Yahoo Finance Senior Columnist Rick Newman joins Market Domination Overtime with Yahoo Finance Head of News Myles Udland, RSM chief economist Joe Brusuelas, and Epistrophy Capital Research chief market strategist and host of "The Drill Down" podcast Cory Johnson to make the case that Trump's tariffs constitute malpractice in the president's own metaphor that the US economy is the patient.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Right, if a surgeon operates needlessly on a patient, it's medical malpractice. So if a policy maker destroys value, endangers livelihoods and lowers living standards is that economic malpractice? Joining us now to make the case is Yahoo finances, Rick Newman, Rick.
It's economic malpractice on an unprecedented scale. Would like to say hello to Joe Barcelos there. How are you doing, man?
Hey Rick, good to see you.
This is this, so what President Trump said yesterday using this medical metaphor is one of the most idiotic and regrettable things that any president will ever say in American history. Just to remind people who might have missed it. Trump said referring to his tariffs, "The operation is over, the patient lived and is healing. The patient will be far stronger, better and more resilient than ever before." This is complete nonsense. So just to break this down, number one Trump says, the patient, the US economy was sick and in need of surgery. That is false. The US economy was doing well before Trump took office. Now it now it actually is sick because of Trump and the patient is not doing well. The patient is hemorrhaging. That is what is happening in markets and markets are only foretelling what is going to happen in the real economy. There is only one person in the world who doesn't realize what a disaster this is and that is Donald Trump. There might be a second person I, you could finger which is Peter Navarro, his trade advisor, and as you guys were discussing before, who might be the fall guy for this? If there's anybody I think it might be Peter Navarro uh who already went to prison once on Donald Trump's behalf and might uh take the pain again. We can only hope that that is what Trump does, that he finds a scapegoat and says this was all somebody else's idea. I'm calling the whole thing off because if he doesn't, as Joe and basically every other economist in the world knows, this is a nightmare.
Rick uh you uh made the case of what the president, how the president has messed up, but he has made the case that we've been being ripped off by the terrorist. Other countries have been charging us uh and uh I don't know if you've made the case that every country out there that we are now charging terrorists too that the American consumers will be paying for, have been ripping us off. But isn't it the case that some countries have been ripping us off?
I don't think so. Um I think some countries have been cheating on trade. I mean I think there are are a lot of people who would say yes, China cheats on trade uh it uses a government run economy to subsidize the big uh state-owned enterprises and other things like that. Yes, we we do have a problem with people and communities that used to rely on uh good paying manufacturing jobs that aren't there. But blowing up the whole economy is not the solution. Uh you know, to go back to the to the medical metaphor. Uh you don't, you don't operate on the entire body from head to toe to put, fix a pimple or something. I mean, address the problem in a targeted way and there are tons of ideas for how to address these problems in targeted ways. There are ways to crack down on Chinese cheating, other countries do it as well, um it's too too complicated to get into in one segment but to do you know there are many ways you can do that. Uh the places that we need better paying jobs for people in America who do not have college educations, there are also many ways to address that problem. We need more trades people. That is not assembly line workers making socks that we don't want to pay for in America. It is people, it's plumbers and welders that we need to do jobs that are good paying jobs. Many companies need skilled workers that they can't get enough of and they're trying to line up with local government and state governments and say here are the types of workers we need, can we get these people in the in the in the pipeline to get these skills? All these types of things. Do that kind of stuff. Why make everybody 25 or 30% poorer in order to bring back to bring back 100,000 auto maker jobs? This is this is insane.
All right, so the late great Herb Stein used to tell us that if something bad goes on long enough, it usually comes to an end.
How do we get out of this, Rick? What's what's what's the way forward?
Well Joe, I mean you would be the one who could put numbers on this. Um if Trump were to reverse this quickly, we could get out of it without too much damage, but the longer this, these, these tariffs stay in effect, um the more this damage becomes irreversible. I mean you know to go back to the metaphor. Trump is not going to kill the patient, he can't kill the whole US economy. Um thank god. I mean the US economy will survive all of this in some form. Uh but we're going to survive with less. Well, I mean this is demand destruction and value destruction. You you don't just automatically get it back if it stays in place long enough. So um I don't know. I mean this this is a real test of um how responsive the political system actually can be when you when you have a man-made crisis on your hands, and much of this is unprecedented. I mean, Trump has figured out that um he has he doesn't have to answer to anybody on tariffs. He he he doesn't, he knows that he doesn't have to run for re-election unless he tries to, so he doesn't have to answer to voters in that way. So um we are in a predicament here uh and this all comes down to how hard headed is Trump actually going to be.