This morning at 7:15 am EST, I was a guest on a New Orleans radio show, hosted by Tommy Tucker on WLL. (This was 6:15 am New Orleans time.) The topic was our new president's trade policies, in relation to employment.
With regard to using tariffs, either generally or selectively against particular companies that move plants out, as a way of increasing employment, here's what I said. Let's travel back to 2012, when Romney was running against Obama. Some economists believed Romney's plans were better for the economy and jobs, others believed Obama's plans were better. Now let's go to the present. Not a single reputable economist in the country believes that Trump's trade policies will increase employment. And these aren't just academic economists - real businesses pay real economists real money to help them anticipate economic developments.
I noted that it might be easy to arrange a story every week about some company that supposedly moves in jobs or decides not to move them out due to Trump. Companies have every reason to court both good publicity in the country and favor with the current administration by cooperating to devise these stories, even if they aren't really true regarding what happened and why. But even if they were true, in a country where (even when things are going great) hundreds of thousands of jobs are created and lost on a regular basis in real time, they're utterly trivial in terms of the overall employment situation.
Retaliatory tariffs against particular companies might be illegal under U.S. law. They would also risk prompting retaliation by other countries that could cost us jobs and raise consumer prices. Plus, even if a particular company was affected by the threat, when you think about the level of dynamism and change in the world economy, this focus on particular companies that might move out particular jobs is a bit like trying to calm the Pacific Ocean by putting a giant concrete block at one point where the waves are a bit choppy. You can't affect the ocean as a whole that way.
A listener asked me what I would do to promote employment. I said for the short term, stimulus, such as building infrastructure, and in the long run, better education, job training and re-training, social insurance and other (such as childcare) support that makes it easier for people to work.
Then I was asked about the border adjustment plan in Ryan's so-called "Better Way." I said, this is a really interesting proposal, we could have a 3-hour academic seminar discussing it. But the big point is this. While it might conceivably lead to a good place, both the transition of getting to it and the fit between it and the rest of the tax system create gigantic problems that make me very nervous and that would need to be carefully addressed over a long implementation period - which isn't how it will happen, if it does happen.
On that note, we were done.