Stephen Miran Riding High On Record Tariff Revenue

Trump appoints his favorite economist to Fed board of governors

President Donald Trump has appointed the architect of his tariff policy to the Federal Reserve board of governors, replacing Adriana Kugler, who unexpectedly stepped down last week. Stephen Miran is a critic of Fed chairman Jerome Powell, who has refused to cut interest rates for fear of incoming inflation.

“Miran has been effusive in his praise for President Trump’s economic policies, insisting in interviews and research papers that Trump’s tariffs will not cause a meaningful rise in consumer prices,” The New York Times reports. “Concern over possible inflation is one of the reasons the Fed has not cut interest rates.”

Before he was appointed, Miran appeared on Fox News and Bloomberg on Thursday morning to announce that tariff income will contribute $ trillion to the federal coffers in the next decade. He noted there has been “almost no retaliation” from other countries in the form of tariff wars. Miran argued that tariffs are not inflationary, creating a one-time change in prices instead, like a value-added tax (VAT) hike in a European nation.

Miran played a bit of politics here, promoting a different person at the Fed for the same board position with high praise. He also added that Trump’s border policies are “disinflationary.” While true, saying so is an opportunity to use Trump’s name in his press appearance, which will please Trump.

Miran also mentions Treasury Secretary Scott Bessent, his closest ally in the adminstration, who has “no doubt” that the countries targeted by tariffs “will bear the burden of the tariffs.” While this creates some price volatility, it does not produce inflation, Bessent says.

Miran is not a partisan agent. As far as I can discern, his entire ideology fits on a spreadsheet. He developed a theory of tariff revenue that appeals to Trump, who is also not an ideological agent at all. Bessent, who famously helped break up the Bank of England, is a capitalist, but he has never been ideological, let alone ‘right wing’. As a married gay man, he is clearly not a committed evangelical conservative.

Money, and money alone, animates these transactional men. A trade negotiation with a new baseline tariff rate is the only discursive formula they seek. No soft science goes into their praxis, only the dismal science of dollars and sense. It is possible to argue that they are wrong and will fail. But if they are right, and exceed the low expectations set by their enemies, what then?

In a post for premium subscribers this week, I laid out the predictions of the Miran-Bessent model of tariffs, as well as their place in the larger framework of Trump’s desire for a trade-based world security order that enriches American taxpayers (the ‘Mar-a-Lago System’). It now appears that Donald Trump will wield the policy tools of the Fed in conjunction with his trade and tariff policy in hopes of stimulating an economic boom to go with his revenue surplus.

As an American, I have to hope that it works. I do not know that it will, and there are risks involved that remain unresolved. Whether it works or not, though, Trump’s doctrine deserves to be understood on its own terms, and then judged for its real results.