Trump officials are 'flacks' who don’t know 'markets': ex-White House aide

President Donald Trump’s senior counselor for trade and manufacturing has shown that he does not “understand markets” and his spokespeople have shown they are “flacks" when they defend advisers by praising their loyalty, according to one of President Bill Clinton’s top economic advisers.

“Loyalty to Donald Trump is not a credential of economic insight or knowledge,” Dr. Robert J. Shapiro told AlterNet on Friday. Shapiro was responding to a Wall Street Journal editorial from Thursday by Dr. Peter Navarro. In that piece Navarro — often described as one of the chief architects of Trump’s tariff policies — claimed Iran “has imposed a hidden tax” on the global economy by limiting their growth and raising prices, and therefore oil prices will drop once the US invasion leads to the collapse of Iran’s religiously extreme regime.

“The burden of the Iran Terror Premium rarely appears as a dramatic economic shock,” Navarro asserted. “Instead, it behaves more like a parasite on the global economy — quietly draining growth through slightly higher fuel prices, transportation costs and production expenses year after year.”

Adding that “the economic logic is clear,” Navarro asserted at the close of his piece that “if the geopolitical risk associated with Iran were reduced, oil prices would fall toward their underlying supply-and-demand equilibrium. Market evidence suggests equilibrium prices could be well below $60 a barrel.”

“What Navarro said kind of demonstrates that he doesn't understand markets,” Shapiro told AlterNet. “If there is a risk premium, it's only for oil futures — not for the price of oil today, not for the spot price — and then only when the risk is imminent. And so the price of oil rose by $10 in the runup to the launch of the war on Iran, which shows that it's not baked in.” Laughing, Shapiro added “these are commodities that are bought, sold and traded every day. They have a daily price, and the price reflects the supply and demand that day — and indeed in the morning, midday, afternoon or evening. So the notion that it was already built in is also clearly refuted by the fact that the price rose."

Shapiro was asked about White House spokesman Kush Desai, who sent a statement to AlterNet in response to its coverage of Navarro’s editorial. The coverage included criticisms of Navarro’s argument by two economists.

"These ‘economists’ are idiots,” Desai told AlterNet. “Peter Navarro is an American Patriot whose loyalty to the President and the American people is unimpeachable.”

After criticizing Desai for citing Navarro's loyalty to defend his policies, Shapiro added that "[Desai's] response did everything except address the substance of the people who critiqued him. The guy totally avoided that. He just made an ad hominem attack — [and] in this case, hollow praise for Navarro. I stopped taking their 'American people' narrative seriously a long time ago."

Shapiro also told AlterNet that Trump’s White House spokespeople are "flacks" for openly insulting the president’s critics with words like "idiot," characterizing such behavior as showing a “not serious” attitude toward the job.

Ed Gresser, Vice President and Director for Trade and Global Markets at the Progressive Policy Institute, characterized Navarro’s argument as “not correct" in the article to which Desai was replying.

“The price of oil has gone up, not down, since this started, from about $65/barrel to $95/barrel,” Gresser told AlterNet. “The long-term hypothesis he puts out is that at the end of this, there will be a calm and stable environment in the Persian Gulf which reduces uncertainty risks and reduces prices. Obviously there are lots of possible outcomes, with this sort of 'best-case scenario' among them, but the best-case scenario hasn't typically been the result of previous wars in the Middle East.”

He also argued, based on data from Harvard Business School, that the tariffs are causing roughly “a 7 percent increase in prices of imported consumer goods subject to tariffs, and a 4 percent increase in prices of similar domestically produced goods. A lot of the impact appears to have fallen on businesses, though — in both consumer and industrial sectors they seem to have been trying pretty hard to limit price increases. So instead they have tried to save money by reducing hiring, and new job creation has dropped very sharply since 2024.”

Dr. Richard Wolff, an economist emeritus at the University of Massachusetts Amherst, told AlterNet in the same Thursday article that Navarro’s editorial is “bought and paid for economic analysis.”

He added, “Mr. Navarro's analysis depends entirely on linking rising oil prices to geopolitical and military risks.” He then asked a number of questions that the White House did not answer in its reply.

“How does [Navarro] know and measure that?” Wolff asked about the link between oil prices and geopolitical and military risks. “Why must he ask the oil company CEOs why they raise oil prices? Will they answer ‘to get more profits’?”

Wolff predicted oil companies “will point to risks they must take account of” and said “believing such answers is naive at best and corrupt at worst. Claiming risk is a corporate ploy — as is making analyses based on such claims.” He also pointed out that “no word in [Navarro’s] article deals with competition among oil companies and what role it plays in price movements.”

He ultimately asserted, “The point of this article is to justify US military aggression against Iran by scapegoating Iran controls over oil. Iran is only one of several significant oil exporters shaping the global price. The US has a bigger share of total exports than Iran. Blaming Iran for the whole oil market is nuts.”

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