This is Brad DeLong's Grasping Reality—my attempt to make myself, and all of you out there in SubStackLand, smarter by writing where I have Value Above Replacement and shutting up where I do not… More Lies About Trade Tariffs From the Chaos MonkeysHow can it be that imposing tariffs did not cause inflation or reduce affordability, but that removing tariffs will reduce inflation and increase affordability? It makes no sense. But it is not...
How can it be that imposing tariffs did not cause inflation or reduce affordability, but that removing tariffs will reduce inflation and increase affordability? It makes no sense. But it is not supposed to. The point is not to make a coherent argument, but to provide talking points that corrupt media can flash on screens to convince the uninformed to follow someone they portray as a leader doing something...The Trumpists want interest-rate cuts right now. The majority on the Federal Reserve’s FOMC is signalling that it will not deliver because it is worried about inflation above target, creeping up, and fueled by past tariffs with effects still working through the pipeline and unknown random chaotic future tariffs. The Trumpists’ response is incoherence: insisting tariffs don’t raise prices while arguing that removing them will lower prices, and so demanding immediate rate cuts starting in mid-December. Meanwhile, spin‑authoritarian tactics—media capture, exemptions, and rolling threats—block normal adjustment. Models that assume steady policy understate harm: the real‑world regime of chaos tariffs delivers lower GDP, fewer jobs, and higher prices by a multiple of what economists’ certainty-equivalent general-equilibrium models estimate. Plus there are the further corrosive effects a politics of dominance via enforced doublethink rather than argument based on, you know, actual facts. And so Jared Bernstein watches Trumpists tell yet more lies:
I hate to break it to Jared, but making statements that add up to a consistent logical argument or picture of the world is not a goal of the Trumpists, or of Trump. The goal is not to persuade onlookers and interlocutors by logical argument. The goal is to flummox interlocutors, and thus to get onlookers to go along by demonstrating dominance. See “Gish Gallop”:
The right-wing Tax Foundation is trying to keep score:
The Tax Foundation GE Model estimates that the fully phased-in effect of the tariffs is to reduce employment in the U.S. by 0.5%—700,000 lost full-time jobs. And, no, this is not a loss that other macroeconomic policy moves can neutralize. It does not estimate the effect on inflation or the price level. I have one very large complaint about the Tax Foundation’s modeling strategy. It is grossly inadequate to the problem. They estimate planned, constant tariffs. We have unplanned, chaotic, constantly moving tariffs. Thus all of the normal adjustments that could be made to reduce and cushion the adverse impact cannot be made. And there are a host of other production- and employment-reducing steps that are now being taken in order for firms to buy insurance against future random chaos-monkey tariff moves on the part of Trump. My personal guess is that the actual likely damage is perhaps five times larger, plus added additional risk-aversion general-equilibrium effects arising because foreign powers will not simply retaliate to imposed tariffs, but understand that every point of integration of their economies with the United States—whether viewing the U.S. as customer, supplier, or value-chain participant—is an extra point of potential attempts by Trump and his band of grifters to try to exert leverage. But step back: The deeper point and argument is one that we have known since before Orwell: the point of doublethink is not to channel thought and analysis, but rather to demonstrate power. Keep reading with a 7-day free trialSubscribe to DeLong's Grasping Reality: Economy in the 2000s & Before to keep reading this post and get 7 days of free access to the full post archives. A subscription gets you:
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More Lies About Trade Tariffs From the Chaos Monkeys
Friday, 21 November 2025
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