Harvard Men

A bastion of privilege, power and positivism, Harvard cultivates a pernicious weed: the person who believes he can use his brain to know what others should do and use the government to make them do it

Harvard University, Cambridge Massachusetts

Tuesday, April 8^th, 2025

Bill Bonner, writing from Youghal, Ireland

“In every disaster throughout American history, there always seems to be a man from Harvard in the middle of it.”

—Thomas Sowell

Pete Navarro is in the news. He is believed to be the ‘architect’ of Trump’s tariff policies. Fox:

White House trade advisor Peter Navarro said Monday that an offer by Vietnam to eliminate tariffs on U.S. imports would not be enough for the administration to lift its new levies announced last week. "Let's take Vietnam. When they come to us and say 'we'll go to zero tariffs,' that means nothing to us because it's the nontariff cheating that matters," Navarro said on CNBC's "Squawk Box."

Say what?

Even with zero tariffs Vietnam would still be subject to ‘reciprocal’ charges from the US? How could Vietnam eliminate the ‘non-tariff barriers?’ Make sure its currency doesn’t go down against the dollar? Change its tax policies so they do not encourage exporting?

Would it have to give up what Adam Smith called it’s ‘comparative advantage’ – cheap labor -- and raise wages to the US unionized standard, with all America’s labor protections, over-time pay, holidays, and pensions?

Will oil rich nations have to compensate for having cheap energy? Cold nations will have to pay a penalty for not needed A/C? Will warm ones need to apologize for their bananas?

White House experts don’t actually analyze any of those things. They just look at trade volumes. So, the only way they will know if Vietnam is not ‘cheating’ is if the balance of trade is even. By this formula the US was a cheater from 1875 to 1971….it ran trade surpluses in all those years. It had a very efficient, advanced economy. Should it have been punished for that?

It was only after Nixon changed the world’s money system that the deficits began…and never ended. The new ‘fake’ dollar -- that the US can effectively ‘print’ at will – is the cause of America’s chronic trade deficits, not NTBs. The real story: after 1971, the US could buy what it needed with its inexhaustible new money; it didn’t need to compete.

Navarro is said to have a Ph.D in economics from Harvard. This makes us very suspicious of Harvard’s standards. But Harvard has figured prominently in US history…and, usually, disastrously.

In theory, the role of a Harvard education – we get this first-hand from sharing our marriage bed with a Harvard grad for the last 41 years – is to discipline the mind so it thinks with rigorous logic, and furnish it with enough literature, history and science to give it something to think about.

How then does a man like Pete Navarro end up with a Ph.D. from that august institution? Perhaps its standards have slipped?

A bastion of privilege, power and positivism, Harvard cultivates a pernicious weed – the person who believes he can use his brain to know what others should do…and use the government to make them do it. Sprouting from seed in Cambridge, the weed spreads…and soon has covered the ground all the way to the Potomac.

Trump was looking for an economic advisor. His son-in-law reportedly found Navarro’s book (perhaps then on the remainder table, along with our forgotten classic “Empire of Debt”).

In ‘Death by China’ the author frequently quotes another Harvard guy, Ron Vara. The only problem is that there is no Ron Vara. He is Navarro’s made-up alter-ego. In effect, the ‘Death by China’ theme is supported by two Harvard men – one fictional, both delusional.

And now word on the street is that Ron Vara is butting heads with Elon Musk. Here’s Politico:

In the early hours of Saturday morning, Musk took to his social media platform X to launch an apparent attack at the president’s senior trade counselor, taking jabs at Navarro under a video in which he explained the Trump administration’s logic in levying tariffs during a CNN appearance. The Department of Government Efficiency head replied to another user’s comment on the video lauding Navarro’s explanation, writing of the economist: “He ain’t built shit.”

Then, Elon’s brother joined the scuffle. Business Insider:

Kimbal Musk, the younger brother of Elon Musk, said on Monday that President Donald Trump's slate of reciprocal tariffs would be like imposing a "permanent tax" on US consumers.

The Musk team and the Trump/Navarro Team are not on the Same Team. Musk represents real economic interests…Trump is politics incarnate.

Tariffs are a political move…part demagoguery, part cupidity. They make politicians more powerful as they get to choose who pays what to whom. And they make a few insiders richer as they favor some industries over others. But ultimately, they weaken the economy and make everyone else poorer.

Eventually, the two teams are going to come to blows. And maybe sooner than later. Newsweek:

Musk's open criticism of White House policy is the first time that the relationship between himself and Trump has appeared to be strained.

Musk:

“A PhD in Econ from Harvard is a bad thing, not a good thing. Results in the ego/brains>>1 problem.”

More to come…

Bill Bonner

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Market Note, by Dan Denning

What a time to be alive!

The huge intraday swing in the S&P 500 was prompted by a mid-day rumor, first circulated on X then amplified by Carl Quintanilla on CNBC, that President Trump would call for a 90-day pause on tariffs. The White House responded, saying the rumor was ‘fake news.’ But by then, traders had run with it. The index closed down just 0.23% for the day, not the Black Monday everyone expected and feared.

Where to from here? Is it market internals and liquidity? Or is it big picture moves the post-war neoliberal global economic order?

Having lived and traded through the dot.com bubble and the 2008 crash, the good thing about today is that it’s not like those bear markets/crashes. That is, it does not seem to be concentrated in one sector (tech/banking). And for now, margin calls and liquidation are being driven by over-leveraged traders, not systemically important banks on the verge of collapse (the bad news is that the bubble is in everything, everywhere you look).

We’re keeping our eyes on China’s managed exchange rate, Treasury bonds, and gold. If China wants to take the tariff war to the next level to maintain global market share, they’ll dump Treasuries, devalue the Yuan, and buy gold. No sign of that yet. The other alternative is that Trump–for better or for worse–has broken the global trading system for good and something else (more chaos) is coming. Whether that’s better or worse for Americans…remains to be seen.