Saturday, July 06, 2019

It Feels So Good When You Stop

The stock market is also soaring, with the Dow Jones Industrial Average setting a new record high this week on optimism about an end to the U.S.-China trade war (News story)
I have a new explanation for Trump's trade war with China. It makes us poorer. Ending it will make us richer, raise the stock market, make Trump less unpopular with tech firms. Voters vote largely on current information. So if he ends it a few months before the election ...

Which reminds me of the story of the man in the insane asylum for hitting himself in the head with a hammer. When one of the doctors asked him why he did it, the answer was "Because it feels so good when I stop."

4 comments:

Trey said...

Yeah, someone else besides me has figured out Trump's strategy! Improve the economy during your early term by regulation cutting, and then improve it even more by dropping the trade war close to the election!

Carl Milsted said...

Always remember: the Libertarian candidate in 2016 was far more protectionist than Trump. Gary Johnson was advocating the Fair Tax, which was the mathematical equivalent of a 30% across the board tariff on all imported consumer goods.

TheVidra said...

I think the regulation cutting has also contributed to the constant economic growth, in spite of every else.

David Friedman said...

@Carl::.

I don't follow that. The tax would be the same on imported goods as on domestic goods, so not equivalent to a tariff at all.