World renowned economist Paul Krugman is definitely not a fan of foolishness, so needless to say, he cannot stand Donald Trump. That said, Krugman evaluated the economic/trade aspect of Monday night’s debate and Krugman concluded that Donald Trump was talking nothing but garbage when he talked down the US economy.
There were specifics: China is “devaluing” (not so — it was holding down the yuan five years ago, but these days it’s intervening to keep the yuan up, not down.) There was this, on Mexico:
Let me give you the example of Mexico. They have a VAT tax. We’re on a different system. When we sell into Mexico, there’s a tax. When they sell in — automatic, 16 percent, approximately. When they sell into us, there’s no tax. It’s a defective agreement. It’s been defective for a long time, many years, but the politicians haven’t done anything about it.
Gah. A VAT is basically a sales tax. It is levied on both domestic and imported goods, so that it doesn’t protect against imports — which is why it’s allowed under international trade rules, and not considered a protectionist trade policy. I get that Trump is not an economist — hoo boy, is he not an economist — but this is one of his signature issues, so you might have expected him to learn a few facts.
More broadly, Trump’s whole view on trade is that other people are taking advantage of us — that it’s all about dominance, and that we’re weak. And even if you think we’ve pushed globalization too far, even if you are worried about the effects of trade on income distribution, that’s just a foolish way to think about the problem.
So don’t score Trump as somehow winning on trade. Yes, he blustered more confidently on that subject than on anything else. But he was talking absolute garbage even there.
