Trump’s ap­plause-line eco­nomic plan

Cecil Whig - - FRONT PAGE - Michael Ger­son

— Many Repub­li­cans are be­ing driven mad by hope. In the mo­ments be­tween Don­ald Trump’s at­tacks on griev­ing par­ents and his joke about as­sas­si­na­tion, GOP loy­al­ists are grasp­ing at any straw of com­pe­tence or san­ity to jus­tify their con­tin­ued sup­port of a Hin­den­burg-in­spired pres­i­den­tial cam­paign.

So Trump’s re­cent speech at the Detroit Eco­nom­ics Club was re­ceived by some con­ser­va­tives with grate­ful praise as “uni­fy­ing” and a “good first step.” It was, in fact, the least ap­peal­ing, least cre­ative, least co­her­ent eco­nomic ad­dress I have ever had the ex­treme dis­plea­sure of re­view­ing. It is the prod­uct of a cam­paign search­ing for new ways to fail.

A ma­jor pol­icy ad­dress is a dif­fer­ent kind of test for a pres­i­den­tial cam­paign than build­ing a crowd or con­trol­ling dam­age af­ter gaffes. It re­quires a group of pol­icy and po­lit­i­cal ad­vis­ers — of­ten hold­ing dif­fer­ent views on sub­stance and strat­egy — to agree with (or at least live with) a text. And it forces a can­di­date to shape and af­firm the best ver­sion of his or her agenda. Many in­ter­nal pol­icy de­bates in a cam­paign get de­cided in the strug­gle over the word­ing of a key para­graph.

The Trump cam­paign clearly in­tended the Detroit speech to ap­pease eco­nomic con­ser­va­tives by sound­ing slightly less like Bernie San­ders. So he sup­ported an end to the death tax (af­fect­ing about three-tenths of 1 per­cent of the pub­lic), em­braced the House Repub­li­can pro­posal for a sim­pli­fied tax rate struc­ture, pro­posed low­er­ing the cor­po­rate tax rate; and promised a mora­to­rium on gov­ern­ment reg­u­la­tions. These ideas range from good to ir­rel­e­vant. But they hardly con­sti­tute a new eco­nomic agenda. They are more like the least pop­u­lar left­overs of the Rea­gan Revo­lu­tion.

There are at least three ma­jor eco­nomic and po­lit­i­cal prob­lems with Trump’s eco­nomic ap­proach, which should have been ob­vi­ous even to the non-econ­o­mists on the cam­paign.

First, the speech of­fered lit­tle se­ri­ous or cre­ative pol­icy that might ap­peal to Trump’s most im­por­tant po­lit­i­cal au­di­ence: work­ing-class vot­ers who feel shafted by eco­nomic change. There was al­most noth­ing — just a sin­gle sen­tence promis­ing a fu­ture pro­posal — about help­ing work­ers ob­tain the skills to suc­ceed in a mod­ern econ­omy. Which means that Trump some­how gave a speech on eco­nom­ics that avoided the most ur­gent eco­nomic chal­lenge of our time. There was noth­ing about in­creas­ing wage sub­si­dies that would help less-skilled work­ers lead bet­ter lives


— an idea en­dorsed by both Pres­i­dent Barack Obama and House Speaker Paul Ryan. And Trump’s child care pro­posal came in the form of a tax de­duc­tion, which would mainly ben­e­fit up­per in­come house­holds (the cam­paign has since scram­bled to con­sider ma­jor changes to this plan).

Se­cond, Trump’s eco­nomic ap­proach would ex­plode gov­ern­ment debt (through tax cuts and mas­sive in­fra­struc­ture spend­ing) while com­pletely ig­nor­ing Amer­ica’s long-term fis­cal cri­sis. How does Trump re­spond to the 2016 Medi­care Trustees Re­port pro­ject­ing that the Medi­care Trust Fund will be ex­hausted by 2024, re­sult­ing in mas­sive, im­me­di­ate ben­e­fit cuts? What re­forms would Trump un­der­take of So­cial Se­cu­rity, which is run­ning a cash deficit of about $75 bil­lion a year, in­cur­ring huge amounts of debt and fac­ing in­sol­vency by 2034? Trump does not even men­tion these is­sues. Which means he some­how gave a speech on eco­nom­ics that avoided the most ur­gent fis­cal chal­lenges of our time.

Third, the speech’s main ap­peal to the work­ing class was the prom­ise to ab­ro­gate trade agree­ments, in the most am­bi­tious ap­pli­ca­tion of pro­tec­tion­ism since Her­bert Hoover and the Smoot-Haw­ley Tar­iff Act. This would amount to a mas­sive, re­gres­sive tax on con­sumer goods from abroad, an in­crease in the cost of many goods used in the sup­ply chains of Amer­i­can com­pa­nies, and an in­vi­ta­tion to a trade war that could re­sult in a global re­ces­sion. As eco­nom­ics, this is lu­di­crous. Con­ser­va­tives are try­ing to look on the bright side of a plan that in­creases gov­ern­ment power over the econ­omy in Hugo Chave­z­like ways, with­draws Amer­ica from the en­tire post­war trad­ing or­der and aban­dons the foundations of mod­ern cap­i­tal­ism.

To sum­ma­rize: The parts of Trump’s eco­nomic plan that are fa­mil­iar to Repub­li­cans are un­re­spon­sive to cur­rent chal­lenges; the parts that are novel are hor­ri­fy­ingly de­struc­tive. Taken to­gether, these pro­pos­als are ev­i­dence of a cam­paign that can­not pro­duce a min­i­mally co­her­ent pre­sen­ta­tion of the can­di­date’s be­liefs. The most likely ex­pla­na­tion is that the can­di­date lacks a co­her­ent set of be­liefs, and his ad­vis­ers are left to shape an eco­nomic agenda around his fa­vorite ap­plause lines.

This is not a good start at any­thing. It is one more step in the degra­da­tion of the Repub­li­can Party.

Michael Ger­son is a syn­di­cated colum­nist. Con­tact him at michael­ger­son@wash­

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