Moreover, "it's not current inflation that matters, it's expectations of higher future inflation, added Douglas Holtz-Eakin, a Republican economist who formerly headed the Congressional Budget Office. Economic analysts agree that fiscal stimulus from tax cuts and higher, deficit-financed government spending will increase inflationary pressures.
That's why the Fed has signaled the possibility of three more interest rate hikes this year. "I was a little puzzled," Navarro complained; he sees "moderating inflationary pressures due to productivity growth and supply-side factors."
Navarro described the economy as "hitting on all cylinders because of President Trump's economic policies." Specifically, he cited rising investment spurred by tax cuts.
"Where's the extra investment? Not in the data," wondered Jared Bernstein, an opponent of the tax cuts at the Center on Budget and Policy Priorities. Holtz-Eakin, a tax-cut backer, agreed "the evidence of success is just not in."
Former Obama economic adviser Jason Furman cited government statistics showing overall business investment has risen only in one sector: oil. That, he said, is mostly due to rising prices.
Navarro further argued that Trump's get-tough policies will reduce the trade deficit, attract foreign investment and create jobs. On this point, fellow economists are withering.
"It's ludicrous," said former Obama adviser Austan Goolsbee.
"We are near full employment — what jobs?" asked Holtz-Eakin.
"He seems to misunderstand basic national accounting," added Kyle Pomerleau of the conservative Tax Foundation. Like foreign financing of U.S. budget deficits, foreign investment is itself effectively an import; attracting more of both makes the trade deficit go up.
So does increasing the purchasing power of U.S. consumers who buy products made overseas. In the strong 2017 economy that Trump loves to boast about, the U.S. trade deficit reached its highest level since 2008.
Reiterating Trump's vow to scrap the North American Free Trade Agreement unless Canada and Mexico give better terms, Navarro mocked promises of growth and jobs before its enactment.
"What we got," he concluded, "was hell for American workers and hell for the American manufacturers."
That line works better among voters at political rallies than among economists.
"The evidence is that NAFTA clearly increased jobs and GDP," said Kent Smetters, a former economist for President George W. Bush who now teaches at the Wharton School. In the five years under NAFTA, noted Princeton economist and ex-Obama adviser Alan Krueger, the economy boomed and income inequality declined.
Calling the trade crackdown evidence that Trump "has the back of American businesses and workers," Navarro dismissed the risk of escalation. "I don't think this is going to be action/response, action/response," he said.
Yet China and the European Union have responded, as the Trump administration prepares to specify further tariffs. Corporate executives and investors have both made clear they don't want Trump to have their back this way.
"When Trump takes an economic punch at China and the rest of the world, he simply invites a punch back," Zandi said. A Wharton analysis, Smetters noted, showed that a trade war "would more than eliminate any potential benefits from the tax cut."
As it happens, financial markets on Tuesday took Navarro's recommendation to relax. The Dow Jones industrial average reversed most of Monday's decline.
But Navarro's economist colleagues don't see affirmation for his advice to Trump on, say, the interactions between tax cuts, tariffs, and trade deficits.
"99.999999% of economists agree," Furman said. "The rest are Peter Navarro."
