Peter Navarro has been on television nearly every day over the past week or two, and it hasn’t gone particularly well.
Specifically, Peter struggled to craft convincing responses this month when pressed by, in order, Chris Wallace, Maria Bartiromo and Sara Eisen. Navarro’s inability to defend the administration’s trade policies during those interviews was highly amusing considering his interlocutors. Only one of the people mentioned above even counts as a real journalist and he works for the Trump-friendly Fox News.
In any event, it’s no secret why Navarro has been all over your TV screen. Trump is getting worried about the effect of the trade war on markets and the economy.
The president’s latest tariff escalation prompted an explosion of volatility in markets, forced China to devalue the yuan and raised the specter of higher prices for US consumers during the holiday shopping season.
Amid the tumult, long-end yields in the US fell sharply, leading directly to the inversion of the 2s10s curve, which exacerbated market angst and raised recession alarm bells. On Wednesday, the Dow had its worst day of 2019, plunging 800 points, prompting a flurry of presidential tweets (including the already infamous “crazy inverted yield curve” SOS to the Fed) and a panicked call with bank CEOs.
This week, senior administration officials told CNBC that Navarro and Trump are alone in the White House when it comes to insisting that the trade war isn’t responsible for market volatility.
That’s the backdrop for Navarro’s Sunday cameos on national television, which included a stop on ABC.
Asked about Wednesday’s selloff on Wall Street and “indicators that the US could be headed for a recession”, Navarro bragged about his storied career in analyzing the business cycle and forecasting markets. We would gently remind everyone that Peter is something of a pariah in academia – that’s not necessarily to suggest that he is, like Trump, a complete simpleton, it’s just to say that Navarro’s views on how the global economy works aren’t totally in keeping with economic orthodoxy. Here’s Peter:
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That could be yet another clip that ends up living in infamy. “What I can tell you with certainty is that we’re going to have a strong economy through 2020 and beyond with a bull market”, Peter declared.
To be clear, it is always foolish to make those kinds of predictions if you are a politician or a public figure of any stripe. While Wall Street analysts can get away with bad calls, those types of unequivocal pronouncements from polarizing figures like Navarro will be looped in perpetuity if they turn out to be wrong.
Further, Navarro said, quote, “the Federal Reserve going into the holidays will be lowering rates significantly”. Those are his exact words. US monetary policy is supposed to be independent. There is no way that Navarro can make that statement. He does not know what the Fed is going to do and if he does, it means the administration has commandeered the central bank.
Recall that on August 14, during remarks to Fox Business, Navarro seemingly admitted that the tariffs hurt US consumers. But when pressed on that Sunday by CNN’s Jake Tapper, he simply refused to acknowledge the glaring (and inherent) contradiction in calling the delay of duties on consumer goods a “Christmas present” and claiming that those same duties would not have hurt US consumers.
Not only that, he steadfastly refused to address voluminous evidence from the most respected institutions on the planet which all (without exception) say the administration is, for lack of a better word, lying about the impact of the tariffs. Here’s that clip:
We would implore you to note that although Navarro is quick to say “that dog won’t hunt” when confronted with evidence from Harvard, The University of Chicago, the IMF and the Boston Fed, he never actually refutes the studies. Rather, he obfuscates. When called out on that by Tapper (“Are you saying that their research is wrong?”), Navarro refuses to answer the question (“Hang on, hang on.”)
The reason Navarro won’t answer the question directly is because those studies are not wrong. Indeed, they cannot be “wrong” because they are not based on theory, they are based on numbers, and here, in part, is what those numbers show:
(Goldman, US Department of Labor)
The tariffs are absolutely being shouldered by Americans. Period.
And when Navarro says CPI is under control, he’s right, but that’s the aggregate data, and even there, you’ll note that core CPI has risen 0.3% MoM for two straight months.
More damning than all of that, though, is Navarro failing to explain how it’s possible to reconcile what he told Fox last week (during one of several interviews with the network) about delaying tariffs on key consumer goods being a Christmas gift with the idea that those tariffs wouldn’t have affected the price of US goods.
Watch that section of the Tapper clip again:
The administration simply refuses to admit what’s going on, even when they are confronted with evidence and with their own communications missteps.
Do not be surprised if, six months from now, Trump and Navarro begin to suggest that the data the government puts out is wrong or even that the stock market is being rigged against them. That’s what’s next.