In pursuit of economic understanding, we speak with Jason Furman, the Harvard economist who co-teaches the university’s core course in the discipline, “Principles of Economics,” Harvard’s most popular course.

The conversation tackles President Donald Trump's "Liberation Day" tariff announcement that sent markets nosediving, that is, until the president hit the pause button. The Harvard economist methodically dismantles the logic behind targeting countries with bilateral trade deficits, using unexpected examples like Madagascar’s vanilla bean exports and Lesotho's diamond exports to illustrate why the approach is fundamentally flawed. "We could eliminate our trade deficits with them," he explains, "and what would that mean? That would mean less vanilla beans and fewer diamonds."
Our wide-ranging discussion touched on Trump’s big, beautiful budget bill and Moody’s downgrade of its U.S. debt rating while, along the way, exploring the linkages between global trade, clean energy, and artificial intelligence. Jason, an economic adviser to President Barack Obama, offers a refreshingly clear-eyed assessment of both the Trump and Biden administration approaches to trade and manufacturing. Despite their different methods (tariffs versus subsidies), both administrations share a nostalgic vision of American manufacturing that doesn't align with today's economic reality.

Listeners are reminded of our guest's Foreign Affairs magazine article "The Post-Neoliberal Delusion" that critiqued Biden's signature economic legislation (see link below). Looking forward, his greatest economic worry is that "the tariffs come back with a vengeance," while his greatest hope lies in the potential of artificial intelligence to "raise productivity growth, raise wages, help with our deficit problems" if implemented thoughtfully.

Speakers:

J. Alex Tarquinio (host) is a resident correspondent at the United Nations in New York and co-founder of The Delegates Lounge podcast. @alextarquinio of @delegateslounge on X.

Jason Furman (guest) is the Aetna Professor of the Practice of Economic Policy jointly at Harvard Kennedy School and the Department of Economics at Harvard University. He is also nonresident senior fellow at the Peterson Institute for International Economics and a past U.S. presidential adviser. @jasonfurman of @Harvard and @PIIE on X.

References:

We mention a recent article by the guest in Foreign Affairs magazine so we’re providing the link below.

https://www.foreignaffairs.com/united-states/post-neoliberal-delusion