Most people have no clue how the economy works, which is why Trump’s lack of knowledge about the economy doesn’t matter. As long as Trump sounds like he’s saying something that’s correct there will be a group of people that believe that Trump’s economic policy is actually in the United State’s best interest. Trump could even say that the government should print more money to pay down the federal debt and some of his supporters would probably think that this should be economic policy. In fact, investigative reporter Bob Woodward claims that Trump said, in regards to the national debt, “just run the presses — print money.”
There are a few other examples that show how Trump doesn’t understand economics. For instance, during a cabinet meeting in 2017 while Trump bragged about the US economy reaching 2.6 percent he explained, “Two-point-six is a number that nobody thought they’d see for a long period of time. Remember, I was saying we will hit three at some point in the not-too-distant future, and everybody smiled and they laughed and they thought we’d be at one. And 2.6 is an unbelievable number, announced on Friday.” However, in 2017 2.6 percent growth was not unbelievable, in fact, under Obama’s presidency the economy grew faster during 14 quarters and during 8 of these quarters the economy grew quicker than 3 percent.
Another example that shows Trump’s lack of understanding economics is Trump’s focus on decreasing bilateral trade deficits. As former Federal Reserve Chair Janet Yellen explained, “I think almost any economist would tell you that there’s no real meaning to bilateral trade deficits, and it’s not an appropriate objective of policy.”
Trump’s use of tariffs to solve economic problems, or at least things that he calls economic problems such as trade deficits, is another way Trump shows a lack of knowledge about economics. This is because tariffs are not a good way to remedy economic problems since it becomes a cost for citizens of the country that are using tariffs. In other words, when the United States uses tariffs on other countries, Americans are forced to pay more for goods. However, many of Trump’s supporters believe Trump’s use of tariffs is good because they believe it will force country’s into trade deals that are more beneficial towards the United States. This shows a misunderstanding of economics because it ignores how tariffs hurt the United States.
As can be seen from Trump’s rhetoric, he says many things that the person that doesn’t understand economics may believe. Often times these things that he says are based on oversimplifications of economics, data, and policy. For example, at first glance someone that does not know much about economics may believe that 2.6 percent growth is an incredible amount of economic growth because they do not know that there is data that explains that under the Obama administration economic growth at times exceeded 3 percent.
Many people, like Trump, may also assume that bilateral trade deficits are always bad (and that Trump will fix these terrible trade deficits). However, there is evidence to support the position that trade deficits are only bad sometimes. Trade deficits are good if the deficit creates long term investment or is a sign of rising income, they’re bad if the deficit represents borrowing to finance consumption, and they’re meaningless if a trade deficit expresses consumer preferences.
Americans having a lack of knowledge of economics seriously hurts the United States. This can be seen in the way Trump operates. He feeds off the lack of knowledge and understanding of economics. And the lack of knowledge the general population has of economics has led to Americans voting for a president that does not have their economic interests in mind and that oversimplifies economic policy to a dangerous degree.