An interesting challenge on tariff logic from former Reagan budget director, David Stockman

David Stockman was President Reagan's former budget director.

Back in the '80s, news magazines used to put him on the cover and call him things along the line of Mr. Mean, etc., because he was so serious about budget cutting.

He knows a lot about how to do it in a government context. He's also insistent that numbers add up. Over the years, he hasn't been afraid to speak truth to power, even if the power is one of the good guys. While he can be critical of good leaders on green eyeshade issues, he's not a #neverTrump or part of that swamp crowd. He's just an economist.

So when I started seeing tweets from him showing a masterly understanding of where inflation comes from, and how government spending eventually translates to inflation, I started following.

He came up with an intriguing thought about where the reduced status of American workers comes from, in a retort to Commerce Secretary Howard Lutnick, regarding trade deficits:

Well, no, Howard. The reason we have massive, unsustainable trade deficits is that the Fed inflated the bejesus out of domestic prices, wages and costs for decades, and priced American producers and workers out of global markets. "They" didn't "steal" our markets---the spenders…

— David Stockman (@DA_Stockman) April 6, 2025

So, rather than trade pacts, or tech advances, the real root of the American worker's reduced status is Fed money-printing to pay for the ever expanding size of government. It brings inflation, devaluation and a disincentivization of savings, in favor of bigger government and weaker, poorer people.  In return, the 'giveaway' that Stockman spoke of comes presumably as inflated American dollars buy foreign goods and foreign investors in turn take the dollars and pump them back into the Treasury market, which certainly suits the big spenders in government fine.

Obviously, that is an argument that hasn't been out there, but should be -- It should be studied, mulled over, and if found true, implemented with a slight shift of course and focus from the Trump administration.

I know I'll be thinking about it. I think he's a voice we need to hear more from.

He really does have a lot of interesting things to say, and I hope that the Trump administration can give him some ear time in order to avoid economic mistakes that could cost Republicans the midterms in the midst of an economic downturn.

If government overspending is the root of the problem for American workers, then DOGE is even more heroic than anyone suspected, and Trump will have a free hand to insist on reciprocal tariffs alone instead of the problematic additions of trade deficit criteria in setting tariff rates from allies and foesw alike.

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