David R. Henderson  

Two Good Economists' Letters

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Greg Mankiw writes:

Some sign a letter opposing tariffs. Others sign a letter supporting President Trump. You can guess which one I signed.

Like Greg, I signed the first one and not the second one.

However, had I been asked to sign the second--I wasn't--the only reason I would have refused is that it's billed as "Economists for Trump." I almost never sign a letter where the signers are taking a position in favor of a politician rather than in favor of some of a politician's policies and positions. But the author(s) of the Trump cleverly came out in favor of Trump's good policies while expressing their hope that certain things would or wouldn't happen.

Here's the key section expressing hope:

We believe that reciprocal free trade with lower trade barriers on all sides produces higher overall economic growth and hope that the President's efforts to negotiate better trade deals, including willingness to re-enter the Trans Pacific Partnership (TPP), will bring about a stronger long-run free trade equilibrium by reducing trade barriers and opening markets that were previously closed to American businesses.

We hope that Chinese President Xi's stated willingness to reduce China's 25% auto tariff will be honored and is an early sign that President Trump's negotiations to promote trade are working.


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COMMENTS (5 to date)
Alan Goldhammer writes:

The irony is that President Trump won't even back up his own Commerce Department that sanctioned Chinese telecom ATE for shipping stuff to Iran in violation of a US embargo. He came out today and says he wants to remove the sanctions. One wonders if any USG sanctions will be upheld by this President. Maybe this is his view of 'free' trade.

Bruno Duarte writes:

Reciprocity is on some economists' minds ().

But it may be also a recast of the post WWII order ()

Liam McDonald writes:

I'm not a fan of Trump for tariffs. Does he not have any economic advisers who can explain that the US getting cheap goods from China is a good thing?

Any plans to go back to being an Economic Adviser like the Reagan years, David?

David R Henderson writes:

@Liam McDonald,
I'm not a fan of Trump for tariffs. Does he not have any economic advisers who can explain that the US getting cheap goods from China is a good thing?
He does have at least one: his new guy, Larry Kudlow. But, as John Fund said a day or two after Trump was elected, "you can lead Donald Trump to policy, but you can't make him think."
Any plans to go back to being an Economic Adviser like the Reagan years, David?
Zero.

Thaomas writes:

It would have been interesting to know if these economists supported the tax bill notwithstanding its not making up the revenue lost from lower corporate receipts with higher taxes on individual incomes or because of the upward income redistribution of income.

They are also a bit ambiguous about whether the policies are good (structurally/long run) in themselves or only because they increase (short rumn "confidence."

Also it wold be interesting to know which regulatory changes they had in mind as improving allocative efficiency; the ones that have made headlines do not.

And of course everyone "hopes" that Trump will rejoin the TPP.

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