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Does a spate of positive economic news mean that America is really going to be great again? Will President Donald Trump’s fortunes and polling numbers rise as a result of the economic good news?
The Dow Jones industrial average regularly trades over 26,000 and our retirement investments are up significantly over the first year of Trump’s presidency.
The U.S. federal tax cuts have made American businesses arguably more competitive – maximum rates of 21 per cent sure beat 35 per cent. More than 160 companies are reportedly considering employee bonuses and customer fee cuts as part of the corporate reaction to the tax cut package.
Trump is tweeting this information daily.
David Frum, in his new book Trumpocracy: The Corruption of the American Public, argues that this certainly has to be considered as the voluble Democratic opposition starts working to unseat the Republicans up for re-election in the House of Representatives and Senate in November. All 435 seats in the House and 33 of the 100 seats in the Senate will be contested. Thirty-nine state and territorial governorships will also be voted upon.
Presumably the collective outcome of the midterms will also be heavily influence by Trump’s desire to run again in 2020 and, more importantly, his chances of winning a second term.
Purely from the perspective of home economics, very few people fail to notice their improving fortunes. As American political commentator James Carville famously noted during Bill Clinton’s successful campaign for re-election in 1992, It’s the economy stupid! Elections everywhere are more likely won on economic good health than recessions and depressions.
Economic good health arguably also trumps brilliant policy initiatives like the Paris Agreement on climate action or the Iranian nuclear deal framework.
Cutting taxes from X to Y has the added advantage of being simply understood, immediate in consequence and easy to sell.
Negotiating treaties and agreements on matters of acute complexity (and less than majority intellectual comprehension) raise all sorts of political problems: they consume time in their negotiation; they inevitably involve some form of economic sacrifice; and they remain complex in implementation.
Cutting taxes is simple, stupid.
Therefore, if the midterm elections are fought on tax cuts, plain and simple, the Democratic opposition will have to guard against complex, lefty, difficult-to-comprehend policy initiatives. That raises the issue of what the rank-and-file Democrat House members choose to structure their campaigns around and about.
Presumably, many will ask questions about the $1.4-trillion deficit occasioned by the tax cuts. There are no respected academic economists anywhere who can guarantee that it will be overcome by the new economic growth created by the tax cuts. Those who say it will are spouting hypothesis, not theory.
Objectively, the only real counter to this deficit is shrinking government payrolls and programs. Democrats will have to loudly ask, Which ones?
Many Democrats will no doubt take a run at Trump’s irrational, spiteful, racist, sexist and (add your favourite Fire and Fury adjective here) performance over the nearly two years of his first-term mandate. It remains to be seen if all of this unfit-for-public-office-of-any-kind behaviour will dent his rural, male, white, uneducated base. So far, he has maintained about 38 per cent support in the face of almost daily faux pas in his first year. Sanguine authors and commentators like Frum now suggest that year two will see rising support.
Key to reversing the state of American affairs will be a strong midterm voter turnout, and candidates who can deftly explain why democracy can’t exist when wealth is concentrated in the hands of a (relatively) few billionaires who make it a life’s work to diminish the role of government.
While Trump has nothing like the careers of the Koch brothers, Harry and Lynde Bradley, Richard Mellon Scaife, John Olin, the DeVos family or Robert Mercer in supporting a wide range of think-tanks, academic institutions, media groups and government allies (see Jane Mayer’s 2017 opus Dark Money), he has emerged at the head of this parade and waves its flag.
While I have to believe that more than half of U.S. voters value other qualities more highly than minimizing the role of government and becoming as rich as possible, I think the midterm elections will be a close race. That in itself is cause for alarm.
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