Like most economists, I’m wary of Trump’s tariff strategy. His effort to strong-arm our trading partners risks doing serious damage to their domestic economies and ours in the hope that they cry uncle first. But international trade and finance aren’t my fortés, so I’ve turned to some friends who really know what they’re talking about for more context and expert opinion. My first conversation about this was with Larry Kotlikoff. This week I’ve got Ross Levine on the show. Ross has occupied faculty posts at the University of Virginia, the University of Minnesota, Brown, and UC-Berkeley, and he’s served as an advisor to the International Monetary Fund, the World Bank, and the Fed. In this episode, Ross argues that Trump’s tariffs are only one reason to be concerned.
Ross calls Trump’s economic policies—and not just tariffs—the worst he’s seen in his professional life. He worries not only about prices and inflation but Trump’s bid for control over banking regulation and credit markets. According to Ross, the worst-case scenario would grant Trump an unprecedented degree of control over how US financial institutions can use their assets, which total around $150 trillion. The opportunities for corruption and manipulation are, Ross thinks, staggering. There are political questions as well. Trump was elected, after all, and a good many of his most ardent supporters have lost out to globalization. So far, they’re getting their way. But historically, Trump has been responsive to stock market volatility and polling—he’s already shown some signs of softening his approach. Congress has the ability to check Trump’s power, but congressional Republicans have so far shown little interest in asserting their branch’s co-equal status. How bad will things have to get before they do?
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0:43 Ross: Trump's economic policies are the worst I've seen in my life
7:36 Glenn's new book, SELF-CENSORSHIP
12:00 Trump’s bid to become the most powerful person in the history of the world
21:17 The disruptive effects of tariffs, financial regulatory manipulation, and extraordinary debt levels
27:58 Ross: Alienating our allies is only going to strengthen China
33:41 Glenn: Those who lost out to globalization are getting their way
41:04 Will Trump heed economic warning signs?
48:10 Can Congress constrain Trump?
Recorded April 19, 2025
Links and Readings
Edward Luce’s Financial Times piece, “Trump, Truss, and the ‘Moron Premium’”
Larry Kotlikoff’s post, “30-Year TIPS Are Looking Mighty Attractive”
Glenn’s most recent conversation with Larry Kotlikoff
Michael Sandel’s book, The Tyranny of Merit: What’s Become of the Common Good?
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