Trump trade adviser Peter Navarro says Dr. Fauci has been “wrong about everything.” This is what economists think about Navarro (“a charlatan”)

by Bob Schwartz

I don’t know how Peter Navarro got his PhD at Harvard.
Daniel J. Ikenson, Cato Institute

This interpretation does not explain Mr Navarro’s oddest views, like his opinion of the trade deficit. After China joined the World Trade Organisation in 2001, the trade deficit exploded at the same time as millions of manufacturing jobs vanished. Mr Navarro claims that, as a matter of arithmetic, unbalanced trade is responsible for a slowdown in growth since 2000. Mr Trump spouts similar lines, talking about the trade deficit as if it were simply lost American wealth.

This is dodgy economics. A deconstruction of spending in the economy shows exports as a positive and imports as a negative. But the same accounting exercise also shows government spending as a component of GDP. Few economists—and certainly few Republicans—would say that the bigger the government, the richer the economy in the long-term. The equation shows how resources are used, not produced.

The Economist

The economic illiteracy that animates Navarro’s policy prescriptions is startling. In a white paper published before the election describing some of candidate Trump’s economic policies, Navarro (and co‐​author, Wilbur Ross, Commerce Secretary‐​designate) revealed the central misconception that lies at the core of his global economic worldview….

He says imports deduct from output, and he calls that accounting identity the ‘economic growth formula’. He thinks that for every dollar we import, our GDP is reduced by a dollar. I don’t know how he got his PhD at Harvard.

Daniel J. Ikenson, Cato Institute

Tyler Cowen, an economics professor at George Mason University, said Mr. Navarro’s broad protectionist ideas — like Mr. Trump, he urges slapping huge tariffs on Chinese goods to reduce the trade deficit — are out of step with generally accepted economic theories. “There are plenty of economists who defend some form of protectionism,” said Mr. Cowen, to help a growing economy or to bolster selective industries. But “close to no one,” he said, agrees with Mr. Navarro’s idea that a trade deficit is bad on its face.