Trump’s tendency to double down on bad ideas doesn’t bode well for the economy
There are lots of reasons to worry about how President Trump would handle a recession, should we tip into one. There’s his incompetent economic team. Or the limited fiscal policy tools at his disposal, given that Republicans already spent nearly $2 trillion on tax cuts. Or his efforts to discredit the Federal Reserve just when we’ll need it most.
One underrated concern: Trump’s tendency to double down on stupid and destructive ideas, despite — perhaps because of? — overwhelming evidence of their stupidity and destructiveness.
Trump’s worst policies, economic or otherwise, tend to follow a pattern. First, he posits something like: Sure, the experts say that has predictably high costs and bad consequences. But ignore them! Believe me, it’s a great idea, and it’ll be completely costless.
To wit: Tax cuts will pay for themselves, without injury to deficits. China will pay all the tariffs, without harm to U.S. importers, manufacturers, retailers, farmers. Mexico will pay for the wall, without costs to U.S. taxpayers or international relations.
Free lunches, all around.
Then when it becomes clear those lunches weren’t free — in fact, they were quite pricey — the pitch changes. Okay, Trump and his cronies admit, maybe we’re suffering some pain now. But that pain will be worth it, because eventually it will pay off.
Someday the tax cuts will pay for themselves. Someday the trade war will pay off. Someday Mexico will pay for the wall.
In fact, to get us closer to someday, we just need more tax cuts, more tariffs, more fights with neighbors to the south. Because, hey, you know what they say: If a bad idea doesn’t work out, just make that bad idea even bigger.
Learning from mistakes and reversing course are never options; wishing away the foreseeable fallout always is. That wishing-away is also a team effort, and one that predates Trump. Republicans have for years been lying that tax cuts will eventually pay for themselves, if we’re only patient.
Ask Kansas how that worked out.
Even so, Team Trump has lately elevated this goal-post-moving to an art form. Consider how White House aides first publicly dismissed any indication that recession risks were rising, insisting that Democrats and the media were fabricating such fears. Then White House acting chief of staff Mick Mulvaney acknowledged to GOP donors this week: Okay, okay, we might have a recession, but it’ll be “moderate and short.”
Sounds an awful lot like, “Recessions are short and easy to win.”
Other Republican officials have been aiding and abetting Trump’s pigheadedness, too, in some cases hoping to turn it to their advantage.
On Thursday, for instance, Sen. Rick Scott (R-Fla.) cheerfully tweeted that he’d spoken with White House National Economic Council Director Larry Kudlow about the economy. Scott concluded from their discussion that Congress should use Treasury’s supposed tariff revenue windfall to come up with a plan to cut taxes elsewhere. Kudlow recently confirmed Trump’s interest in this idea.
Which raises a couple of questions.
First of all, isn’t that tariff revenue allegedly already earmarked for farmers? And second, tariffs are themselves taxes on Americans.
Oddly, Republicans always seem to believe that tax cuts will pay for themselves through higher growth — except when the taxes in question are Trump’s new taxes.
The reason, of course, is that positing this would require forcing the president to admit error, something he’s less and less likely to do the worse things get. Indeed, should economic growth not just slow (as it already has) but reverse, one could imagine him becoming even more protectionist, more isolationist, more insistent that the world is zero-sum.
We got a glimpse of this Thursday, when Trump complained how unfair it was that Germany, one of nine major economies now in or on the brink of recession, enjoys the privilege of offering negative sovereign debt yields. Trump sees this not as a sign of a country in crisis but rather a country somehow trying to cheat the United States.
The possibility of a synchronized global downturn would require some sort of coordinated global policy response, just as it did a decade ago during the Great Recession. But rather than evaluating how we got to the present situation, or how to make amends with the allies we might need to help get us out of it, we already know what Trump’s objective will be: proving his very wrong ideas were very right all along. |
