Gary Cohn announced his resignation last week as head of the National Economic Council. He apparently lost a battle to block Trump’s tariffs on steel and aluminum.
Trade tariffs are so wrong-headed and nonsensical that the Shock Exchange assumed Trump would back off his rhetoric. He has often taken to Twitter to engage in saber rattling only to backtrack or change his mind later. The Shock Exchange thought this would be another one of those head fakes. After all, a trade war could hurt U.S. businesses and drive the stock market down where wealthy people have parked their money. At Trump And The Global Economy town hall in November Professor Lance Brofman explained the folly of trade wars and their unintended consequences. The Shock Exchange assumed Trump and Cohn were listening. Trump, Obama, Janet Yellen, Ben Bernanke, Draghi, Kuroda, Merkel, et. al have made it their mission to help the investor class. Why would Trump change course now.
It should be interesting to see how Kudlow explains Trump’s policies to Wall Street and their impact on the economy. A key question is whether main street will finally benefit from any of these policies.
