Response-Istvan Dobozi Ex-World Bank Lead Economist on Trump Tariffs

Members of both major parties and several of the minor ones say that this could be the most important elections in modern American history. Millions of Americans are struggling to make ends meet. "Trump Tariffs" have come under scrutiny from a range of sources, not just from economist Istvan Dobozi. This article will seek to respectfully and factually unpack and reveal apparent flaws in anti-tariff thinking, and will seek to do so in a way that will benefit all readers and the tariff debate. With that in mind, let me begin with a disclosure. I've personally met Mr. Istvan Dobozi at the Magyar Szabadság Kör (Hungarian Liberty Club) in Plant City, FL. Mr. Dobozican be a perfectly fine and gentlemanly fellow. This article will present a evidence-based intellectual disagreement, not to be considered as a slam on Dobozi himself. That said, with all due respect, and for whatever reasons, my impression having read several of his letters to this or that editor is that Dobozi may suffer from TDS - Trump Derangement Syndrome. While he bills himself as a "Former Lead Eco­nom­ist, World Bank, Sara­sota, FL, US." that doesn't mean that his analysis of the Trump tariffs is accurate.

Hopefully this fisking will reveal where and why Dobozi is mistaken. He has the right to use his First Amendment protected rights. But since Dobozi left a country that suffered under Nazi and then Communist rule for decades, he should know better than to engage in potentially misleading others on the obvious importance of tariffs. Tariffs done properly can protect and grow U.S. jobs, can benefit the federal budget, and can improve the overcall condition of earning potential of American employees and businesses. Dobozi seems to favor Kamala Harris and Joe Biden, which again is his right. But among the few things that Biden-Harris kept from the Trump Administration years are much of the Trump Tariffs on China. That should speak volumes to anyone who can look at this important issue objectively.

According to Wiktionary, a fisking is: “A rebuttal to an article or blog made by quoting its content in sections and refuting each section individually.”

With that introduction, and emphasizing my respect for Dobozi and his right to make these claims, let's dive into this evidence-backed section-by-section fisking of his op-ed to the left-leaning Financial Times.

Part I

1)

"Is it time for Con­gress to claim its role in reg­u­lat­ing trade?

FINANCIAL TIMES, October 2, 2024

Your edit­or­ial “Trump’s mir­acle cure for Amer­ica” (FT View, Septem­ber 28) rightly calls out the Repub­lican pres­id­en­tial can­did­ate Don­ald Trump for his tar­iff zeal as a cure-all for Amer­ica’s eco­nomic ail­ments: fix­ing the trade defi­cit, strength­en­ing national secur­ity, redu­cing the fiscal imbal­ance, rais­ing the stand­ard of liv­ing, reju­ven­at­ing US man­u­fac­tur­ing, among other things. It’s way too much to expect from a largely obsol­ete, inef­fect­ive and blunt policy instru­ment."

a) In no particular order of importance on the above (or subsequent fisked sections), consider the following.

b) When you submit an op-ed to a publication, it may be more likely that it gets published if you agree with that publication's editorial. So, Dobozi's opening makes several things plain. Among them is that he, like the Financial Times, is opposed to Trump and his tariffs.

c) The phrase "cure all" is perhaps a Saul Alinsky style tactic meant to mock the deposed 45th President of the United States (POTUS) Donald J. Trump. That noted, consider Dobozi's useful list of potential good that the 45th President Trump's tariff plans hopes to achieve.

• fix­ing the trade defi­cit,
• strength­en­ing national secur­ity,
• redu­cing the fiscal imbal­ance,
• rais­ing the stand­ard of liv­ing,
• reju­ven­at­ing US man­u­fac­tur­ing,
• among other things.

More on those bullets above will follow later.

d) Dobozi said: "to expect from a largely obsol­ete, inef­fect­ive and blunt policy instru­ment."

Which begs the question. Ff it is "largely obsol­ete, inef­fect­ive and blunt policy instru­ment," then why has the Biden-Harris regime retained the Trump tariffs against Communist China? In fact, per left-leaning CNN, they are increasing some tariffs on Chinese imports.

Just based on that evidence alone, it should be apparent that Dobozi and others who think like he does are mistaken about the potential good that can be accomplished with properly used tariffs. But let's press further into his

Back to quoting, then more fact-checking, of Dobozi's op-ed.

2)

"Trump’s tar­iff fet­ish has intens­i­fied. It is driven primar­ily by a nar­row­minded obses­sion with Amer­ica’s mer­chand­ise trade defi­cit and man­u­fac­tur­ing employ­ment. The elim­in­a­tion of the defi­cit via tar­iffs — as high as needed to do the job — has become an over­arch­ing policy goal."

This writer for MHProNews and the Patch contributor noted earlier that Dobozi may be using a Saul Alinsky tactic. Consider this question posed to left-leaning Bing's AI powered Copilot and its reply.

Did Saul Alinsky encourge mocking or smearing his target or opponent as a tool in influencing an audience?

Copilot

Yes, Saul Alinsky did advocate for tactics that included mocking or smearing opponents to influence an audience. In his book “Rules for Radicals,” Alinsky outlined various strategies for community organizers, one of which was to ridicule opponents. He believed that ridicule was a potent weapon because it was difficult to counter and could effectively undermine the credibility of the target 1 2.

Alinsky’s approach was to use humor and public humiliation as tools to create pressure and highlight issues, making it easier to mobilize support and bring about change 2. This tactic is part of his broader strategy to empower marginalized communities by challenging established power structures. ..."

The screen capture below is evidence of the above.

But let's look at the facts. Trump's tariffs and trade deals helped reverse the decline in U.S. manufacturing employment that occurred under both Republicans and Democrats.

According to left-leaning Google's AI powered Gemini, is the following.

"AI Overview

U.S. manufacturing employment has been declining since the 1970s, but the rate of decline has accelerated since 2000:

• Job loss

Between 2000 and 2017, the U.S. lost over 5 million manufacturing jobs, which is more than the 2 million jobs lost between 1980 and 2000.

• Job stabilization

In recent years, manufacturing employment has stabilized at around 12–13 million jobs. ..."

So, employment in manufacturing grew under Trump, reversing years of declines under Obama-Biden (D) and Bush-Cheney (R). What did Trump's policies do on the trade deficit? Let's look.

Per the illustration above that cited the World Trade Organization and the U.S. Census Bureau, note that the bulk of that trade deficit has been to Communist China. Note that as Trump's "drill, baby, drill" policies took hold, the trade deficit on fuels all but vanished, per the above. Note that the trade deficit improved in 2019. Then came COVID19, from where? Apparently, Wuhan-China.

Dobozi's rush to criticize Trump (R) ignored the evidence that the U.S. trade deficit is worse now under Biden-Harris (D).

Back to more quoting, then more fact-checking, of Dobozi's op-ed.

3)

"Unfor­tu­nately Trump fails to under­stand a basic mac­roe­co­nomic prin­ciple: as long as the US invests more than it saves, the trade defi­cit is inev­it­able. (By the same token, excess sav­ings are the primary under­ly­ing driver of China’s per­sist­ent trade sur­pluses.)"

Pardon me? Red-herring anyone? Oxford Languages says that a red herring, in this context, means: "a clue or piece of information that is, or is intended to be, misleading or distracting."

Communist China is a manufacturing producing nation. The U.S. mistakenly began moving away from production some 45 years ago, and has been paying the price ever since. Consider this evidence from left-leaning Wikipedia.

When Western corporate interests began investing in production in Communist China instead of in the U.S. or other Western or allied Asian nations, it paved the way to the far lower level of manufacturing in the U.S. that we have today. That tragic decision to offshore American jobs also meant that we as a Republic began to undermine opportunities for people without a college degree to get a higher paying job.

So, sorry Mr. Dobozi et al, but Trump is right again in pushing for the U.S. to become a self-sustaining manufacturing and domestic energy producing powerhouse. Trump is right in saying that driving down energy prices will help make production in the U.S., as well as all other prices, lower.

Back to more quoting, then more fact-checking, of Dobozi's op-ed.

4)
"However, the national sav­ings rate can be increased by redu­cing Amer­ica’s unsus­tain­able fiscal defi­cit. There is con­sid­er­able empir­ical evid­ence for the exist­ence of an Amer­ican “twin defi­cit”: the fiscal and trade defi­cits mov­ing largely in tan­dem.

Trump’s pro­posed high tar­iffs would be a huge neg­at­ive shock to world trade, prob­ably trig­ger­ing a global trade war, pro­du­cing far more losers than win­ners. Instead of act­ing as a chief dis­rupter in world com­merce, the new pres­id­ent — who­ever is elec­ted — should rees­tab­lish Wash­ing­ton as the global cham­pion of rules-based free and fair trade and a cred­ible leader to fight the rap­idly grow­ing pro­tec­tion­ism world­wide."

In fairness to Dobozi, there is some truth to the above.

But Trump has been clear-eyed in saying that it should be about "Americans First." The U.S. doesn't owe our potentially higher paying jobs to China or anyone else. Democrats used to oppose policies that undermined "American workers." What happened to that common sense position under Obama-Biden (D) and Biden-Harris (D)?

Trump and his running mate Senator J.D. Vance (OH-R) are rebuilding the Republican Party as the party of the working class, the middle class, retirees, and the poor. Who said? Ironically, that is the flip side of the admission of former Democratic presential candidate, Congressman Seth Moulton (MA-D).

https://www.manufacturedhomepr...

Back to more quoting, then more fact-checking, of the wrap up to Dobozi's op-ed.

5)

"Given these risks, and Trump’s demon­strated abuse of tar­iffs as pres­id­ent (applied on phoney national secur­ity grounds, even against close allies), it may be high time for Con­gress to con­sider reclaim­ing its con­sti­tu­tional respons­ib­il­ity under Art­icle 1, Sec­tion 8, to reg­u­late com­merce with for­eign nations.

Istvan Dobozi

Former Lead Eco­nom­ist, World Bank, Sara­sota, FL, US"

Let's ignore the Dobozi typo ("phoney" sic, as I get typos too), and focus on this: "Given these risks, and Trump’s demon­strated abuse of tar­iffs as pres­id­ent." In trying to prove his clearly mistaken points, Dobozi smacked Biden-Harris (D) to some extent too, because they kept-increased Trump-tariffs per CNN and others. See that from CNN in #1 above.

But now in Part II, as promised, let's pivot to the prior list of issues that Dobozi thoughtfully provided.

Part II

1) While the bullets are added for clarity, these items supplied by Dobozi are useful.

• fix­ing the trade defi­cit,
• strength­en­ing national secur­ity,
• redu­cing the fiscal imbal­ance,
• rais­ing the stand­ard of liv­ing,
• reju­ven­at­ing US man­u­fac­tur­ing,
• among other things.

2) The United States operated without an income tax for much of its history. It wasn't until the Woodrow Wilson (D) Administration that the income tax was implemented and tariffs as a positive policy for the U.S. revenue and other purposes was downplayed.

https://www.manufacturedhomepr...

Note that the chart below is per the Biden-Harris (D) era White House website.

When tariffs were the focus of U.S. (federal) tax policy, and before overseas adventurism and the so-called Great Society programs were implemented by Democrats, the U.S. had very little federal debt. The Wilson (D) and Johnson (D) era policies arguably harmed the interests of most working, middle, and retired classes of Americans.

Poverty, for example, is often demonstrably not helped by the very policies that are mistakenly claimed to be helped by the income tax and high federal spending. To Trump's credit, he raised the idea recently of phasing out the income tax by pushing for more tariffs. The charts above and below illustrate that he may have a good point. It looks like a notion that is long overdue. After all, 50 to 100 years of policy failures ought to be plenty of time to see if Democratic plans worked. They didn't.

Note in the graphic above that poverty declined under Trump (R).

You don't have to be an economist to do the research needed to disprove the notion that Dobozi and often Democratic (or Establishment Republican vs. MAGA and America First Republicans) advocates for tax and spending policies have for so long advocated. The population ought to look at this history, and that of the Obama-Biden (D), Biden-Harris (D) and Trump (R) era to see that Trump's policies worked.

https://www.manufacturedhomepr...

Last points for today. Paying billions of dollars to countries like Communist China also drives up our defense costs. It makes no sense to ship American dollars into the hands of would-be enemies in various parts of the world. To Dobozi's point about Congress, well sir, Congress must approve trade agreements and tax policies. Presidents can lead, but Congress must approve.

Tariffs can work. They worked for generations. With the Trump-Vance team back at the helm in the White House, it would be a safe bet that Mr. Dobozi and others like him will once again be proven mistaken. Let me note there are areas I disagree with Mr. Trump, for example, his pivot away from pro-life issues. But as Dan Bongino has said, Trump is "transactional." There is little doubt that Trump-Vance (R) will be more pro-life than Harris-Walz (D). See the linked and related reports that follow to learn more about these and related issues. I'd welcome a point-by-point response to the above by Mr. Dobozi. ##

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L. A. “Tony” Kovach and his family live in a manufactured home on private property in Winter Haven, FL. He is the co-founder of ManufacturedHomeLivingNews.com and
ManufacturedHomeProNews.com, trade publications serving segments of the manufactured home industry. Having worked in several segments of the manufactured home industry for over 3 decades, Kovach is a widely acknowledged and often praised expert on manufactured housing.