Kudlow, Navarro, Uh Oh: Trump’s First False Move

The Trump rally stalled last week with the climax of good news from the transition team: reports that Kudlow might lead the Councill of Economic Advisors. Such a choice would signal Trump’s commitment to intellectual integrity in economic policy, but nothing more has come of it. Instead yesterday Trump announced the creation of a new “White House National Trade Council” and the selection of Peter Navarro as “Assistant to the President” and “Director of Trade and Industrial Policy.” He is a virulent and reckless China basher, who bends economic theory to oppose global trade as a deadweight loss to output. After a winning run, he is Trump’s first bad – downright dangerous – appointment. With this, markets will likely have to pause while they wait for better signals about Trump’s policy intentions.