18 @ 12:24AM|#
      “It seems pretty obvious by now that the GOP is going to get trounced in November,”
      I had the hag at some sort of big electoral college number defeating Trump.
      And then I remember checking the numbers, assuming there was some (unrepresentative) reporting artifact.
      Oops! Trump won!
      So while Trump has made an ass of himself regarding trade, I’m not convinced he’s handed the mid-terms to the Ds.

    2. The problem I see is that the GOP bigwigs will interpret the result as being Trump’s fault but not factor in Congress’s fecklessness over the past year.

  23. An unfortunate amount of partisan politics turns out to be “my side right or wrong”. A careful analysis will often show that when it is “right”, the leaders of the party make economic gains, and when it is “wrong” people who are not the party’s leaders encounter economic difficulties.

    If you can get what you want by stroking Mr. Trump’s delicate ego… and you can plainly see the cases where it has been for specific individuals… the observed behavior of continuing to do so is not all that unexpected. What is sad is the number of people who support Mr. Trump as he actively works against their interests.



  25. The US went from a poor backwater hinterland to a world superpower under explicitly trade protectionist policies and beliefs.

    When we ship abroad dollars, we ship abroad our sovereignty. When they ship back that money as “investment”, we ship back control of US resources, companies, and lives. Do you want to live in a company town owned by the president for life of China?

    And when we put our neighbors out of work so we can save a nickel on our car purchases, it’s simply a failure of accounting to see that as a net win for us.

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