A couple of days ago, in the course of documenting Goldman’s new forecasts for S&P earnings in 2019 and 2020, I joked that somebody should probably call up Council of Economic Advisers Chairman Kevin Hassett and get his hot take.
That was a reference to Hassett’s absurd early October contention that Goldman is conducting “opposition” research on behalf of Democrats and, implicitly, on behalf of foreign governments. That contention came during an interview with CNN in the context of a late September note that Hassett readily admitted he hadn’t actually read.
It’s of course true that Wall Street isn’t particularly enamored with the Trump administration’s trade policies, but when it comes to explaining that palpable disdain, you might want to consider whether the simplest explanation is the most plausible. That is, rather than suggesting that Wall Street banks are foreign operatives or Democrat puppets, you could just chalk up the criticism to the fact that Trump’s protectionist trade policies are set to dent global growth, pressure corporate profits and just generally undermine the world economy.
But don’t tell that to Peter Navarro, who on Friday delivered one of his most inflammatory, conspiracy-oriented screeds to date while speaking at the Center for Strategic and International Studies in Washington. Just watch this and try to wrap your head around the fact that this man is effectively in charge of U.S. trade policy:
If you’re wondering what’s got Navarro so riled up, you can probably point to comments Gary Cohn made earlier this month at Bloomberg’s New Economy Forum in Singapore, where he said Trump found “one economist on Amazon who thinks trade deficits matter, and he listens to him.”
That’s obviously a reference to Navarro and his farcical “Death By China” book which, if you’re like Trump and don’t like to read, comes in documentary form and features a Bowie knife with a yuan note wrapped around the handle literally stabbing America in the heart(land) on the movie poster.
As a reminder, almost nobody takes Navarro seriously. Peter isn’t what you might call a universally respected academic. He’s had a rather peculiar career that’s seen him try everything from running for elected office to penning books on how to get rich with macro analysis to tilting at Chinese windmills. He seems to have found his niche with the latter thanks in no small part to Trump, who apparently believes he has found a kindred spirit in the University of California, Irvine professor.
Whether or not Navarro knows what he’s talking about is debatable (see here for instance). As The New Yorker’s Adam Davidson wrote back in 2016, “Navarro’s views on trade and China are so radical that, even with his assistance, I was unable to find another economist who fully agrees with them.”
You’ve got to love that. Even when Navarro tried to point The New Yorker in the direction of people who might agree with him on trade, those same people didn’t agree with him.
As Davidson went on to say, “Navarro is the only Ph.D. economist I was able to find who enthusiastically supports Trump.”
It’s a match made in heaven (or hell).
More than one observer has even gone so far as to suggest that Navarro’s understanding of economics is on par with that of a college freshman. But to Trump, he’s a “visionary economist.”
That’s what Gary Cohn means. Navarro is a joke, and everybody but Trump knows it.
And for anybody out there who might be inclined to cheer Navarro for calling Wall Street “unregistered foreign agents”, don’t forget that Peter also called a number of iconic American companies foreign agents back in June. Specifically, he accused GM and Harley of “speaking with forked tail pipe” when they criticized Trump’s tariffs.
In other words, Navarro would have you believe that everybody is a “foreign agent”, even the very same companies that Trump was elected to help resurrect.
The bottom line is that if you disagree with Peter’s protectionist policies (which almost all economists and business leaders do), you are a “foreign agent” and that goes not only for Wall Street bankers, but also for America’s most iconic brands. By Peter’s logic, if you bought a Harley this year, you’re aiding and abetting a foreign agent.
Oh, and when you hear Peter make the kind of inflammatory accusations you hear him make in the clip shown above, just remember that when he’s in the same room with Gary Cohn, that tough guy shtick dries up real quick.
So not intimidating is Navarro in person, that even Steve Mnuchin refused to back down from a shouting match with him when the two were in Beijing earlier this year.
And when it comes to whether Peter is brave around Gary Cohn, just remember that when Navarro made the mistake of calling Gary “a Wall Street establishment idiot” to his face, this is what Gary reportedly said next:
[You] shut the f— up and listen. You might learn something.
My guess, given how spineless cowards usually react when real aggression is staring them straight away in the face, Navarro did indeed “shut the f— up”, but he most assuredly did not “listen”, because the U.S. subsequently plunged down the protectionist rabbit hole.