In its May 13th issue The Economist magazine’s lead editorial trashes Trumponomics. Although admitting Trump’s policies could raise productivity and create a mini-boom, the article suggests low and middle income workers will be worse off. Here’s my response.
In your lead editorial for May 13, (the one where you compare President Trump to Henry VIII), you admit Trump’s policies “could stroke a mini-boom” but say it “offers no lasting remedy for America’s economic ills.” You also claim the economic assumptions in Trump’s plan “are internally inconsistent” and “based on a picture of America’s economy that is decades out of date.”
Your criticisms of Trump’s economic program are remarkably similar to those leveled whenever Americans have attempted to reverse a series of failed progressive economic experiments. Such criticisms involve opinions and references to orthodoxy rather than referring to any evidence.
Trump’s economic plan is based on principles that have successfully guided America’s economy for over two centuries—substantially lower tax rates, slower growth in federal spending, fewer regulations and free markets.
In my book Rich Nation Poor Nation there is extensive historical data on the performance of wages in America. Since 1900, there have been only 50 years when America clearly pursued the type of economic policies Trump has proposed. Almost all of the gains in real wages in America since 1900 occurred during those 50 years.
You reference the left’s criticism of Trump’s policies for the “…poor distributional consequences, fiscal indiscipline and potential cronyism.” There have been five periods totaling 52 years when America decided to heed these critiques. In each of these periods policies shifted to higher tax rates, faster growth in federal spending, more regulations and restraints on free markets. For the entire 52 years as America was pursuing this progressive economic agenda there was no increase in workers’ real wages.
America’s extraordinary success has not been achieved by what you refer to as “orthodox” policies agreed to by “most economists.” Rather, it has been achieved by reducing the government’s power and control over individuals and enhancing their economic freedom. This has been and always will be the key to providing the greatest amount of goods and services to the largest number of people. Trumponomics is consistent with these principles.
Saugatuck, Michigan USA