Donald Trump may well be the most unusual candidate ever to run for President. Many find his brash, outspoken, undisciplined manner of speaking highly offensive. An eloquent manner of speaking is certainly a desirable quality for a president. However, there are more important skills than an eloquent manner of speech. The most important set of skills are an individual’s ability to assess major issues strategically, reach effective solutions to problems and act decisively to implement appropriate changes. Trump has all of these qualities.
Both political parties agree the main problem with the economy is a failure to generate higher wages. The reason wages have not increased is due to the federal government’s increased control over individuals, businesses and markets. My research shows when these so-called progressive policies have been in effect, the economy and wages have inevitably suffered.
Almost all the increase in take-home pay has occurred during periods when tax rates were declining, when federal spending was slowing and when regulations and controls over businesses and markets were receding. These are the polar opposites of progressive policies.
Trump’s plan to reduce taxes, federal spending and regulatory burdens represents the only viable solution to restoring the growth in real wages. Historically, it’s the same set of policies that enabled the economy to resume growing after previous failed experiments with progressive policies.
Trump on Trade
As with most economists, I believe free trade improves living standards. A lack of barriers to trade among the states has been a key factor in our nation’s prosperity. Extending free trade to other countries further enhances the wealth of all countries.
While Trump has endorsed free trade, he’s perceptive enough to realize free trade is not the most important source of our nation’s prosperity. Destructive tax and regulatory policies have undermined growth and prosperity. This has occurred in spite of a low 11⁄2% average tax on imports. Here are Trump’s thoughts on trade:
Our original Constitution did not even have an income tax. Instead, it had tariffs emphasizing taxation of foreign, not domestic, production. Yet today, 240 years after the Revolution, we’ve turned things completely upside down. We tax and regulate and restrict our companies to death and then we allow foreign countries that cheat to export their goods to us tax-free. How stupid is this?
Trump’s correct. It’s stupid. While free trade promotes prosperity, it cannot help a country that places destructive taxes and regulations on its businesses. Trump clearly sees how the effective path to restoring the nation’s prosperity is to eliminate the nation’s greatest barriers to prosperity.
Trump on Healthcare
Prior to the Affordable Care Act (ACA), I estimated government intervention into our healthcare system made healthcare twice as expensive as it would have been under a free market system. After the ACA healthcare costs have exploded to an estimated $3 trillion a year. Healthcare costs are now roughly three times what they would be in a free-market, competitive environment.
Along with the House Republicans, Trump wants to restore competitive pressures to healthcare. Such moves would lower healthcare costs significantly, truly making healthcare both affordable and available. Moving to a free market in healthcare would save up to $2 trillion a year.
Whether it’s the economy, trade, healthcare or any other issue, Trump sees the big picture and does not get embroiled in minutiae. He sees beyond the immediate consequences of a policy and recognizes the subsequent impact policies can have well into the future. These are precisely the qualities necessary to lead our nation back to prosperity.