~ Peter Navarro, Counselor to the President of the United States
“Navarro is dumber than a sack of bricks... Navarro is truly a moron. What he says is demonstrably false.”
~ Elon Musk,
Senior Advisor to the President of the United States
David Ricardo was not “dumber than a sack of bricks.” Rather, the brilliant, early 19th-century British economist developed the theory of comparative advantage, in opposition to the then, widely accepted, mercantilism. In his “Principles of Political Economy and Taxation” (1817) he proves that countries running trade surpluses are not “cheating” their trade partners and that free trade benefits both parties, regardless of which runs a surplus/deficit.
Since Ricardo’s era, in the modern globalized trading world the country that has the world reserve currency must, by necessity, sustain a current account deficit. This is because the extra demand for its “international” money must overvalue its currency. This ensures that said country sustains more imports than exports, penalizing its net trade balance into long-term deficit.
Rhetoric surrounding the radical “Liberation Day” tariff regime ignores Ricardo and harkens back to the good-old-days of tail fins and American manufacturing dominance. We remember Dad’s made-in-Detroit 1957 Chrysler Windsor, and “good” as those days seemed at the time (real GDP per capita was about one quarter of today’s), they pale in comparison to the 21st century—partly because consumer goods were inferior and much more expensive then. The idea that Trump’s (now paused) drastic tariff regime would improve Americans’ standard of living is a complete fantasy.
~ Bill Strong and Stephen Rahl, Eschaton Opportunities Fund Quarterly Letter Q1 2025
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| 1957 Chrysler Windsor |
