Economist That Created Tariff Formula Trump Cites Calls Bullsh*t On Trumpty

I shouldn’t be the least bit surprised. In fact, when I first saw the ‘math’ I thought it couldn’t be that simple. Turns out the bigly super scientific formula Trump bragged about using to determine how big a tariff to slap on a given country didn’t say what he said it did!  I’m SHOCKED, SHOCKED I SAY to learn Trump misused and/or misrepresented someone else’s work.

However, University of Chicago Economist (and former Biden administration official) Brent Neiman has politely said Trump doesn’t know what the f**k he’s talking about. That Trump’s numbers using his equation/formula are WAY the hell off. Like I said, none of us should be surprised.

Right up front let me say I’m not an expert on economics. I’ve got a general understanding and over time learned which experts seemed to be trustworthy and which ones were full of sh*t hacks and shills.  I’ll also admit to not knowing who Brent Neiman was before this afternoon.

However, after reading this article on HuffPost I do now. Since Neiman is the one who created the formula/equation Trump made a fuss about you know what? I trust NEIMAN when he says Trump got it “all wrong!”  From the linked HuffPost article:

University of Chicago economics professor Brent Neiman, who worked for the U.S. Treasury Department under President Joe Biden, wrote in a New York Times op-ed Monday that Trump’s tariffs are roughly four times higher than they should be if they followed his math correctly.

Neiman recalls being shocked, wondering how they came up with such high rates. The linked article doesn’t say but I’ll bet he had some not very nice words about his reaction when he realized the current Office of the U.S. Trade Representative included research he (Neiman) had co-authored and published in 2012 as part of it’s justification for what Trump announced.  Neiman was more measured in his on the record response:

“But it got it wrong. Very wrong,” Neiman wrote. “I disagree fundamentally with the government’s trade policy and approach. But even taking it at face value, our findings suggest the calculated tariffs should be dramatically smaller — perhaps one-fourth as large.”

Other economists have similarly mocked the Trump administration’s tariff formula, calling it “embarrassing” and “malpractice.”

Neiman added some other points starting with Trump’s tariffs not being reciprocal as Trump claimed. (Other economists and world leaders have also said the same thing) He goes on to mention Trump’s mistakenly thinking tariffs on one country won’t affect imports from other countries – and completely ignores how this all affects exports. 

Neiman says while some of this might work with one small trading partner it won’t for the “broad salvo” announced last week. He wasn’t done, not by a long shot. Neiman noted how beyond NOT understanding how global trade and tariffs work that Team Trump came up with a flawed plan because it was based on four different numbers, themselves based on flawed assumptions!  Yikes. Sounds like what in my days on active duty in the Corps we’d call a “Charlie Fox” in polite company. (IOW a cluster f**k)  Here’s the kicker:

He then questioned where a plugged-in rate of 25% came from, while noting that the Trump administration offers “shockingly few details” in its methodology.

“I would strongly prefer that the policy and methodology be scrapped entirely. But barring that, the administration should divide its results by four,” he concluded.

So what we’ve got is an administration/President taking credible work done by a credible economist and misunderstanding and/or outright misusing it. In this case I lean towards the latter – they knew damn well they were full of sh*t but figured Neiman would keep quiet instead of calling them out.

I’m having flashbacks to the 1980s, with Ronald Reagan citing the “Laffer Curve” to justify his huge tax cuts – ‘Supply Side’ #1. The way Reagan explained it, and too many idiots believed it the tax cuts would spur so much growth that tax revenues would soar because people and businesses would be so much richer.

It didn’t work out that way at all as everyone knows. Reagan blew a giant hole in our economy, the annual budget and the national debt. The thing is, Arthur Laffer didn’t speak up at the time. He’d later say that while yes, his infamous “curve” was real and based on some sound economic principles it was limited in scope. It would only apply in certain situations on a specific set of circumstances and on a small scale.

It did NOT, and was never something that would or should be applied to something as broad as Reagan’s tax cuts! The point is that citing published, credible academic research but MISREPRESENTING said research isn’t new.

But the damage of lending credibility via some fancy use of a simple “curve” or “equation/formula” can let a villain get away with causing an awful lot of damage.  What Trump’s doing will I say do far more damage, to the world as well as the U.S. as what Reagan did.

Anyway I wanted to point out that the expert Trump used is a real, bona fide expert. He just didn’t say what Trump said his research says. And that expert, Brent Neiman isn’t at all going to sit back and let Trump spread the bullshit with a trowel without speaking out. 

I said I’m not an expert on economics so I did some looking to see who else might have tackled this subject, and broken it down in detail but in a way those of us who aren’t economic geeks can digest. I found this article from a source I’ve never heard of, but El Pias which covers the economy and business has an article titled Trump’s Big Lie: This is the simple formula he used to calculate the ‘reciprocal’ tariffs that’s worth the time to read. I urge you to do so if you want a good understanding of all this.

I won’t go into it here except to offer the concluding paragraph, and if nothing else take note of the last sentence:

However, the Commerce Department released its methodology Wednesday night, portraying it as much more complex than it actually was and citing bibliographies. Trump touted a voluminous report on trade barriers, but it was all posturing. “This is like every dumbass academic paper where they make some incredibly stupid claim but cover it up by using Greek symbols,” wrote the statistician Nate Silver in a post on X.

Nate Silver ain’t what he once was but this time he nails it!