Rattner discusses the link between the lack of inflation following the 2008 financial crisis and the movement of goods across international barriers. He explains that consumer goods were becoming cheaper or maintaining stable prices due to global trade, which helped keep inflation levels low. This trend benefited consumers, particularly those who shopped at places like Walmart. However, he points out that Trump seems to have a mercantilist view of trade, which is more aligned with 19th-century economic theories that prioritized accumulating gold and having trade surpluses through high tariffs and trade barriers.
Despite Trump’s possible Econ 101 background from attending Wharton, Rattner suggests that the former president may be stuck in a 19th-century perspective on economics. Trump’s primary focus on trade deficits and his belief that other countries engage in unfair trade practices reflects a mercantilist viewpoint that is outdated in the 21st century. Rattner highlights Trump’s lack of core beliefs, except for his consistent stance on trade based on mercantilism, which he views as a contributing factor to the large trade deficit experienced by the United States.
In response to Rattner’s views, Healy offers a different interpretation, suggesting that Trump’s emphasis on building walls and restricting trade is about protecting American manufacturing and business interests. He questions whether Trump’s vision of erecting barriers in the global economy, such as with his “America First” policy, can ultimately benefit the country. He reflects on the potential consequences of such isolationist economic policies on market stability and the broader economy, expressing uncertainty about Trump’s intentions regarding market crashes and economic downturns.
The conversation delves into Trump’s shifting political affiliations over the years, noting his evolution from being a Democrat with progressive views to adopting a more conservative Republican stance. Despite these changes, Trump’s adherence to a mercantilist approach to trade has remained a constant feature in his economic views. Rattner acknowledges that while Trump’s perspective on trade may differ from mainstream economic theories, it remains a key aspect of his policymaking approach. This focus on trade deficits and perceived unfair practices by other countries shapes Trump’s decisions on tariffs and trade negotiations.
Healy and Rattner explore the implications of Trump’s economic vision, particularly in relation to the global economy and America’s role within it. They question whether Trump’s protectionist policies and emphasis on trade barriers can coexist with the interconnected nature of the modern economy. Healy expresses skepticism about the feasibility of Trump’s “Fortress America” or “Trump’s America” concept in the context of the global marketplace, raising concerns about its impact on market stability and economic growth. Overall, the discussion highlights the complexities of Trump’s economic beliefs and their potential ramifications for the broader economy.
