In his speech accepting the Democratic nomination for vice president Wednesday night, Tim Kaine appealed to conservative voters put off by Donald Trump's unconventional policies. Kaine combined a mocking imitation of Trump with a couple of serious points about the economy.
The senator from Virginia cited an analysis by Mark Zandi, a former adviser to Sen. John McCain (R-Ariz.). Zandi, now the chief economist at the private research firm Moody's Analytics, has forecast that the Republican presidential nominee's policies would put almost 3.5 million Americans out of work after four years.
"Don’t take it from me," Kaine said. "Take it from ... John McCain’s chief economic adviser during the ’08 race, who estimates that Donald Trump’s promises would cause America to lose 3.5 million jobs."
Zandi first shared a preliminary version of his analysis with The Washington Post in March, and he and his colleagues released a more comprehensive report last month.
Kaine exaggerated Zandi's position in the McCain campaign. Zandi, a widely respected centrist, has said that his work on McCain's behalf was "very modest." Zandi has also advised Democrats and is supporting Hillary Clinton.
On the other hand, Kaine understated the projections from Zandi and his colleagues. Besides the millions who would be out of work, the report states that the economy would be miss out on an additional 6 million positions that employers would have created in the absence of Trump's policies. The economy would enter a prolonged recession, beginning in 2018 and ending in 2020, with the unemployment rate increasing to 7.4 percent by 2021.
A major reason the forecast is so pessimistic is because of Donald Trump's policies on trade. He has proposed a 45 percent tariff on Chinese imports and a 35 percent tariff on some imports from Mexico. The result would be steeper prices for consumers in the United States — an average 3 percent increase in prices across the economy, according to the report.
While Trump hopes that these tariffs would encourage manufacturers to produce domestically, forcing them to hire American workers, Zandi and his colleagues note that China and Mexico would probably retaliate with tariffs of their own, punishing U.S. exporters and their employees. The report projects that U.S. exports would decline by $85 billion.
Some economists have challenged the Zandi's assumptions, including J.W. Mason of the the liberal Roosevelt Institute. Mason argues that manufacturers in China and Mexico, not U.S. consumers, would pay most of Trump's tariffs -- in other words, prices for consumers would not increase as much. He also argues that domestic producers would be able to make up for more of the foregone imports, reducing unemployment.
In a way, though, Mason demonstrates Kaine's point. It is a mark of how confused politics have become in this campaign that Republicans' best economic arguments come from a liberal research group in Washington, rather than someone who has advised McCain and other politicians in both parties.
Zandi's report additionally faulted Trump's proposal to deport all immigrants living in the country illegally, which would reduce the size of the labor force, making it more expensive to produce goods here and further increasing prices for consumers.
Also, the report noted that although Trump's generous tax reductions would encourage Americans to work more and spend more, the massive deficits required to keep the government running without those taxes would have the opposite effect.
When the economy is doing well, savers have a choice between making money in the private sector or loaning money to the government by buying bonds from the Treasury. The more the government borrows, generally speaking, the less money is available for ordinary people to buy houses or start or expand businesses.
More from Wonkblog: