Finding scapegoats

Daily update

Scapegoat economics creates a story that incorrectly blames a group for everything that is going wrong. Prejudice politics promises to reduce that group’s influence. Because scapegoats are not the problem, new scapegoats continually need to be found when prejudice fails to solve the problems.
US President Trump created a new scapegoat yesterday. Announcing a 50% tax on copper has dramatic effect (50% sounds impressive), but directly such a tax adds about 0.03 percentage points to consumer price inflation. Very simplistically, because the US imports about half its copper, US prices should settle 20-25% above global prices. Less would signal expectations of another Trump retreat.
Threatening a future 200% tax on pharmaceutical imports creates another scapegoat. The US has one of the highest cost healthcare systems delivering one of the lowest life expectancies in the developed world, so tariff retreats are expected. The erratic policy announcements still generate risk, and the general process suggests new scapegoats will be targeted in the future.
Trump is expected to announce more US consumer taxes today. The minutes of the last Federal Reserve meeting are likely to articulate a collective shrug of the shoulders. ECB Chief Economist Lane is speaking—any currency-related comments might ignite a flicker of interest.