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The year of thinking dangerously

Author(s): Scott Sumner

From Library of Economics and Liberty:

Donald Trump seems to have the ability to get otherwise sensible people to adopt some of the most bizarre positions imaginable. Here's Jonah Goldberg, describing two recent victims of Trumpism:


Consider Larry Kudlow and Stephen Moore. In August, the two legendarily libertarian-minded economists attacked Trump, focusing on what they called Trump's "Fortress America platform." His trade policies threaten the global economic order, they warned. "We can't help wondering whether the recent panic in world financial markets is in part a result of the Trump assault on free trade," they mused. As for Trump's immigration policies, they could "hardly be further from the Reagan vision of America as a 'shining city on a hill.'"

 

Months later, as Trump rose in the polls, Kudlow and Moore joined the ranks of Trump's biggest boosters -- and not because Trump changed his views. On the contrary, Kudlow has moved markedly in Trump's direction. He now argues that the borders must be sealed and all visas canceled. He also thinks we have to crack down on China.


Fortunately, not all conservatives have abandoned their principles:

 

The irony is that reform conservatives almost uniformly oppose Trump's populist deformation of conservatism, and the former purists are now calling for unity behind the Mother of all Capitulations, rationalized by Trump's promise to win, conservatism be damned.

And it's not just a phenomenon of the right; Trump's ideas are also making powerful headway among progressive intellectuals. This is from a recent blog post by the author of "Pop Internationalism":

So the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don't know exactly what form it's taking.

Now in fairness, Paul Krugman goes on to say that he opposes the idea of tearing up existing trade agreements. But once you've argued that free trade is a scam, how can you expect the average voter to distinguish between not adopting more agreements, and tearing up existing agreements? I doubt that "Joe Sixpack" loses sleep over hurting the feelings of foreign diplomats. He's probably more drawn to politicians that have the courage of their convictions--is trade good for America, or not?

Opposition to free trade doesn't even make sense from a nationalistic perspective. America gains from trade. But what I find interesting is the number of progressives who seem to be turning against free trade, even though the only even halfway plausible argument against it is nationalistic. I don't think even Trump or Sanders would claim it makes Mexicans and Chinese worse off. So has the "liberal" wing of the American economics profession now become nationalistic? Is a policy that clearly benefits the world as a whole, and may or may not benefit America, now considered a "scam"? It would seem so. Do America's progressives even care that not extending free trade to Vietnam will hurt the Vietnamese poor---probably 100 times more than any (doubtful) tiny benefit from protectionism to America? Haven't we done enough to Vietnam---are we now going to also turn down the TPP?

Add in the fact that Keynesians continue to talk about fiscal stimulus even as interest rates rise above zero (and hence there is no case for it), and Democrats want a $15/hour minimum wage (which risks high unemployment), and the GOP seems to want to kick millions of highly productive workers out of the country (which would lead to huge price increases for fruits and vegetables), and I think it's fair to say that the intellectual climate today is the worst in my lifetime, and it seems to deteriorate almost daily.

Classical liberalism may be dying out in many quarters, but you can count on Econlog to keep the flame alive during the long dark night ahead.

PS. This post by David Henderson challenges one of the lines of argument used by Krugman in reaching his conclusion that free trade is a scam.


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