[ From trade wars to border policy, Trump’s plans if he wins the
presidency again are set to make the U.S. economy far worse for
working people.]
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A SECOND TRUMP TERM COULD SPELL ECONOMIC DISASTER  
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Max B. Sawicky
January 8, 2024
In These Times
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_ From trade wars to border policy, Trump’s plans if he wins the
presidency again are set to make the U.S. economy far worse for
working people. _

Former President Donald Trump speaks at a campaign rally at Terrace
View Event Center in Sioux Center, Iowa, Friday, Jan. 5, 2024., (AP
Photo/Andrew Harnik)

 

What could we have to look forward to, or dread, in economic policy if
Donald Trump returns to the White House in 2025?

The challenge here is separating whatever might germinate in his brain
or that of his advisers and which long-standing priorities of the
Republican Party remain. We saw the difference
between 2017 and 2020. In important cases, Trump deferred to
then-Senate Majority Leader Mitch McConnell (R-Ky.) and the
Republicans in Congress. He swallowed their prescriptions on judicial
appointments, and he helped push through a bill to cut taxes,
primarily benefiting the rich and corporations. But in other ways he
left the reservation.

The most obvious deviation was his rhetoric about trade deficits,
which I am convinced he could never define correctly. (In national
income accounting, it’s the excess of imports over exports.) It may
sound bad, though it isn’t necessarily.

In any case, we did get very real tariffs. The Trump rhetoric on trade
was appealing to manufacturing workers clobbered by outsourcing. Even
a progressive hero like Sen. Sherrod Brown (D-Ohio) ended
up embracing
[[link removed]] Trump’s
move to impose tariffs on steel. The Biden Administration itself has
declined to reverse all of Trump’s tariffs from his first term.

Simply put, a tariff is a sales tax confined to imports. To say the
Chinese ​“paid” the tariff is a _non sequitur_, like saying
the supermarket pays the sales tax. That makes it more ridiculous for
supporters of tariffs to complain about inflation. Like sales taxes,
a tariff pushes up the gross prices that you as the consumer pay. The
seller who collects the tax (the importer, or the supermarket) simply
hands it over to the government.

The anti-China rhetoric has continued from the former president, even
though we now have evidence of Trump’s businesses being on
China’s payroll
[[link removed]].
A revival of the trade demagoguery under a President
Trump 2.0 will impede trade and increase inflation. New tariffs will
push prices up — not a great outcome for everyday
working people.

Trump’s trade rhetoric does not sit well with historic Republican
policies, nor with its current tribunes in the Koch network’s Club
for Growth. But that is the old party. It’s a new day, and not
a better one.

Another worrisome area is immigration. As supporters of employers,
Republicans have tended to indulge immigration for the sake of
recruiting cheap labor. Restricting immigration will make some
employers unhappy. ​“Closing the border” could mean chaos, from
the standpoint of routine commerce. The U.S. does quite a lot of
business with Mexico.

But once again, it’s a new day. Racism-infected demonization of
immigrants has become one of the GOP’s principal selling points. It
may even have something to do with reported increases
[[link removed]] in
Trump’s support from voters of color, especially men. 

Another new thing will be promises to blow up
the ​“administrative state.” I’m so old I remember President
Ronald Reagan appointing Bill Bennett to be Secretary of Education.
Bennett had promised to help terminate the Department of Education.
Turned out he liked the job too much, and the DoE has endured.

Still, reports of Trump’s team organizing to flood the federal
bureaucracy with toadies does not bode well for the enforcement of
regulations. These characters may not work themselves out of jobs, but
they are likely to lay down before business interests opposed to any
sort of regulation in fields such as the environment, food safety,
occupational health and safety, and worker rights, among many others.

One example where Trump might have done some good during his
presidency but was thwarted by the Congress was in infrastructure.
Trump thinks of himself as a builder, so he likes infrastructure. As
in his New York real estate career, he thinks you can finance it with
funny money. But his administration was too focused on other things
to formulate a real plan
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Congress just blew it off.

A bit more obscure will be the fate of the humble U.S. Postal Service.
Biden has apparently been too busy to dump Trump’s appointee, the
toxic, corrupt Postmaster-General Louis DeJoy. Pressure to privatize
the USPS will likely revive as Trump transforms its Board of
Governors.
[[link removed]] The
Federal Aviation Administration could face similar threats.
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There remain many additional questions. What about Social Security and
Medicare? We know the old Republican Party wanted to cut them down.
Trump has danced around this. Obamacare would almost certainly be
a goner, with Medicaid under dire threat. And we would likely also
wave goodbye to Biden’s caps on certain prescription drugs (as
meager as they may be).

We might see the future in the form of an expansion of Medicare
Advantage, to the disadvantage of the rest of Medicare. This is a way
of segregating beneficiaries by income, and letting the better-off and
healthier suck resources out of the program for everybody else.

Reproductive rights is an issue that Republicans have figured out
requires some caution. The right-wing extremists in Congress don’t
care, but Trump is smarter than that. Reforms could come more in the
fashion of death by a thousand cuts, rather than one sweeping,
national ban. As a result, those seeking abortions in red states will
likely have to travel for care. The Feds will not restrain the red
states, who, after all, have achieved national political supremacy
without the need for voters’ approval.

Chaos makes for less investor and consumer confidence. That could
impede economic growth.

Otherwise, I would expect an erratic path for policy, which is what
we observed in the first Trump term, except for continuous cruelty
directed at immigrants, people of color, LGBTQI persons and women.

The potential for chaos renders predictions about the economy even
less certain than usual. The impact of presidents on inflation,
economic growth, and unemployment is typically exaggerated, depending
on who is talking, and whether credit or blame is due.

Chaos makes for less investor and consumer confidence. That could
impede economic growth. A big influence is always the Federal
Reserve, which is outside a president’s fingertip control. Efforts
to shrink the deficit will reduce employment, but I would be
surprised by any heroics in this department from any Congress.

In staking out their own economic platform ahead of this year’s
election, Democrats can point to some helpful industrial policies such
as the Inflation Reduction Act, but these are not easy to explain, and
Democrats are generally not very good at explaining anyway. There are
constructive, progressive trade policies which have been pursued that
support well-paying manufacturing jobs, but these aren’t easy to
explain either.

In general, The Democrats have a lot to crow about with regard to
the economy
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which should help them in the coming elections, yet the role of the
Biden administration’s policies shouldn’t be oversold. Progress in
recent years is unambiguous, but progressives had plenty to say about
the inadequacies of the U.S. economy in 2016 at the end of Obama’s
second term
[[link removed]]. Medicare
was not for all. Unemployment insurance was a mess.
[[link removed]] Inequality
was very much with us. Gun ownership was out of control. The MAGA
horde was gearing up. You can make your own list. 

Today, structural inequities persist, the housing market is in trouble
and we still haven’t built back better. These are all good cases for
Biden and the Democrats to run on a clear plan of supporting working
people and creating a more fair economy in the coming elections. 

Presently all signs point to a good year for the economy, and
bequeathing this to Trump at the end of 2024 will help him, just as
Obama’s record when he left office helped boost Trump in 2017 and
after. Yet trade war theatrics, domestic spending cuts, and
saber-rattling, or worse, with respect to Iran would also likely
dampen economic outcomes in 2025 and the years ahead, if the former
president comes back into power.

If the most dire predictions of a second Trump term with regard to
using the Department of Justice and law enforcement to target his
political opponents are borne out, economic policy could end up being
among the least of our worries.

_[MAX B. SAWICKY [[link removed]] is
a senior research fellow at the Center for Economic and Policy
Research. He has worked at the Economic Policy Institute and the
Government Accountability Office, and has written for numerous
progressive outlets.]_

_Disclosure: Views expressed are those of the writer. As
a 501©3 nonprofit, In These Times does not support or oppose any
candidate for public office._

_Reprinted with permission from In These Times
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* Donald Trump
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* 2024 Elections
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* Economy
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* U.S. economy
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* trade wars
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* Tariffs
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* Jobs
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* unemployment
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* inflation
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* MAGA
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* Make America Great Again
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* GOP
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* Republican Party
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* Joe Biden
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* Democratic Party
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