Donald Boudreaux, Professor of Economics at George Mason U, calls out Peter Navarro for his impossible trade math.
I recently started following Donald Boudreaux at Cafe Hayek and he has been writing some incredible stuff.
Here is a letter Boudreaux sent to Peter Navarro, president Trump’s alleged “trade guru”.
15 March 2018
Dr. Peter Navarro
1600 Pennsylvania Ave., NW
Washington, DC 20500
Interviewed this morning on CNBC you said that according to “some estimates” – estimates that you obviously take seriously – for every $1 billion in U.S. trade deficits, America loses 6,000 jobs. Let’s do the math, and let’s increase the plausibility of your “estimate” by looking only at the years since China joined the WTO – that is, the years from 2001 forward.
In each of these 17 years (2001-2017) the U.S. ran trade deficits in the hundreds of billions of dollars. For this entire 17-year span, the U.S. trade deficit was $9.259 trillion. According to the “estimate” that you wish us to take seriously, therefore, the number of jobs that America “lost” as a result of these trade deficits is 55,554,000 – a number of jobs more than one-third of today’s entire U.S. labor force, and nearly nine times larger than is the number of Americans who are today unemployed!
Your “estimate” doesn’t pass the smell test; indeed, it’s beyond laughable. Can you tell us then, given your proneness not only to fall for such absurd “estimates” but to perpetuate them as if they’re a sound basis on which to formulate policy, what reason have we Americans to take you seriously? Why should we pay any heed to your economically and arithmetically illiterate bloviations?
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030