I would agree that most of the serious damage that is being done by the Trump administration to the US economy will accrue only over the medium term, and there is too much focus on short-term effects. At the same time, the economic policy mix shaping up comes across as uniquely misguided: An abrupt and capricious switch to non-cooperative trade policies; a sudden contraction in net immigration; 10 years of war-time high fiscal deficits; and, finally, installing a Turkish-type monetary policy of high inflation at the Fed.
I think you are getting a bit carried away here Albert. We both know the government has limited leverage on the Fed, so I would at least withhold judgement until we see who gets nominated to replace Powell -- himself appointed by Trump. Let's also not forget that it was the Biden administration that gave us war-time high fiscal deficits combined with near-double-digit inflation. At the time that was coupled with a pervasive expansion of regulation and industrial policy, no less misguided than what we're seeing now. The problem we face, sadly, is bipartisan.
Great piece Marco. As you know on tariffs I maintain that between three-months postponement and other tricks, the effective tariffs imposed by countries will be eventually practically insignificant (remember the ‘un fiorino’ scene in the Italian movie ‘non ci resta che piangere’?)
Thanks Luca. I tend to agree with you. The iconic scene you refer to is perfect for today's brave new world -- though the movie is set in the 1400s... Plus ça change... The scene also reminds us that what hurts a lot more than the token border levy is the absurd bureaucratic burden it accompanies, with all its depressing and dispiriting impact. Nothing left to do but crying, indeed.
I would agree that most of the serious damage that is being done by the Trump administration to the US economy will accrue only over the medium term, and there is too much focus on short-term effects. At the same time, the economic policy mix shaping up comes across as uniquely misguided: An abrupt and capricious switch to non-cooperative trade policies; a sudden contraction in net immigration; 10 years of war-time high fiscal deficits; and, finally, installing a Turkish-type monetary policy of high inflation at the Fed.
I think you are getting a bit carried away here Albert. We both know the government has limited leverage on the Fed, so I would at least withhold judgement until we see who gets nominated to replace Powell -- himself appointed by Trump. Let's also not forget that it was the Biden administration that gave us war-time high fiscal deficits combined with near-double-digit inflation. At the time that was coupled with a pervasive expansion of regulation and industrial policy, no less misguided than what we're seeing now. The problem we face, sadly, is bipartisan.
Great piece Marco. As you know on tariffs I maintain that between three-months postponement and other tricks, the effective tariffs imposed by countries will be eventually practically insignificant (remember the ‘un fiorino’ scene in the Italian movie ‘non ci resta che piangere’?)
Thanks Luca. I tend to agree with you. The iconic scene you refer to is perfect for today's brave new world -- though the movie is set in the 1400s... Plus ça change... The scene also reminds us that what hurts a lot more than the token border levy is the absurd bureaucratic burden it accompanies, with all its depressing and dispiriting impact. Nothing left to do but crying, indeed.