Former Federal Reserve Chairman Alan Greenspan says that the populism of Donald Trump is a “shout of pain” from ordinary Americans, but he believes that Trump’s policies won’t help the lives of those calling out. While speaking with the BBC, Greenspan said that people like what Trump is saying, but that his actions are actually doing more harm than good for the average person, comparing the president’s leadership to the populist leaders in Latin America during the late 19th and early 20th centuries.
“We have one major so-called leader saying ‘I feel your pain and I am here to help you’,” he told BBC Radio 4 Today. “People like the sound of it but the facts are he is lowering the standard of living of the average American.”
The economist also called Trump’s tariffs against things made in China like steel “insane.” It’s not the first time Greenspan has criticized the tariffs. Earlier this month, he told Bloomberg that both sides lose in a battle like the one the president is waging.
“There are victors and there are losers in a tariff fight,” Greenspan said. “But that doesn’t say that a more important issue is both are losing, it’s just the winner loses less.”
Echoing those words, he told the BBC on Monday that tariffs are basically a tax on both sides of the trade war.
“You add excise tax and suffer accordingly – but if your suffering is less than your opponent’s then you have won the war,” he said.
Greenspan also weighed in on the Brexit debate, saying that leaving the European Union will harm the average UK citizen.
“Let’s remember the purpose of the EU is to get the division of labor so structured that you maximize the value-added of the production of the society,” he said. “And to the extent that you impair that, which is what a tariff does, you lower the standard of living in England.”
Greenspan has been criticized in the past for not doing enough to rein in the excesses that led to the Great Recession. He did, however, deny that the free market ideology that he champions caused the crisis. In the past, he has admitted that his free-market beliefs may have pushed him to make decisions that he regrets now. Still, he says that turning to someone who pushes policies like Trump’s isn’t the answer, either.
“They can promise to protect people from the market but we should remember the rate of increase in productivity in both the UK and the US is going down.”
Earlier this month, the economist said that he believes that we are beginning to see the first signs of inflation in the US.
“We’re seeing it basically in the tightening of the labor markets first, which, as you know, have gotten very tight now. We’re beginning finally to see average wages rise, and clearly there’s no productivity behind it,” Greenspan said