In my latest Pittsburgh Tribune-Review column, I celebrate the unique and important perspective that is provided by a sound grasp of economics – and warn against mistaking that perspective for detailed knowledge that a sound grasp of economics emphatically does not provide. A slice:
One of the great benefits of my discipline – economics – is that it supplies “lenses” that allow us to detect important patterns of activity that cannot be seen from “the ground.” For example, it’s easy for someone on the ground to see that trade destroys some jobs, but it’s more difficult to see that trade also creates jobs and promotes growth. Economics offers a perspective that makes job creation and growth visible.
But even the finest economists can’t see, from their high perspective, the many details that cause entrepreneurs and consumers to choose as they do. Therefore, economists should be humble when recommending policies that override the particular decisions of private actors.
Speaking of Navarro, Ramesh Ponnuru explains why Navarro and Trump (and, also, Paul Ryan) are mistaken to argue that governments that use VAT taxes penalizing American firms when they – those governments – don’t charge VATs on the goods they export for sale abroad. (The fact that Trump and other politicians peddle this idiotic VAT notion as an example of allegedly ‘unfair’ trade speaks volumes about the quality of ‘thinking’ done by most politicians.)