Free-marketers are right that tax cuts stimulate economic growth that in turn lead to expanding production and eventually more federal tax revenue.
But the problem traditionally has been that to obtain tax reductions, Republicans also have had to sign on reluctantly to larger expenditures. Or, worse, they willingly believed they could spend more, simply because more money poured into the federal treasuries.
George W. Bush doubled the national debt. After running against Bush profligacy (remember the Chinese credit card trope), Barack Obama doubled it again by doubling Bush’s levels of borrowing. Conservatives blasted Obama for his even greater lack of thrift. The Tea Party movement emerged in reaction to reckless expenditures and borrowing to fund Obamacare.
Now Donald Trump is caught in the same old matrix. His deregulation, tax cuts, and energy expansion will likely increase federal revenue. But his various budget concessions and his own proposed increases indefense spending and infrastructure would likely bleed the budget at a far greater rate than the growing federal revenue.
Once again, new spending will discredit conservative vows of budget prudence and supply-side economics. (Budget-wise, what good does it do to expand the economy if the political price is acquiescence to ever greater and costlier government?)
Trump is blasted for not filling federal positions and for his threadbare staff. In reality, he probably gains support for the mere appearance of parsimony. He should press that advantage by enacting a government hiring freeze and a pay-as-you-go philosophy, even if at first it is only symbolic.
If Trump wants to build the wall and “make Mexico pay for it,” why not simply slap a 10 percent tax on the $50 billion in remittances that flow annually to Mexico and Latin America, largely from illegal aliens and foreign nationals? In addition, the government could help fund the wall with fees and fines from DACA qualifiers who seek green cards.
If Trump wants a huge private-public partnership to build infrastructure, why not, at a time of record oil production, increase the federal gas tax for three or four years to pay for the project? What better way to ensure the entire idea does not end up like California’s stalled and ever more costly high-speed rail project? If Trump wants family leave and other popular entitlements, why not calibrate the costs as users’ fees paid out from an individual’s future Social Security payments?
Eight years of traditional stimulus such as massive budget deficits, near-zero interest rates, and huge increases in federal spending did not lead to much economic growth. But those policies did result in record debt. As the economy grows, we will see interest rates rise and growing deficits that are not so easily serviced.
Trump may not have run as a budget cutter, but he did campaign against traditional Republicanism that, hand-in-glove with Democrats, had ballooned the national debt to $20 trillion. The populist move would be to protect the public and stop the massive borrowing.
Finally, if Republicans believe that the public does not care about deficits and debt, or that belt-tightening before an election is suicidal, then let them at least stop harping about spendthrift progressive policies when out of power. Yappy ankle-biting is not an endearing trait.
Why Republican Stereotypes Are Stereotypes
George W. Bush, a good man without malice, nonetheless last week illustrated why Donald Trump is president.
While in Dubai, Bush criticized the Trump Administration’s lack of progress on immigration reform. Then he weirdly noted, “Americans don’t want to pick cotton at 105 degrees, but there are people who want to put food on their family’s tables and are willing to do that.”
Where to start when Republican elites confirm their own stereotypes?
First, Republicans should agree with Churchill’s dictum about the inadvisability of criticizing one’s government while in a foreign country: “When I am abroad I always make it a rule never to criticize or attack the Government of my own country. I make up for lost time when I come home.” Bush repeatedly followed that guidance when he insisted that he would not attack Barack Obama—even at home. But not now.
Second, Bush is far more critical of Trump’s efforts to reach a compromise on DACA and border security than he was of Barack Obama’s illegal and politically expedient 2012 pre-reelection executive order nullifying immigration law and enforcement. Whether he intended it or not, Bush’s “woke” emergence as a megaphone after eight years of hibernation, confirms the impression that Republican elites were always much closer in spirit to their Democratic counterparts than they were to their own so-called grassroots conservative base. Translated, they mildly were displeased with the Obama agenda, but loathe Trump’s.
Third, how incoherent were Bush’s cotton-picking riffs! (He may not have realized it, but Bush put a 21st-century spin on 19th-century plantation owners’ pleas that they needed imported chattel African labor because American workers were neither acclimatized to heat nor inexpensive enough to pick cotton in scorching Southern temperatures). Bush substantiated the stereotype of crass corporate concern (note the inadvertent contempt in “willing to do that”) that trumps both the law and the idea of promoting the wages of U.S. entry-level workers—as well as general popular cluelessness about illegal immigration in general.
To wit, cotton picking (which I used to do as a child in the 1960s on my father’s small 40-acre cotton allotment) has been widely mechanized for over 50 years. And agriculture now only accounts for about 10-20 percent of illegal alien labor.
Mechanization has revolutionized farming, even in crops once deemed impossible to automate such as nuts, olives, raisins, and delicate Napa Valley wine grapes. New computerized and laser-calibrated breakthroughs will likely mean that even soft fruit and vegetables will soon be mechanically picked, matching ongoing labor reduction in weeding and irrigation.
More importantly, it was not just the Trump tax and deregulatory reforms that have fueled economic growth and prompted workers’ wages to rise, but also the substantial drop in illegal immigration. In the new psychological climate that’s followed, employers are beginning to believe it is no longer worth the risk to hire illegal aliens, as they scour the economy to find citizen workers (in the inner city, the red state postindustrial swath, and the barrio) and pay them more to reenter the workforce.
When the country has a 63 percent labor participation rate, there are more able-bodied workers than we assume, even as unemployment measured by traditional rubrics is about to fall below 4 percent.
The old Republican idea that illegal immigration is a good thing because noble foreign nationals work hard and cheaply for businesses in a way unemployed Americans “will not do” is not a sustainable factual, ethical, or political position. About half of illegal immigrant households use some sort of government assistance, for example.
Mechanization, automation, and higher wages for labor are the future of the American workforce. If we learned anything from the 2016 election it is that we should reject the calcified idea of corporate importation of inexpensive laborers from impoverished countries, profiting from their peak productive years, and then as they age, tire, and become ill, passing them on to the social welfare industry to rely on taxpayer-subsidized health, legal, and education services—even as firms seek out yet a new, young, and recyclable cohort from Mexico and Latin America.
Fantasies of a new Bracero Program are the pipe dreams of those who did not grow up with it. Few remember how workers often physically resisted returning home, how the Mexican government stole guest workers’ wage deposits, how illegal labor coexisted with sanctioned imported labor (what would a bracero do when he decided not to return home?), how corrupt was the distribution of braceros to particular farms, and how an entire protest movement, from documentaries like “Harvest of Shame” to Woody Guthrie’s“Deportee,” reduced the program in the public mind to something like Spartan helotage.
To promote something like “that” while abroad in Dubai of all places, home of multi-billionaires and impoverished guest workers, and in the context of “people” who are to “pick cotton at 105 degrees” reflects why both Barack Obama and Donald Trump were elected and why a traditional Republican will probably not win again in our lifetimes.
Republican Culture Trumps Politics
We rightly associate the elite disdain for the clingers, irredeemables, and deplorables with progressives like Obama and Hillary Clinton. But politics is incidental to the matrix; more essential is class.
It was Mitt Romney who said he could not work with 47 percent of the population and wrote them off as hopelessly lost voters. It was David Brooks and Bill Kristol who caricatured the white working class as near Neanderthal and romanticized illegal aliens (often by deliberating conflating them with legal immigrants.)
If one were to read carefully through the disparagement of Americans in the texts of Peter Strzok and Lisa Page, with their slurs against hillbilly Virginians and Texans and smelly Trump supporters, one can see that Strzok appears likely to be a suburban Republican or independent of the sort who would vote for John Kasich.
The point is not that Strzok and Page are hyperpartisans, but that they are comfortable with candidates who foremost reflect their cultural tastes and proper cursus honorum. And as we have witnessed with some in the NeverTrump movement, for these sorts, being grateful that new economic policies might reinvigorate the old rust-belt and the hinterland is more than offset by the concomitant price of an ascendant working class that lacks the tastes of the elite and the romance of the deliberately distant poor and minorities.
The Trump catharsis has shown that about 10 percent of the Republican Party, the NeverTrumpers, was largely apolitical. That is, former cornerstone positions of deregulation and tax reform, oil and gas production, charter schools, deterrent foreign policy, restoring friendship with Israel and moving the embassy to Jerusalem were apparently always secondary to the more important criterion of offering a mild, sober and judicious frown to progressivism, through discerning losers like George H.W. Bush, John McCain, or Mitt Romney.
Such a Republican elite was so embedded within American establishment institutions as to be both immune from the economic stagnation of an Obama neo-socialist revolution (remember income inequality soared under Obama) and in no real need of a Reagan revolution or Trump’s often messy radical push-back against progressivism.
Its creed was not really, as advertised, the ethics of “losing nobly is better than winning ugly,” but rather the snobbery of “losing a cultural image is worse than winning a political agenda.” Put more bluntly, it is better to put up with a socialist with a “perfectly creased pant” than a prairie-fire conservative in rumpled Walmart slacks.