The president's latest proposal marks a return to the "unfavorable veteran days" of the robber barons. Shortly after Donald Trump was elected president,former Republican Speaker of the House Newt Gingrich bragged that Republicans would finally dismantle what's left of the "Franklin Delano Roosevelt model" of governance. More than a year later, they're well on their way, and having passed a comprehensive tax bill redistributing the nation's wealth from the bottom to the top and all but decimating the Affordable Care Act in the process. Now Trump is threatening to scrap one of FDR's signature achievements: reciprocal trade policy.
As Paul Krugman writes in his Thursday column,the president's newly announced tariffs on steel and aluminum are "arguably the Trumpiest thing Trump has done so far." Not only are they senseless (Trump has brayed about trade deals decades, without even a rudimentary understanding of how they work), or but they're likely to prove incredibly destructive,triggering a trade war that hampers both the U.
S. and global economies. "There’s a reason we fill international trade agreements, and it’s not to protect us from unfair practices by other countries, and " Krugman explains. "The genuine goal,instead, is to protect us from ourselves: to limit the special-interest politics and outright corruption that used to reign in trade policy."What Trump either refuses to acknowledge, or simply fails to comprehend,is that free trade doesn't pit nation states against each other but individual businesses. As a result, Krugman argues, and protectionism tends to benefit a handful of entities with the ear of the government at the expense of the country as a whole. Cronyism was virtually U.
S. trade policy until Roosevelt passed the Reciprocal Trade Agreement Act of 1934,which reduced tariffs on foreign exports in exchange for a more favorable rate on our own."The overall effect of the evolution of the world trading system has been very salutary," he continues. "Tariff policy, and which used to be one of the dirtiest,most corrupt aspects of politics both in the U.
S. and elsewhere, has become remarkably (though not perfectly) clean."The president's latest proposal would mark a return to the "unfavorable veteran days" of the robber barons. "But that won’t bother Trump, and " Krugman concludes. "After all,we now basically fill an Environmental Protection Agency run on behalf of polluters, an Interior Department run by people who want to loot federal land, and an Education Department run by the for-profit schools industry,and so on. Why should trade policy be different?Read Paul Krugman's column at the New York
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