9 December 2019

Trumponomics is all diagnosis and no prescription


Donald Trump won the American presidency with a dark diagnosis of the country’s problems. In his inaugural address, Trump contrasted the “just and reasonable demands of a righteous public” — great schools, safe neighbourhoods and good jobs — with a bleak reality: “Mothers and children trapped in poverty in our inner cities; rusted-out factories scattered like tombstones across the landscape of our nation; an education system, flush with cash, but which leaves our young and beautiful students deprived of knowledge; and the crime and gangs and drugs that have stolen too many lives and robbed our country of so much unrealised potential.”

“This American carnage”, he famously declared, “stops right here and stops right now.”

Three years on and the red caps now read “Keep America Great”. Mission accomplished.

Not, however, according to most Americans. Despite comparatively robust economic growth, a new poll by the Financial Times and Peter G Peterson Foundation finds that two-thirds of Americans do not believe their personal finances have improved since Trump’s election. According to the same poll, 61% of Americans think that the bullish stock market, something the President likes to boast about at his rallies, has had little or no impact on their own financial situation.

In one sense, this is completely unremarkable. Presidents generally win office by claiming something is broken and promising to fix it. When they seek re-election, there is a healthy row about whether or not they have done so.

But the severity of the “carnage” identified by Trump, and the finger-pointing at the received wisdom of the entire political class, rather than a single party, sets him apart from his predecessors. And, with the Presidential election a year away, the high priests of Trumpism find themselves in a bit of a muddle. Are the governing ideas of the US economy still causing carnage, or has Trumponomics turned things around?

Take, for example, Tucker Carlson. The Fox News pundit has the ear of the president and frequently uses his primetime slot to challenge the pro-market orthodoxies of the right. Once a libertarian, Carlson has made free marketeer-bashing an essential part of his shtick. Earlier this year he even praised Democratic presidential candidate Elizabeth Warren, a politician he otherwise loathes, for her ‘Plan for Economic Patriotism’.

The villain of Carlson’s anti-market monologue this week was investor Paul Singer. Carlson uses the story of Cabela’s, a sporting goods shop in Sidney, a small town in Nebraska, to paint a grim picture of 21st century capitalism. After Singer’s firm, Elliott Management, took a stake in Cabela’s, it was acquired by Bass Pro Shop, and, according to Carlson, “one of the last thriving small towns in America went under”. The story of Sidney is, to Carlson, the story of America more generally: “Shuttered car dealerships next to defunct restaurants, across the street from thrift stores and methadone clinics. Community after community, desiccated. Empty husks, with nothing left. Huge swaths of the United States look like this now. What happened?”

There are several problems with Carlson’s segment. See, for instance, the significant inaccuracies in Carlson’s account of the story identified by Elliott as well as the local pushback against his characterisation of Sidney. But more striking than these (non-trivial) objections is the absence of any concrete proposals from Carlson.

In a follow up segment on Sidney, he responded to Nebraska Senator Ben Sasse’s call for practical solutions with three proposals: “Tell the truth”, “return the money” (referring to donations made by Singer to Sasse’s campaign) and “speak to the rest of us like adults, no more baby talk”.

At no point does Carlson explain, in policy terms, how government should treat mergers like this differently, or what the government could be doing to help people in towns like Sidney. If Trumpism means anything at all, shouldn’t it have come up with some ideas before the end of Trump’s first term?

Here is where the rubber hits the road, not just for Carlson, or Trump, but economic populists in general.

It’s not that they aren’t onto something. In fact, those who deny the existence of profound social and economic problems in modern America aren’t paying attention. Consider the study published in the Journal of the American Medical Association last month that found that life expectancy has fallen for the third consecutive year in the US, and that the decrease is being driven by a rise in working-age deaths.

But while the Trumpist diagnosis is worth paying attention to, we are still waiting for a distinctly Trumpist prescription.

If any of the Trump administration’s actions have boosted American prosperity, it is deregulation and tax cuts that can plausibly be described as stimulative. Whatever you think of these measures, they are hardly a clean break from Republican conventional wisdom (other than in their disregard for the health of the public finances). The one area where Trump has set himself apart from his party’s orthodoxy most obviously is trade, and in doing so he has hurt the parts of America that Trumponomics was supposed to save.

Campaigning with the story of an elite that has ignored the interests of the people is easy. Implementing policies that you claimed that elite had deliberately ignored is proving more difficult.

If right-wing critics of the free market want to be taken seriously, they need a workable agenda of their own. Until then, crudely blaming the market economy for America’s ills only harms the capitalist system they claim to want to save from itself.

Oliver Wiseman is US editor of The Critic