President Donald Trump’s economic policies have never been as cohesive as — love it or hate it — Reaganomics.
Nevertheless, as Trump begins his campaign for a second term, several thrusts can be examined. They offer an opportunity to grade his stewardship of the economy and what we might expect (more of the same) if he is reelected.
But remember: Trumponomics happened during a long expansion, the wind at his back, unlike the recessions that greeted Ronald Reagan’s early first term. How much credit Trump deserves is open to debate.
Thus, at his Orlando rally this past week, Trump bragged that “Since the election, we have created 6 million new jobs. Nobody thought that would be possible. They said it wouldn’t be possible.” In fact, the figure is approximately 5.4 million jobs since Trump actually took office, and this compares with 6.1 million jobs in the comparable period before he was sworn in.
Part of Trumponomics was standard Republican fare, especially a large tax cut. This reduction disproportionately benefited the wealthy. Never mind that in the 2016 campaign, Trump vowed to raise taxes on the rich. The reduction in corporate tax rates led to a record drop in corporate tax collections. The federal deficit skyrocketed. So much for tax cuts paying for themselves.
Another element deviated sharply from Republican orthodoxy since the end of World War II: Raising tariffs on allies and starting a trade war with China, the world’s second-largest economy. The cost of this is only beginning to be paid, with the World Bank warning that Trump’s trade policies are making a global slowdown worse.
Another norm-breaking departure from previous presidents is Trump’s bullying of the Federal Reserve, an independent entity yet one over which the White House holds the power of appointment and reappointment of its leadership.
One of the most destructive or, um, innovative moves by this administration (depending on the viewpoint of the observer) has been weakening and wrecking federal agencies and Cabinet departments from the inside. It’s been effective, too, with unknown consequences for the economy.
Wholesale elimination of these examples of “big government” was once a GOP goal. In addition to arguing that this leviathan was infringing on the people’s liberty, they claimed it was an intolerable burden on business and creation of jobs and new companies.
Presidential candidates listed the departments they would kill. In a laff riot, during a 2011 debate then-Texas Gov. Rick Perry forgot the third department he would abolish after Commerce and Education. It was the Department of Energy, which Perry now leads.
Republican presidents have yet to eliminate any Cabinet department. George W. Bush even added one, with Homeland Security.
Interestingly, Republicans held control of the White House and Congress during Trump’s first two years in office — yet not a single Cabinet department or major agency was abolished (the administration does want to dismember the small Office of Personnel Management). The era of “big government” is far from over.
But the leviathan can be used for Trump’s purposes, whether nationalism, love of fossil fuels or antipathy toward regulation.
For example, at a time when climate change is the existential threat, Trump has repeatedly weakened the Environmental Protection Agency, including rolling back Obama-era rules meant to lower emissions. He wants to slash the agency’s budget by 31 percent, although this is unlikely to pass the Democratic-controlled House.
Trump’s Interior Department is opening millions of acres of federal lands and coastal areas to drilling. The administration wants to allow drillers to emit more methane, a particularly dangerous greenhouse gas. Meanwhile, the administration wants to weaken auto emission standards, even though major automakers oppose it.
The Consumer Financial Protection Bureau still exists. This was the agency established (by Elizabeth Warren) after the 2008 meltdown to police shady banking practices. But under Trump, it has become another watchdog-turned-lapdog.
Last year, acting director Mick Mulvaney fired the bureau’s 25-member advisory committee. Some members — the panel included academic and consumer adovcates — had pushed back against his weakening of an agency he called “a joke.” Among other things, Mulvaney’s CFPB gutted rules for payday lenders, who prey on the most vulnerable citizens.
At a time when housing affordability is a major issue, Trump installed Ben Carson as secretary of Housing and Urban Development. Carson was a gifted neurosurgeon but is way over his head at HUD. But that’s the point. Wreck from the inside.
No wonder the unsheltered population began to rise under Trump, a shift from declines under the administrations of George W. Bush and Barack Obama. Meanwhile, families living in federally subsidized housing are contending with rising health and safety violations.
Once again, Trump is proposing savage cuts at HUD, although these have been rebuffed by Congress. Even so, neglect is an ongoing policy. So are new rules aimed at decreasing federal housing assistance, including one ostensibly aimed at noncitizens but could hurt hundreds of thousands of citizens seeking help.
The American Society of Civil Engineers gives America a D-plus for its infrastructure. But despite a $1 trillion campaign promise and “infrastructure week” events in office, Trump has done nothing. Well, not quite. The administration took the Obama-era TIGER grants, essential for transit projects, and turned them over to road building.
To be sure, Trumponomics has its winners. Among them are fossil-fuel industries, companies benefiting from trade protectionism, the rich and the “financial services” sector. A CNN poll in May showed 56 percent of respondents saying he’s doing a good job on the economy, even though other polls show an ominous trend against him.
Presidents usually get more credit or blame for the economy than they deserve. The presidency is one branch of one arm (the national one) of the governments of the republic (states, counties, municipalities). And in a capitalist system all of them have important but limited roles. Grading Trump is doubly difficult because of his norm-breaking, his thousands of lies and the corruption that ranges from his refusal to step away from his business interests to the damning findings of the Mueller report.
Set all that aside (a big lift) and focus on the economy, and I give him an F.
Why? Because of the self-inflicted damage from tax cuts, trade conflicts, and failure to make public investments, as well as “regulators” prepping the next financial crisis and ongoing predatory practices. Atop this is the shameful refusal to accept the scientific consensus on climate change and act on a crisis that is already affecting the economy and much else.
But millions would disagree with me. Trump’s scary/heady blend of nationalism, bluster and appeals to white grievance — with the economy doing well — appeals to them. The combination might allow him to again carry the election by a tiny margin. Given his temperament, a second term might make these years seem placid.