Another example, more recently, is the fact that we had so little inflation from the great financial crisis until Covid because the price of goods, which are the things that can more easily move across an international barrier, were coming down in price or at least not going up in price. And they kept our inflation at a very, very low level, and they made things cheaper and better for so many Americans who are out shopping at Walmart or wherever they go.
Healy: I don’t know if Trump took Econ 01, but what does he believe? What does this say about his vision, either the economy or America and the world or something else?
Rattner: I have to assume he took Econ 01, because he went to Wharton.
Healy: That’s probably true.
Rattner: But I think he may have gone into some time warp or something and ended up in a 19th-century class on economics, because back then they taught you what we call mercantilism, that countries’ goal was to accumulate gold. They all wanted more gold, and so therefore, you wanted to have trade surpluses, and therefore tariffs were high, and trade barriers were high. But we’re not in the 19th century anymore. We’re in the 21st century.
Trump doesn’t have a lot of core beliefs, in my opinion. As you watch his antics and you watch over the years — and you’ve watched him for many, many years — he used to be a Democrat, he was pro-choice, he was this, he was that, and now he’s suddenly a hard-right Republican. But the one constant in his life has been this mercantilist view about trade, and therefore we do have a large trade deficit. He believes it’s because other countries don’t trade fairly. As I’ve indicated, there are other reasons for it, and so this is how he responds.
Healy: I’d put it a little differently. I’d say he really believes in walls, in keeping out the invaders that he likes to talk about, in keeping in what he thinks he can do in terms of manufacturing in business. But this idea that the global economy, markets can work in a world where America turns into Fortress America or Trump’s America — can that work in some way on America’s behalf? I still like to think that Trump is not trying to send the markets crashing and send the economy into recession, but I don’t know.
