Trickle Up Economics

Letter to the Editor

Here’s a Letter I sent the New York Times about a week ago:

Dear Editor:

Mohamed El-Erian celebrates “economic statecraft” as a bold new system of operations for the global economy. He also lets the end result slip: “already stressed low-income households will face some higher prices.”

Strip away the talk of resilience and reciprocity and the new doctrine amounts to little more than “trickle-up economics.” The people who write the rules and lobby for the tariffs are large, wealthy, and politically well-connected. The people who pay for them shop at the dollar store and worry about getting to work.

Every protected industry, every “just-in-case” supply chain, every subsidized plant sends a bill. That bill won’t be paid by people in the board rooms and consultancy offices El-Erian’s Wharton students will one day staff. It lands on the single mother buying groceries and the retiree stretching a fixed income.

Washington has rediscovered an old trick. Promise security, deliver higher prices, and count on voters not noticing who cashed the check. Adam Smith understood this 250 years ago and we should, too.

David Hebert
American Institute for Economic Research