Even if President Trump’s industrial-policy-by-Twitter-post fails over the long run to create jobs or prevent companies from moving offshore, there’s a good chance that it will appear, at first, to be a success.
But this is a dangerous illusion, the result of companies responding strategically to the new president’s threats. And it could lead to more bad policy if voters or policy makers draw the wrong conclusions.
That’s why it’s important to understand precisely how these new policies are likely to shape the numbers over the next few years. Some simple economics can help.
