Will Malignant Stupidity Kill the World Economy?

Paul Krugman: “The tariffs Trump announced were higher than almost anyone expected. This is a much bigger shock to the economy than the infamous Smoot-Hawley tariff of 1930, especially when you bear in mind that international trade is about three times as important now as it was then.”

“The size of the tariffs, however, wasn’t the only shocking thing about the Rose Garden announcement. Arguably what we learned about how the Trump team arrived at those tariff rates — the sheer malignant stupidity of the whole thing — was even worse.”

“You might be tempted to dismiss complaints about the policy process as elitist snobbery. But credibility is a crucial part of policymaking. Businesses can’t plan if they have no idea what to expect next. Foreign governments won’t make policies that help America if they don’t expect us to respond rationally.”