A young man might go to business school believing he’s obtaining some sort of academic training that will enable him to make a comfortable living. His degree may gain him entry into a large corporation, where he can work his way up to a good income. This may even put him on the fast track to what he envisions as success.
But his academic training won’t likely be of any real use. He won’t be prepared to create new products or deliver new services or technologies. He won’t possess a special knowledge that will improve the wellbeing or satisfaction of others. He won’t have the skills to bring in new business or grow the bottom line.
Rather, his academic training will have prepared him to use spreadsheet entries to forecast quarterly revenue and margin targets. What’s more, if the numbers show a disagreeable trajectory, he won’t have the skills or slightest inkling as to what to do about it. He’ll merely ride the wave down until it crashes on the rocky reef.
But if he’s in a position of leadership, he’ll likely panic. Out of his element, he’ll chase one idiotic solution after another. He’ll package up and sell off a segment of the business. He’ll invest in a new company branding initiative or fancy computer based system tools. He’ll postpone the effective date of annual merit increases until the second quarter. He may even require that workers put $0.25 cents in a collection jar every time they fill up their coffee mug.
The results of these efforts will likely be the exact opposite of that intended. Instead of stemming the hemorrhage of red ink, these efforts will accelerate it. Before long the productive employees will jump like rats from a sinking ship. After that, the company will take on water in earnest.
We’ve seen it happen first hand. We know how quickly these things can go down. Here’s the point…
A Track Record of Perfection
Peter Navarro is the Director of the National Trade Council of the United States. This, no doubt, sounds like an impressive and essential job title. Yet, somehow, the first 241 years of the nation’s existence passed along fairly well without it.
So given that this is now an essential office of the executive branch of the U.S. government, we have some questions. Namely, what is it, exactly, that the Director of the National Trade Council does? Do you know the answer? Well, neither do we.
We do know that Director Navarro, a PhD in economics from Harvard, spent over 40 years in academia. His primary purpose has been researching and writing about how America gets a raw deal from its global trading partners.
On occasion, Navarro’s taken a break from his studies to run for political office in San Diego. As a political candidate his track record is perfect. He lost the mayor’s race in 1992, the 49th Congressional District in 1996, and the District 6 city council seat in 2001. We even came across one report that he’d run for political off five times, losing each time; though we couldn’t confirm the details.
The exclusive attention of Navarro’s labors since roughly 2005 have been, in the words of one of his book titles, Confronting the Dragon. The dragon to be confronted, according to Navarro, is China. His main premise is that war with China – both trade and military – is inevitable.
In economic circles, he’s considered an embarrassment. Dan Ikenson, director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, called Navarro a “charlatan”. The Economist thinks his ideas on the trade deficit are “dodgy economics” and “fantasy”.
Confronting the Dragon with Peter Navarro
But in Navarro, President Trump found his perfect stooge. Here’s a man who provides Trump with the limited academic cover he desires to pursue his MAGA agenda. Attainment of this ideal seems to hinge upon closing America off from foreign competitors so that American workers can get back to work making light bulbs and picture frames.
The difference between the President and the Director of the National Trade Council on any issue of the day comes down to one point: rule. The President can order practical or impractical actions on all important and trivial matters. The Director, on the other hand, is limited by his influence.
Navarro, a lunkhead, has presently garnered full influence over President Trump in the area of foreign trade. Together, they’re releasing economic chaos on friends and foes alike through new tariffs and border taxes. Yet, their assessment of the cause of America’s troubles is off the mark.
After decades of government expansion and ever increasing government and consumer debts, the United States finds itself on a disagreeable trajectory. These massive debts, remember, are responsible for the gaping trade deficit. In China, Trump and Navarro have a convenient boogeyman – a dragon – for the recline and flail of America’s manufacturing sector.
Alas, the results of their trade policies will likely be the exact opposite of that intended. Confronting the dragon with Peter Navarro is a losing prospect. Without question, these actions will lead us to bitter defeat.
for Economic Prism