Trumponomics

It is profoundly naive and dangerous to ascribe to Trump any consistent policy positions or philosophies beyond "What makes Trump feel good?"  However, we are getting a sense of what Trumpist economic policy is looking like, and it's not what he campaigned on.

First, we have the tax cut.  This was sold to the rubes as a way for business to finally pay workers what they deserve.  Instead, companies are conducting massive stock buy backs that have inflated the worth of the executives' stock options.  This is a feature, not a bug.  Those WWC who voted for Trump will see very little benefit from the tax bill.

Second, infrastructure is a con and a weapon.  Trump's decision to oppose a badly needed rail tunnel between New Jersey and Manhattan seems curious, because he ran on improving infrastructure.  Trump's actual plan for improving infrastructure mostly involves making construction companies wealthier, without actually providing any money to build and repair things.  To a degree, Trump's opposition to a Hudson River tunnel might just be some fit of pique that people in NJ and NY hate his guts.  What is clear is that Trump was never serious about rebuilding American infrastructure.

Third, we can see the simple-mindedness of his thinking in his decision to launch a trade war.  He believes that all trade is zero-sum and his need to dominate his enemies - and he sees much of the rest of the world as "enemies" - means that he needs to fight and "win" a trade war.  It's been a pretty consistent position of his over the years.  Trade wars are the idiot's version of economics, because it's based on pretty flawed understanding of how trade works.  (Some of that idiocy exists on the Left.)

Recently, I was teaching my students about the causes of the Great Depression.  Most scholars agree that it was caused by a confluence of many issues: huge wealth inequality that left large segments of the working class unable to participate in economic activity; high tariffs like Smoot-Hawley and Fordney-McCumber that led to a break down in international trade; an inelastic currency wedded to the gold standard and other forms of rigid orthodoxy; a stock market bubble; a glut of overproduction...it's complicated.

However, looking at the larger economic landscape today, we have the potential to have another mini-1929, or at least another 2008.  The inequality that has fueled the recent Great Recession is still there.  We have bubbles and debt problems that mirror the weakness of the banking system in 1929.  Low interest rates have hampered traditional inflationary monetary policy solutions and required "invented" measures like Quantitative Easing. 

Now, we get to add a trade war!  Yay! 

Thanks Republicans....