One of the things I absolutely loved about the 80s–aside from action movies where Arab terrorists could be the bad guys and those white jackets Don Johnson wore on Miami Vice–was the sense of optimism in America. It was a huge shift from the days of Jimmy Carter’s malaise, when the country thought that its best days were behind it, to the era that Ronald Reagan ushered in–an era brimming with confidence and ambition, when nobody made any apologies for success and big dreams inspired us to build even bigger realities. Sure, it led to some excesses (not to mention a strange fascination with Lee Iacocca)–but it was also a totally awesome time to be an American, when it really seemed as if there was nothing we couldn’t do.
All that was made possible by a booming economy, which didn’t happen by accident. Looking back at Reagan’s average GDP growth of nearly 8% by the time he left office, it’s easy to forget the pain the country endured during those first two years, before the Federal Reserve strangled double-digit inflation with double-digit interest rates and tax cuts finally spurred enough job growth to put America back to work. With a media forever anxious to revise history to make Republicans look bad, it’s also easy to forget how that boom carried the country through the Clinton years, with Slick Willie reaping the benefits of Reagan’s peace dividend. Cut through all the noise, though, and the lesson really isn’t that complicated: A government that goes lighter on regulations and taxes encourages productivity and growth.
Pretty straightforward, right? Well, not when you’re one of those leftist types who takes a look at the rather breathtaking jump in economic activity since Donald Trump was elected and asks, “What’s wrong here?” If eight years of Obamanomics–stuffed with $1 trillion worth of porkulus and a doubling of the national debt–couldn’t get us past a measly 2.9% average GDP growth, how could Trump be goosing things this hard when he hasn’t even been in office for three months?
Ah, it must be because he’s cruising on the Obama dividend. Or at least that’s what The Economist thinks :
Economic and political cycles have a habit of being out of sync. Just ask George Bush senior, who lost the presidential election in 1992 because voters blamed him for the recent recession. Or Chancellor Gerhard Schröder, booted out by German voters in 2005 after imposing painful reforms, only to see Angela Merkel reap the rewards.
So obviously, it was Obama who primed the pump. You know, with his EPA trying to kill off the coal industry, executive orders that effectively nullified immigration law and allowed millions of low-skilled workers into the country, issuing more regulations than any president in history–that kind of stuff. It had absolutely nothing to do with Trump promising to cut corporate taxes, get the regulatory state off the backs of business, and bring manufacturing jobs back to the United States.
No, siree, can’t have that–because giving Trump’s policies credit might make them more popular:
But the political mood is sour. A populist rebellion, nurtured by years of sluggish growth, is still spreading. Globalisation is out of favour. An economic nationalist sits in the White House. This week all eyes were on Dutch elections featuring Geert Wilders, a Dutch Islamophobic ideologue, just one of many European malcontents.
This dissonance is dangerous. If populist politicians win credit for a more buoyant economy, their policies will gain credence, with potentially devastating effects.
What those effects might be, the article doesn’t say exactly–but I think we can safely conclude, based on The Economist’s worldview, that the most devastating effect would be a loss of confidence in the whole globalist scheme. Trump’s rhetoric about putting America first encapsulates that fear perfectly, because heaven forbid that the President of the United States craft economic policies based on what he thinks is best for his own country. Why, such thinking is so twentieth century! But what else would one expect from a man who eats ketchup on his steaks? Mon dieu!
Look, those of us who have studied politics know full well that presidents are not masters of the economy. Point of fact, the best thing a president can do to help the economy along is to get out of the way as much as possible. Reagan understood this, which is why he structured supply-side policies the way that he did. Trump also understands this, and had made YUGE tax cuts and a rollback of the Obama regulatory state the immediate goals of his administration. The markets, anticipating that these policies will lead to economic expansion, have reacted accordingly. In other words, they are simply manifesting the confidence that things are going to get way better–confidence that was sorely lacking over the last eight years. Whether or not The Economist editors like it, Donald Trump has a lot to do with creating that confidence.
And if it’s another thing that Trump understands, it’s that confidence is contagious. That’s why we see all the braggadocio, and how everything is gonna be great, the best, the biggest you’ve ever seen, believe me. Perhaps that’s what The Economist and like-minded leftists fear the most–because all they have to offer is doubt, self-recrimination, and the threat of boiling death because of climate change if we don’t change our consumerist ways. To them, policies that create and maintain a thriving middle class are a threat to the planet, which is why they’ve been conditioning us to be happier with less. Smaller cars, smaller houses, smaller incomes, more dependency–looking back, the anemic growth of the Obama years seems more of a feature than a bug. Giving the people back their confidence causes all that to unravel.
Expect more of this panic from the left if Trump actually delivers.