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.
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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 Chavez-like 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.