President Trump’s populist economic program continues to stump the band of economists who pass themselves off as experts.
Remember Harry Truman’s definition of an expert: “a fella who was afraid to learn anything new because then he wouldn’t be an expert anymore.” President Trump’s booming economy in 2019 proved Truman’s dictum in spades.
Like Pharaoh’s priests, the experts refuse to learn anything new. But President Trump’s tetrad of populist economic nationalism has proven superior to the court magicians of the economic pharaohs.
The Trump four-fold formula, conceived in the campaign and delivered as promised in his administration, combines tax reform, trade reform, regulatory reform, and energy reform to supercharge national economic growth.
Its power comes from the combination of the four elements: together, the whole is greater than the sum of the parts.
Together, they work synergistically to make the United States the best place on earth to invest and do business—and to live, work, and raise a family.
And that is exactly what we’re seeing. While the economies of Germany and China stagnate, while economic riots grip France, Colombia, Chile, Tehran, Beirut, and Baghdad, the American economy goes from strength to strength.
Unemployment is at a 50-year low, the latest jobs report blew the doors off, the stock market hit record highs, and so did holiday sales.
Democrats tell us the Trump economic program would only benefit the rich and superrich. But the data proved them wrong.
Wages for everyone are rising, and workers at the bottom end of the pay scale are seeing bigger gains than those at the top.
Despite predictions “those jobs are never coming back,” America added over a half million manufacturing jobs since President Trump was sworn in, including some 76,000 factory jobs in 2019 alone.
Tax Reform Was the Spark
How did the four-fold formula produce this economic miracle?
America had one of the highest corporate tax rates in the industrialized world. Essentially, we were penalizing businesses for investing here.
The Tax Cut and Jobs Act changed all that. Rates that were once the highest are now the lowest, and companies that had been fleeing our shores are moving back.
President Trump’s trade reform adds incentives to invest in America. He recognized that Communist China and other countries use predatory trade practices including export subsidies, currency manipulation, wage suppression, and government-engineered theft of trade secrets to drive American businesses into bankruptcy.
Previous administrations placed their faith in failed utopian economic theories and failed international institutions such as the World Trade Organization.
President Trump unilaterally imposed tariffs on wrongdoers rather than waiting for the gutless bureaucrats in Geneva who the record shows could be counted on to do too little, too late.
Of course, the high priests of Davos went into full freakout mode over the tariffs. They predicted inflation would ravage the land like a California wildfire.
But again, the data proved them wrong. Consumer and producer prices remained flat. That’s not what the experts were taught was supposed to happen, so they couldn’t see it even as it was happening.
The Experts Were Proved Wrong Again on Trade
The experts also told us no trading partner would tolerate an America First trade policy. They were used to giving away the store to buy America’s “friends” around the world. We were told Communist China would become a freedom-loving ally of the United States if we gave them our capital, our technology, and our jobs. They were disastrously wrong.
President Trump leveraged America’s consumer market, the largest in the world, for better deals. Threatened with punishing tariffs, Mexico not only sealed its border to stop illegal immigrants, it signed a new trade deal, USMCA promised to replace the disastrous North American Free Trade Agreement, NAFTA. Another campaign promise fulfilled.
Red China came to the negotiating table, South Korea renegotiated its trade agreement with the United States and Great Britain is eager to strike a deal with us.
President Trump also took a machete to the kudzu springing up from the administrative state.
He promised to scrap two regulations for each new one issued. But he exceeded even his own goals, achieving a 22-to-1 reduction.
The Competitive Enterprise Institute found the Federal Register, the bureaucracy’s bible of government rules, has shrunk by a third under President Trump. It took President Reagan years to reach that benchmark.
To understand the impact of deregulation on business activity, consider the American Action Forum tallied $560 million in savings from regulatory cuts in just the first eight months of the Trump administration.
Businesses held their breath—and their cash—in anticipation of another costly regulatory assault from Obama bureaucrats. Now they can finally exhale, and that breathed new life into the economy.
The final element in the four-fold formula for revitalizing America is energy reform, and it is intrinsically linked to the other elements.
Energy reform recognizes that America’s vast energy reserves give us an advantage over global competitors.
The price of natural gas in America is a fraction of what it costs in Asia. Cheap abundant energy—essential for an industrial economy—offsets the cheap labor of East Asia.
So there you have the four aces—tax reform, trade reform, regulatory reform and energy reform—a new deal and a winning hand for all Americans.
Given a choice between placing their money in the clutches of confiscatory regimes abroad and facing punitive tariffs on one hand, or investing in a robust continent-wide consumer market with low taxes and respect for property rights on the other, investors are placing their bets on America first.
Here’s a prediction: President Trump’s populist economics will continue to prove the experts wrong in 2020.
Happy New Year!