Dishonest Crank Now Heads Trump's OMB

Trump has saddled America with another charlatan in an important post.

Economist Tara Jirari raises the alarm over the new Chief Economist at the Office of Management and Budget because he once headed the Coalition for a Prosperous America (CPA), which not only supports tariffs, but notably used dishonest arguments to do so.

Jirari supports her charge by citing an analysis by Joseph Francois of the World Trade Institute and Robert Koopman of American University.

They note among other things that the CPA's claims "rest on assumptions that that run against established empirical evidence, contradicting hundreds of papers and decades of economic analysis on the effects of tariffs," and make more detailed commentary on some of these assumptions, including:

The next key assumption that tariffs will raise U.S. productivity growth finds absolutely no support in the economic literature. Tariffs tend to reduce productivity growth as firms face less competition and therefore less incentive to innovate and reduce costs, resulting in more scarce resources flowing to less competitive firms and sectors and away from more competitive and innovative firms and sectors, and reduce scale economies as firms now operate in a smaller, domestic market rather than a larger global market. Indeed, this assumption implies that the Smoot-Hawley tariffs should have brought the U.S. out of the Great Depression. In their underlying model, a full-blown trade war is good for everyone.

The analysis thoroughly eviscerates the CPA analysis and concludes that "this study is not only misguided, but also intentionally misleading and would not find support in a serious economics journal."

I cannot top economist Jessica Riedl's analogy, so I'll repeat it here: "This is like hiring a NASA administrator who believes the Earth is flat, an Attorney General with no legal training ... or an HHS secretary who is an anti-vaxxer (oh wait)."

-- CAV