The president is right to take credit for a booming economy. The stock market is way up in the last year.
Unemployment is way down, and most of us are getting more money in our paychecks. But … the president has it all wrong on tariffs, and I hope he doesn't give into his isolationist desires by slapping taxes on steel and aluminum, which will inevitably start a harmful trade war.
When the president satisfies his deregulatory jollies, not only do we all get a thrill up our leg, the economy grows and people win with more money, jobs and mobility.
When he indulges his protectionist, petty urges to reconcile trade deficits by economic force, he may be bailing out the steel industry in the short term. But in the long run, he's hurting millions of workers by putting jobs at risk in industries and sectors that will be deeply, irreparably damaged by retaliatory counter-tariffs that hurt steel-based exports.
We are already on an inflationary high wire, and a trade war will only push us into the abyss of higher prices, stagnation and recession.
Economic isolation never works, and you can look no further than the Great Depression and the Smoot-Hawley Tariff Act, which not only undid the economic gains from Calvin Coolidge's cost-cutting and tax cuts, but also launched us into the kind of financial turmoil that would be compressed and compounded in this modern era.
Hopefully, the rational economists who surround the president will bend his ear and do so in the right direction so Mr. Trump doesn't throw the brakes on the economy he is so proud to have nurtured.
What goes up can keep going up, but if he adds to the gravity with tariffs and a trade war, the fall back to earth will be fast and hard and hardly great.