American Financial Leviathan Hinders Reindustrialization 4: The Miran Factor

Young Stephen Miran, appointed by D. Trump in 2025 to the high post of Chairman of the Council of Economic Advisers (CEA) to the US President, has no roots in the academic world except for a Harvard PhD in economics. He gained his practical background in investment firms and came to the CEA chairmanship from the position of chief strategist at hedge fund Hudson Bay Capital Management. CEA chairmen are usually either prestigious names selected from leading universities (Ben Bernanke, Jason Furman, Austan Goolsbee), or long-time Washington insiders (Jared Bernstein), or both. Miran fits none of these criteria.

Therefore, unbound by any academic shackles, Miran is unboundlessly radical in his advice to the President, justifying Trump's hyperprotectionism as a tool to reduce the trade deficit, and calling for stimulating the devaluation of the overvalued dollar to compensate for US losses from "unfair" competition with trading partners.

Miran proposed a fundamentally different model of industrial policy from Bidenomics in his report "Brittle and Robust Reindustrialization" Miran Stephen. Brittle Versus Robust Reindustrialization. Report. Manhattan Institute. February 2024. (accessed on July 24, 2025).. Acknowledging the importance of reindustrialization and active government action, he criticized the Biden administration's approach, which includes generous subsidies to politically favorable economic sectors with low market-price demand, as well as counterproductive incentives for the labor movement and special environmental restrictions. This will at best lead to a "brittle" form of reindustrialization that will leave the US vulnerable to a second wave of deindustrialization once subsidies inevitably end.

To achieve sustainable (robust) reindustrialization, he proposes, first, aggressive supply-side reforms—deregulation to reduce production costs; second, investing in scientific and technical education to train personnel capable of accelerating reindustrialization. Third, increasing spending on procurement of defense products and technologies. The military, he believes, will better handle the perennial problem of industrial policy—picking winners and losers—than political activists and bureaucrats in civilian sectors. Defense-oriented industrial policy creates particularly strong positive economic effects in the form of technological progress, R&D, and investments; moreover, it has "dual use": it simultaneously stimulates national security efforts and reindustrialization.

And in his speech at the Hudson Institute CEA Chairman Steve Miran Hudson Institute Event Remarks. The White House. April 7, 2025 (accessed on July 24, 2025). he expanded the theoretical basis for trade protectionism, appealing to the concept of global public goods produced by the US for the whole world. This position is absolutely radical and counter-liberal, rethinking the former pillars of neoclassical economics in the format of strategic competition, so it deserves a closer look.

The global public goods, shamelessly consumed by the whole world from Miran's perspective, are, first, the security umbrella that created the greatest era of peace humanity has ever known; second, dollars and Treasury securities, reserve assets that enable the global trade and financial system supporting this greatest era of prosperity. The global military and dollar infrastructure are interconnected. But the burden of maintaining the dollar as a global good produced only by America but consumed by the whole world brings enormous costs and inconveniences to the US, which malicious competitors exploit. High global demand for dollars raises its exchange rate and thereby restrains American production and exports, while other countries prosper, trading among themselves in safe dollars.

There are other unpleasant side effects of providing the dollar as a reserve asset. Other countries can buy US financial assets to manipulate their currencies. They pour so much money into the US economy that it fuels economic vulnerabilities and crises. For example, in the years leading up to the 2008 crash, China, along with many foreign financial institutions, increased its investments in US mortgages, contributing to the housing bubble. Thus, China is accused by Miran of causing the 2008 global financial crisis, in addition to its "unfair" transformation into an industrial giant.

Miran proposes to restore fairness by distributing the burden of financing global public goods across all countries of the world. He sees several ways:

First, other countries can accept tariffs on their exports to the US without retaliation, providing revenues to the US Treasury to finance the provision of public goods.

Second, countries can end their unfair and harmful trade practices, opening their markets and increasing purchases from America;

Third, they can increase defense spending and purchases of US military products, easing the burden on US troops and creating jobs in America;

Fourth, they can invest in building factories in America to avoid export tariffs;

Fifth, they can simply write checks to the Treasury, which will help the US finance global public goods.

The last proposal, meaning the introduction of a tax (fee) on dollar reserves, is identical in essence to the previously discussed MAC: large foreign holders of US government bonds must pay a fee in one form or another (e.g., through reduced debt interest) for using the dollar, to "compensate" for the harm to the US economy caused by this "strength" of the dollar. In other words, foreigners must pay again for the well-known "free lunches" of the US in the form of importing by issuing dollars, since America has grown so fat from "gluttony" (by the way, in every sense of the word, including the most literal) that it is losing its ability to compete with other nations.

The radicalism of this regulatory mechanism is so extreme that Miran masks it in more elegant financial schemes. In the report "A User’s Guide to Restructuring the Global Trading System" Miran Stephen. A User’s Guide to Restructuring the Global Trading System Hudson Bay Capital. November 2024. (accessed on July 24, 2025). he proposed a grand pact under which America's major trading partners collectively agree to gradually sell off their multi-trillion-dollar dollar reserves. This campaign would lower the dollar's value and improve the US trade balance. And to prevent a sharp rise in US interest rates as foreign governments offload Treasury bonds, the deal would require them to convert a significant portion of what they retain into 100-year US federal debt bonds with repayment far in the future.

Miran calls this grand concept the "Mar-a-Lago Agreement," equating it to previous epochal global agreements that updated the world economic order—the 1944 Bretton Woods Agreement, which established a stable postwar system by pegging major currencies to the gold standard, and the 1985 "Plaza Accord," where the G5 countries—US, Japan, West Germany, France, and the UK—developed a successful joint program to devalue the then-strongly overvalued dollar.

However, since D. Trump himself is inconsistent in his currency policy—sometimes criticizing the strong dollar for burdening US industry, other times advocating for a strong dollar and threatening BRICS countries with 100% tariffs for abandoning the dollar in settlements—Miran backpedals, acknowledging that if Trump still leans toward the "reserve status of the dollar," the US will remain stuck with its overvalued currency—the main source of chronic trade problems.

The main problem addressed by Trump's economic policy is choosing tools adequate to the post-globalist world order being created, with a desperate attempt to retain global American leadership amid already established Chinese industrial dominance. Therefore, Miran advocates solving the US's accumulated macroeconomic problems not through internal structural maneuvers, such as the practically unfeasible reduction of the budget deficit, but at the expense of the external world, constructing schemes of forced improvement of the US current account in the form of the five above-described ways of financing global public goods.