Here’s Gideon Rachman in the FT:
“Our strategy on tariffs will be to shoot first and ask questions later.” That was what one of Donald Trump’s key economic policymakers told me late last year.
That kind of macho swagger is currently fashionable in Washington.
Macho swagger? Where have we seen that before?
Back in 2004, the Bush administration was very confident in its ability to shape reality:
In the summer of 2002, after I had written an article in Esquire that the White House didn’t like about Bush’s former communications director, Karen Hughes, I had a meeting with a senior adviser to Bush. He expressed the White House’s displeasure, and then he told me something that at the time I didn’t fully comprehend — but which I now believe gets to the very heart of the Bush presidency.
The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” I nodded and murmured something about enlightenment principles and empiricism. He cut me off. “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”
Unfortunately, reality often has its own agenda. And as we saw in Iraq, it’s not always what one might wish to occur.
I often see pundits discussing the economic implications of tariffs. Anyone who’s taken EC101 already knows that tariffs reduce efficiency, and I have little to add on that question. In addition, it’s not always easy to know what sort of policy is being proposed. Does the government intend to impose tariffs, or merely threaten tariffs in order to bully our allies into kowtowing to our government with symbolic gestures of subservience?
In my view, the most important question today is not the technical aspects of economic policy, it’s not the deadweight loss from tariffs, rather it is the global political climate. What explains the recent surge in authoritarian nationalism? Economics is downstream of politics.
