What Economists Could Learn From George Costanza

“It has sometimes been remarked that asking five economists a question will generate 10 different answers,” Larry Summers, then the secretary of the Treasury, observed at a hearing of the House Ways and Means Committee nearly 25 years ago. On the issue the committee was discussing that day, however, “there has been only one answer.” He was speaking of “welcoming China into the global economic system,” which economists guaranteed would bring better jobs and greater prosperity to Americans.

It didn’t work out as promised. Rather than improve the fortunes of American workers, globalization has encouraged companies to shift their production to countries where governments hand out favors and workers come cheap. U.S. industrial output has, at best, remained flat since the mid-2000s, and workers in the manufacturing sector have been getting less productive for more than a decade.

The United States has fallen behind China and others in fields from semiconductors to batteries to commercial airliners, just as business leaders like Andy Grove, Intel’s chief executive back in its glory days, cautioned it would. The trade deficit has exploded, even in the advanced technology products that were supposed to benefit from access to new markets. Across the country, communities have collapsed, and deaths of despair have surged.

Which is why it’s remarkable to see economists invoking the same faulty assumptions and models that got us into this mess, in order to make the case against Donald Trump’s proposed tariffs. Michael Strain, the director of economic policy studies at the American Enterprise Institute, says they “would be a disaster” and “very, very bad.” Adam Posen, the president of the Peterson Institute for International Economics, calls them “lunacy” and “horrifying.” All 39 academic economists surveyed by The Wall Street Journal “strongly oppose” the idea.