The Commercial Appeal

Not on message

Republican front-runner upends party’s pro-market beliefs

- By Zachary A. Goldfarb

After losing the 2012 presidenti­al election, Republican Party leaders vowed to craft a message they thought would be more in tune with the middle class — promising to deliver faster economic growth and to help all workers, not just the very rich.

The message was built on the bedrock GOP notion that the primary enemy of the American economy is an oversized and overreachi­ng federal government.

But those careful plans have hit a large and brash-talking obstacle in the form of current GOP front-runner Donald Trump.

Trump’s surging campaign has pushed the party in a different direction, one that often clashes with free-market principles that have long underpinne­d GOP economic policy. Some establishm­ent Republican­s worry that the turn could damage the economy, and their party, for years to come.

Trump criticizes government, but he shot to the top of the GOP field by rallying voters against another enemy: immigrants from Mexico and low-wage workers in China, whom he blames for lost jobs and stagnant wages in America. He has proposed levying tariffs on imported goods, deporting millions of immigrants who entered America illegally and reducing the number of legal immigrants allowed in each year.

In a further blow against conservati­ve orthodoxy, he said recently that he favors higher taxes on the rich.

Critics, including many leading conservati­ve economists in Washington, call Trump’s plans “nativist,” “protection­ist” and incompatib­le with the party’s core promarket beliefs. They also worry Trump’s ideas could spread to other GOP contenders.

“This is a very dangerous moment, I think, for the Republican Party,” said Stephen Moore, a conservati­ve economist and co-founder of the Committee to Unleash Prosperity, which has been urging candidates to adopt low-tax, low-regulation policies to grow the economy.

“What Trump is saying about trade and immigratio­n is a political and economic disaster,” Moore said. “He’s almost now making it cool and acceptable to be nativist on immigratio­n and protection­ist on trade. That’s destroying a lot of the progress we’ve made as a party in the last 30 years.”

Many Republican candidates beyond Trump have voiced opposition to new freetrade deals, including the proposed TransPacif­ic Partnershi­p being negotiated by the Obama administra­tion with several Asian countries. While every GOP candidate promises to secure the nation’s southern border and crack down on illegal immigratio­n, some are now expressing an openness to reducing levels of legal immigratio­n.

Free-market economists have long argued that trade and immigratio­n are critical to growing the U.S. economy. Top Republican­s have frequently adopted those beliefs.

But a growing portion of the conservati­ve base — and, to a lesser extent, the nation as a whole — now blames U.S. workers’ economic woes on competitio­n from illegal immigrants and from low-skilled foreign factory workers abroad.

In a 2014 Public Religion Research Institute survey, 57 percent of Republican­s said immigrants mostly hurt the economy by driving down wages, compared with 33 percent who said they help by providing low-cost labor. The nation split evenly on the question.

This year, the Pew Research Center found Republican­s were evenly split on whether trade agreements helped or hurt their families; Americans in general were slightly more likely to say they’d helped. Majorities of Republican­s — and pluralitie­s of

all Americans — said trade deals made U.S. workers’ wages lower and lead to job losses in the United States.

Appealing to those sentiments is a way for GOP candidates to deliver on a promise they’ve been making since the start of the campaign: to offer relief to American workers who have not only struggled through the Great Recession and its aftermath, but have seen their incomes stagnate over the past 25 years.

That appeal is one many conservati­ves, increasing­ly angry at GOP leadership, have embraced, and which they believe is a political and economic winner.

“It just defies the common sense of any nonpolitic­al person in this country that importing large amounts of low-skilled, indigent people to this country is a road to prosperity,” said Daniel Horowitz, a senior editor at Conservati­ve Review who writes often about immigratio­n issues. Politicall­y, he said, “I understand a tough issue when I see one — maybe getting rid of Head Start, abolishing the minimum wage. This ain’t a tough issue.”

Rich Lowry, editor of the conservati­ve National Review, wrote in Politico recently that “it’s almost as if invoking the interests of America’s workers in the context of immigratio­n is a faux pas that leads to a blackballi­ng by whatever is the Chamber of Commerce’s equivalent of Skull and Bones. Trump has stomped all over this misbegotte­n piety, and good for him.”

Some of Trump’s rivals, such as Gov. Scott Walker of Wisconsin and Sen. Ted Cruz of Texas, have praised his immigratio­n focus. Others, such as Florida Gov. Jeb Bush, have simultaneo­usly pushed for tighter border security and extolled the economic benefits of immigrants.

So-called Reform Conservati­ves have been pushing candidates to embrace targeted tax relief for working families and innovative, market-oriented solutions to problems such as the rising costs of health care and higher education.

Traditiona­l supply-side thinkers, including Moore and the other founders of his group — economist Arthur Laffer, former presidenti­al candidate Steve Forbes and conservati­ve commentato­r Larry Kudlow — have urged candidates to flatten tax rates and reduce regulation­s to unleash faster economic growth.

Trump has won some praise from those some of those people. For example, Laffer said he enjoys how Trump tells voters “‘I’m rich and I love it!’ And he’s not ashamed of it!”

But Laffer and other economists oppose Trump’s trade and immigratio­n proposals, which they say would dampen economic growth. (They also oppose any move to raise top income tax rates or taxes on investment). Moore notes that the last Republican president to erect large tariff barriers was Herbert Hoover, and that the results worsened the Great Depression.

Business groups, in particular, want GOP candidates to talk more about rolling back regulation­s, lowering tax rates, forging new trade agreements and reforming the immigratio­n system to allow workers who arrived illegally to have a path to legal status.

“We aren’t hearing enough about policies that are going to grow the economy,” said Chad Moutray, chief economist at the National Associatio­n of Manufactur­ers. “We need policies that really need to allow manufactur­ers to grow in new markets, hire more people, and we aren’t hearing all these things right now.”

Some conservati­ve thinkers say they’re convinced the candidates will eventually work their way back to debating tax, regulatory and other economic issues, before Iowans caucus and New Hampshire voters go to the polls.

“It has temporaril­y deferred the serious debates that are going to come on other issues,” said Doug Holtz-Eakin, an economist who was chief policy adviser to 2008 GOP nominee John McCain.

Laffer said that he doesn’t worry too much about candidates shifting focus: “I cool my jets,” he said. “I just take a deep breath.”

 ?? ROSS D. FRANKLIN / ASSOCIATED PRESS ?? Republican presidenti­al candidate Donald Trump has rallied voters against immigrants from Mexico and low-wage workers in China.
ROSS D. FRANKLIN / ASSOCIATED PRESS Republican presidenti­al candidate Donald Trump has rallied voters against immigrants from Mexico and low-wage workers in China.

Newspapers in English

Newspapers from United States