Maybe supply-side zealot Larry Kudlow, his new economic adviser, can explain it to him. Perhaps House Speaker Paul D. Ryan (R-Wis.), who decided that tax cuts justified standing behind an unfit president, can give him a tutorial. Better yet, maybe wealthy GOP donors who figured they could use the faux-populist president to push through their agenda (tax cuts, deregulation) might start to squawk. Somebody should tell President Trump: He’s doing great damage to the economy, making President Barack Obama look like Milton Friedman by comparison.

The New York Times reports that “as the United States prepares stiff trade measures and China retaliates, stock markets have plummeted and some of America’s biggest companies are pushing back. Industry giants like General Electric and Goldman Sachs, as well as agricultural companies, have lodged objections with the White House, saying that tariffs on both sides of the Pacific and limitations on investments will cut off American companies from the world’s most lucrative and rapidly growing market.”

The cruel irony is that tariffs are nothing more than a tax — a regressive one — on consumers. Working-class families, whom Trump claims to champion, will be hit by higher prices at the store. Even worse, it is rural America that gets bludgeoned in the trade war:

AD
AD
The 25 percent tariff on pork that China imposed on Monday is expected to be particularly harmful, including in regions that supported the president, like Iowa, North Carolina and Indiana. Last year, American farmers sent more than a billion dollars’ worth of pork to China, their largest export market by value after Japan and Mexico.
“Because we’re so blessed to have America feed the world, we’re also the first industry to get slammed whenever there are trade difficulties between the U.S. and other countries,” Denise Bode, the coordinator for the American Fruit and Vegetable Processors and Growers Coalition.
American farmers appear to be the first casualties of an escalating trade war,” said Max Baucus, a former Democratic senator from Montana and a chairman of a group called Farmers for Free Trade. “With farm incomes already declining, farmers rely on export markets to stay above water. These new tariffs are a drag on their ability to make ends meet.”

Democrats running in red states and districts might want to bring this up during the midterm campaigns. Between higher health-care premiums, higher consumer prices and new barriers to farmers’ overseas markets, any savings that rural voters might get from the GOP tax cuts may very well be wiped out.

But it’s not just rural America that will suffer because of Trump’s economic blunders. Stocks finished the first quarter of 2018 down, the first such quarterly decline since 2015. It might make one pine for the Obama years, when the president did not start trade wars, did not lash out at technology companies based on his misdirected venom toward the press, and did not threaten to pull the plug on the North American Free Trade Agreement.

Stock-market declines hit wealthier Americans (the richest 10 percent own 84 percent of stocks), but sustained stock-market declines also will nip investors’ and consumers’ confidence. Furthermore, weakened U.S. markets spread uncertainty to foreign markets. The Wall Street Journal notes that “shares of technology companies led declines in markets outside the U.S. as traders largely took cues from a bumpy day on Wall Street in the previous session when European markets were closed.”

AD
AD

Supply-siders and wealthy Trump supporters, delirious over tax cuts, have been beguiled by the distorted economic philosophy that has gripped the right ever since Ronald Reagan. For too long, they have considered a reduced top marginal tax rate as the be-all and end-all of economic policy, a magic elixir that swamps concerns about ballooning debt, long-term unemployment, decreased economic mobility, income inequality and the middle-class squeeze (rising college and health-care costs, flat wages). Failure to recognize the equal (if not greater) importance of robust immigration and trade, along with the critical stability provided by a rules-based economy (rather than one directed from on high by personal grudges), rendered them blind to the risks associated with an erratic right-wing populist such as Trump. If they were really true to conservative, market-based economic principles — rather than simply obsessed with tax cuts — they would have realized that Trump’s economic “philosophy,” if you can even call it that, is a threat to the United States’ long-term economic health.

By backing Trump, Republicans have handed Democrats the opportunity to present themselves as the responsible stewards of both the economy and our national security. The Trump GOP certainly doesn’t provide reliable, rational leadership on either. In the midterms and in 2020, Democrats will have a field day if the economy — the only thing holding Trump and the GOP afloat — falters. In that case, Republicans will have only themselves to blame for the economic and political troubles that their economically illiterate president has brought on.

AD
AD