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One of the issues with tariffs that tends to get underplayed is that domestic firms will tend to raise their prices if foreign competitors get hit by tariffs.

So: imagine that there are currently two suppliers of widgets, each costing $5.00, and one is domestic and the other foreign.

Tariffs put $2 on the price of imported widgets, and so people might thing the domestic producer would now sell twice as many widgets for $5.

What actually happens is that the domestic producer raises their price to $6.99, and -price elasticity being what it is- sells 1.5x as many widgets, but at 40% more per widget.

That is profit maximizing behaviour for the widget manufacturer but shows up in higher prices for everyone.

True, but the other reason for domestic inflation is Trumps budget deficit. This injects money into the economy increasind demand.

Sure like Wylie Coyote can run in the air for a bit, the plummet is inevitable.

Good morning, everyone.

I see Trump remains less than delighted with the BBC.

To be fair he does have a point about the defamation, although IIRC the programme in question was never broadcast in the US and he’s not going to get a billion-dollar settlement from a UK court.

More likely he wants to waste BBC management time and make them hire a bunch of lawyers to defend themselves or apologise in court.

His comments on the BBC somewhat overshadowed by those on Rob Reiner, which were harsh even by his low standards of speaking about opponents. One should not speak ill of the dead, especially not given the circumstances, as many of his supporters and GOP politicians have made clear.

That post is wrong in so many ways…

He doesn’t have a point on defamation - the editing was poor and arguably misleading but it didn’t come up with anything that hundreds of others haven’t accused him of.

He’s out of time in the UK and the US courts (as you note) don’t have standing.

It’s just simply an attempted shakedown and fully credit to the BBC for standing up to him

The BBC editing would pretty easily win a defamation suit in the UK, and probably meat the “actual malice” standard of defamation of a public figure in the US.

It was a pretty egregious example of a total failure to uphold journalistic standards, and has severely damaged the BBC’s reputation especially in the US. You simply can’t edit someone’s words to make them say exactly the opposite of what they actually said.

What he wants, and will probably get, is an apology and a donation to his library or ballroom.

Please provide evidence for your assertion to it would “pretty easily” win a defamation case. It took actual words that he said - the error was not to include the blank screen that they usually do. So it was misleading but plenty of people have accused him of attempting to incite a riot.

And just to be clear: it wasn’t the “absolute opposite” of what he said.

In the UK you need to prove damage to reputation, in the US you need to prove it was malicious to boot.

It was poor journalism and an error. That deserves an apology but not monetary compensation.

Sandpit's crush on Trump continues to blossom

Don’t worry, I’m happy to critisise his comments on Rob Reiner, as well as a fair amount of his comments regarding Ukraine.

The problem, as with so much commentary on Trump, is that people start from their conclusion and work backwards, which is really dangerous.

The BBC-think is “Well of course he incited a riot, so let’s just edit his speech to make that absolutely clear”. That’s not journalism, that’s propaganda.

One of the issues with tariffs that tends to get underplayed is that domestic firms will tend to raise their prices if foreign competitors get hit by tariffs.

So: imagine that there are currently two suppliers of widgets, each costing $5.00, and one is domestic and the other foreign.

Tariffs put $2 on the price of imported widgets, and so people might thing the domestic producer would now sell twice as many widgets for $5.

What actually happens is that the domestic producer raises their price to $6.99, and -price elasticity being what it is- sells 1.5x as many widgets, but at 40% more per widget.

That is profit maximizing behaviour for the widget manufacturer but shows up in higher prices for everyone.

But in Trump fantasy world the foreign manufacturer of widgets absorbs the $2 so the American taxpayer gains but the American consumer doesn't even notice. Don't think that fantasy is enjoying contact with reality (am I back on the Bonnie Blue thread?)

The BMA could have delayed the strike action to January . Refusing to do this will turn even more of the public against them .

I was fully supportive of their strikes before they received the pay award when Labour came into office now I’m totally disgusted with their actions.

I think the history of the BMA shows they really are not interested in what is best for healthcare, no matter how much they might pretend. I am reminded that in 2008 they voted against increasing the number of places for doctors at medical school because they didn't want an overproduction of doctors that might limit career opportunities. They have also recently voted against increasing online bookings and consultations for GPs.

To be fair, they are a union and their only job is to defend the interests of their members, not those of the public. Like the train drivers’ union I both deplore their actions and wish my union was as effective at getting me sweeties.

Worth a read, the Economist leader, for those of you able to access Economist articles (limited monthly access or £):

https://www.economist.com/leaders/2025/12/11/can-anyone-stop-europes-populist-right

The doctrines of the populist right do indeed contain much to condemn. Yet talking about them in apocalyptic terms is doomed to fail. For their own sake, and for the good of their countries, mainstream politicians and their supporters urgently need a different approach.

If demonisation is failing, what is the alternative? The answer starts with that impatience for change which the populist right harnesses so successfully—and which this newspaper shares.

For Britain, France and Germany, European economic integration is the most obvious source of growth. Yet the populists are set on a collision course with the European Union, which would lead to growth-destroying degradation of the single market. On other issues, populists latch onto discontent, but propose solutions that are foolish.

If mainstream politicians spend it shrilly demonising populists, they will doubtless make themselves feel better, but they will not help their countries. They would be wiser to subject governments-in-waiting to the democratic scrutiny they deserve.

The Economist is completely wrong - European economic integration might do a tiny bit to boost economic growth, but it be lost in the noise, especially for this country. It would inevitably focus on manufactured goods, which are not where we have a comparative advantage, because liberalising services is much more difficult, both practically and politically, and services are less likely to be traded. Trade with the EU is a relatively small part of our economy - exports to the EU are only about 13% of GDP. And liberalising trade with the EU comes with all sorts of constraints on sovereignty, which are exactly what made Brexit more than a fringe movement in the first place, and was perhaps the second biggest factor, after immigration, in the rise of UKIP/Reform.

The most obvious way to boost growth is to focus on competitiveness throughout the economy - deregulating product and labour markets, getting malingerers off welfare and reducing the size of the public sector. Just cutting size of the state by 3% of GDP, reversing the planned increases since Labour took power, should increase GDP by 2-3% over the long run, more if it's done in a pro-growth way, and much more than any realistic boost from closer ties with the EU, whatever the more absurd studies say.

By "completely wrong" I think you mean "doesn't agree with my priors".

Mind you, we are all guilty of that.

If trade within the EU is so awesome, how come their growth is not rocketing?

It might help, but it’s not a panacea for the U.K.

Fishing reckons a possible 3% improvement in GDP through efficiency savings. This compares with the consensus by economists that leaving the EU has had a 6% to 8% hit to GDP so far due to loss of trade, investment and productivity. They aren't either/or. You can reduce welfare and stay in your most important market.

There is no such consensus in terms of the economic cost of leaving the EU - I have seen numbers from a 2% improvement to a 10-12% drop,, and even if there were it wouldn't make any sense (not for the first time in a consensus of economists).

Any economic cost to us from leaving the EU must be primarily because of reduced exports to the EU, or secondarily because of reduced investment associated with such exports. Any other effects are almost certain to be trivial Exports to the EU accounted for 12% or so of our GDP when we left the EU. To reduce our GDP by 6-8% directly would have meant that we had lost one half to two thirds of those exports. In fact, our exports to the EU have grown slightly since we left. Even allowing for multiplier effects, the idea that our GDP has been reduced sufficiently by leaving the EU is ridiculous.

One could, of course, argue that our exports to the EU and therefore our GDP would have shot up had we remained in the EU, and that is sort of the implication of the NBER and LSE research, though they are wise enough not to state that explicitly. But that doesn't really make sense either, because exports to a block are largely determined by its GDP growth, and the EU's GDP growth over the past decade has been dismal. So it is inconceivable that our exports would have increased by enough to account for anything like a 6-8% drop in GDP.

So the more extreme estimates for the economic cost of leaving the EU have no basis in reality.

My own estimate, derived with colleagues, is about 0.5-1.5% of GDP, mostly from delayed investment due to the delay in leaving the EU. But then you need to offset other factors such as the end of our huge net contributions to the EU and our ability to determine our own regulations and trade agreements. So overall it probably hasn't made much difference, certainly compared to the astonishing incoherence and incompetence of the current government's economic policies.

Ah, another sighting of schrodingers economy which is similtaneously booming because of Brexit and crippled by this government continuing the economic policies of the last government.

If you are going to comment on posts, it does behoove you slightly to read them. Nowhere did I or anyone else say that the economy is booming because of Brexit. If you bother to read what I wrote, you'll see I said that it hasn't made much difference. Nor did anyone say that the current government is continuing the policies of the last government.

As usual, you are simply making up stuff you want other people to have said, regardless of what they did say. Just as you said the other day that Putin was cock-a-hoop over Brexit, without producing the slightest bit of evidence, and indeed the only quote of his I could find from the time showed that he was pretty indifferent.

Also, just for the record, your post doesn't address a single one of the points I actually made, as opposed to those strawmen you made up.