1,100 Economists to Trump: Protectionism Triggered Great Depression

Bloomberg  ( Original )
MAY 2, 2018

Does it matter more to Trump if his policies will trigger a recession (let alone a depression) or if he will appear to win in the short term?

1,000 daily headline battles can be won while losing a single economic war. Tariffs are a show of strength, not strength. Flexing to distract from internal weakness is par for the administration game plan, and there’s no reason to think 1,100 economists will change this paradigm.

To some of the biggest voices in U.S. economics, it could be 1930 all over again.

More than 1,100 economists, including Nobel laureates and former presidential advisers, have signed a letter warning Donald Trump about his tariff-heavy approach to trade. Many of its passages quote directly from another letter sent in 1930, cautioning against protectionist measures the U.S. imposed at the start of what became the Great Depression.

“Congress did not take economists’ advice in 1930, and Americans across the country paid the price,” the economists say in the letter, due for release Thursday. “Much has changed since 1930 -- for example, trade is now significantly more important to our economy -- but the fundamental economic principles as explained at the time have not.”

The letter, organized by the Washington-based National Taxpayers Union, comes as the Trump administration travels to China this week for talks aimed at averting a trade war and weighs whether to permanently exempt allies from steel and aluminum tariffs. Those disputes are clouding the outlook for the U.S. economy, which is now in its second-longest expansion on record.

“Economists are pretty united in their opposition to protectionist trade policy,” Bryan Riley, director of the NTU’s free-trade initiative, said in an interview. “It’s the economic equivalent of flat-earth trade policy.”

ORIGINAL SOURCE: Economists Invoke Great Depression in Warning to Trump on Trade by Josh Wingrove at Bloomberg on 5/2/18