Top Economists Spar Over Trump as Tighter Race Sinks U.S. Stocks

(Bloomberg) -- A group of 370 economists released a letter on Tuesday explaining why electing Republican presidential candidate Donald Trump would be a mistake, a statement that was quickly denounced by a top adviser as out of touch with the reality of job losses caused by “bad trade deals.”

The anti-Trump letter, first reported by the Wall Street Journal, said the candidate "has misled the electorate" and "promotes magical thinking and conspiracy theories over sober assessments of feasible economic policy options."

In a response to the comments, Trump economic adviser and University of California at Irvine economist Peter Navarro said the letter was "an embarrassment to the corporate offshoring wing of the economist profession" and added that Trump’s economic plan would boost growth.

The back-and-forth came on a day when stocks fell and gold rose after a poll showed Trump pulling ahead of Democrat Hillary Clinton a week before the Nov. 8 election. The economists’ exchange showed that while a significant group of the profession would view a Trump victory as a loss for America’s growth outlook, that view isn’t unanimous.

“Donald Trump is a dangerous, destructive choice for the country,” wrote the economists opposing the candidate, who include several Nobel Prize winners. “If elected, he poses a unique danger to the functioning of democratic and economic institutions, and to the prosperity of the country.”

Canceling Nafta

Trump has pledged to cut taxes and scrap the North American Free Trade Agreement as he seeks to boost U.S. growth. Clinton’s plan would strengthen trade enforcement, reward companies that let workers share in profits and seek to make wealthy Americans pay more in taxes.

In Navarro’s rebuttal, he said Trump’s plans “will significantly increase growth, boost wages, and generate trillions in new tax revenues.”

The economists who are warning against a Trump presidency seem to be in agreement with traders. Research from the Brookings Institution has shown that markets view his election as a risk, and Tuesday’s asset price moves support that theory.

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net. To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Randall Woods