On the 2016 campaign trail, candidate Trump railed against NAFTA as a “politician-made disaster” created by “a leadership class that worships globalism over Americanism.” He cited trade deficits with China as proof that America was constantly being out-manoeuvred or cheated. Trump asked Jared Kushner, his son in law, to find an economist with similar views. According to Vanity Fair magazine, Kushner searched Amazon and it pointed him to a 2011 book called “Death by China: Confronting the Dragon” by economics professor Peter Navarro and Greg Autry. Navarro was contacted and duly appointed as a senior economics advisor to the president. He later became the director of a new body called the White House National Trade Council and subsequently head of the Office of Trade and Manufacturing Policy, which was created by an executive order in April 2017.
Navarro’s elevation rankled Trump’s National Economic Council director, Gary Cohn, a former Chief Operating Officer of Goldman Sachs. Like almost every other prominent economist in the country, Cohn believed that Trump’s analysis was completely wrong. As a service-oriented economy – more than 80 percent of GDP is generated by services – America’s trade deficits are, in fact, a sign that it isn’t wasting valuable resources trying to manufacture goods that can be made more cheaply elsewhere. Cohn produced reams of data to confirm this analysis. But, according to Bob Woodward’s account in ”Fear: Trump in the White House” this was ignored. (“[Cohn] knew Trump had never read [a heavily researched paper on the service economy] and probably never would. Trump hated homework.”)
Cohn clashed with the strategist Steve Bannon who also supported slashing deficits and imposing tariffs. Bannon recently told National Public Radio that he and Cohn almost came to blows over the issue. Eventually, in March 2018, Cohn quit the White House after Trump decided to adopt the tariffs which launched the current trade war. Two months ago, he told the host of the Freakonomics podcast that the departure was largely due to a breakdown in policy discussions. “[W]e got to a point, unfortunately, where one or two people decided that they were going to no longer be part of a process and a debate [and] were going to use a direct connection to the president to set up a meeting and call in CEOs of aluminum companies and steel companies to announce steel tariffs and aluminum tariff …”
In other words, a trade war with global ramifications was effectively launched by a coterie of Trump’s hand-picked economic advisers – even though their views do not align with the majority of their peers. The economic consultants Trade Partnership Worldwide estimate that the current standoff could cost an average American family up to $2,300 a year. Furthermore, based on Trump’s record so far, there seems to be little hope that common sense will prevail. Woodward quotes Navarro as saying, publicly: “My function really as an economist is to try to provide the underlying analytics that confirm [the president’s] intuition. And his intuition is always right in these matters.”
During Britain’s 2016 referendum on the European Union, Michael Gove declined to name any economists who supported leaving the EU, saying that “people in this country have had enough of experts.” It was a foretaste of the Trump/Brexit moment when “the death of expertise” became entrenched in the culture. Two years earlier a professor of the U.S. Naval War College memorably described the transition as a “Google-fueled, Wikipedia-based, blog-sodden collapse of any division between professionals and laymen, students and teachers, knowers and wonderers.”
By no means is this myopia unique to the White House. Facebook CEO Mark Zuckerberg, effectively the gatekeeper of more than half the world’s news, has shown comparable naivety about the economic, political and ethical consequences of his company’s actions. The death of expertise or, more accurately, the rise of partisan experts who flatter the opinions of the powerful men who hire them has enabled an ignorant few to turn their suspect intuitions into policies which disrupt millions of people in other parts of the world.
Ten years ago, the Cornell psychologist David Dunning and then-graduate student Justin Kruger, published a study called “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments.” The so-called Dunning-Kruger effect subsequently became a popular term to describe amateurs who blundered into areas well beyond their competence. Trump’s trade war on China and – if not his entire presidency – is arguably the most consequential example of this folly to date.
