Making the Rust Belt Rustier

Why does he want this? Because he sees international trade the way he sees everything else: as a struggle for dominance, in which you only win at somebody else’s expense.

.. What Reagan did do, however, was blow up the budget deficit with military spending and tax cuts. This drove up interest rates, which drew in foreign capital. The inflow of capital, in turn, led to a stronger dollar, which made U.S. manufacturing uncompetitive. The trade deficit soared — and the long-term decline in the share of manufacturing in overall employment accelerated sharply.

What Does Your Party Want?

Securing the loyalty of the millions of white working-class Americans who lined up behind Trump will require that all three wings of the Republican Party — its business faction, its ideological purists and its cultural traditionalists — abandon any idea of strict adherence to core conservative principles on fiscal and social policy.

“Just as Reagan converted the G.O.P. into a conservative party, with his victory this year, Trump has converted the G.O.P. into a populist, America First party,”

.. Trade and immigration are in my view unambiguously good for the country — but new policies on these issues will have to be done in ways that are supported by the American people, not shoved down their throats by the elites. In this regard, I am a populist. The elites in both parties have not understood Trumpism and have often been contemptuous of the intellect and lifestyle of the Trump loyalists.

.. These voters have shunned Republicans because they disagree with the party’s focus on low taxes, small government, and pro-business policies. They benefit enormously from middle-class entitlement programs; their children get what they consider to be good educations from public schools and state universities. They have no problem with redistribution so long as it is focused on either people who can’t work or people who do.

.. Where movement conservatives see many social programs and the high taxes that fund them as threats to liberty, these voters see them as giving decent, hard-working people a hand up to live decent, dignified lives. Where business conservatives see free trade or immigration as helping people and increasing growth, these voters see those policies as favoring foreigners over themselves and as just another way that their bosses try to pay them less without justification.

.. newly recruited white working-class converts to Trump’s Republican Party do not consider conservative dogma on gay rights, abortion, gender identity, or traditional marriage their priority.=

.. Bannon described the goal of the “entirely new political movement” he believes Trump is leading:

It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Shipyards, ironworks, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.

.. Bannon is explicit in his identification of the enemy:

The globalists gutted the American working class and created a middle class in Asia. The issue now is about Americans looking to not get f—ed over. If we deliver, we’ll get 60 percent of the white vote, and 40 percent of the black and Hispanic vote and we’ll govern for 50 years.

.. This ad was part and parcel of an election that has put some of the most vocal House Republicans, including the vaunted Freedom Caucus, on notice that defying Trump’s right-populist orientation could put their political future at risk.

.. “Trump dominated — in the primary and general elections — those districts represented by Congress’s most conservative members,” Tim Alberta wrote in National Review (he is now at Politico):

They once believed they were elected to advance a narrowly ideological agenda, but Trump’s success has given them reason to question that belief.

.. Even if they support Trump nine times of ten, voting against him once could trigger a tweetstorm or the threat of a visit to their district. It’s a chilling thought for members who know that the Republican National Committee, the National Republican Congressional Committee, and the House GOP leadership already want them gone.

Kevin McCarthy, the House majority leader, plans to make full use of Trump’s leverage to keep recalcitrant members of the Freedom Caucus in line.

Larry Kudlow and Economics in the Trump Administration

Noah Smith (along with a fair section of the Internet) has some concerns about Larry Kudlow as chair of the Council of Economic Advisers: he’s overconfident, too much of a partisan, and fixated on nonexistent problems (e.g., inflation).

.. This is one of the important contributions that economics can make to public policy: the understanding that the world is complicated, and the dedication to uncovering rather than masking that complexity. In a presidential administration, you would expect this perspective to come from the Council of Economic Advisers.

.. What concerns me is that he has been working as an economist for decades—that is, he makes money by thinking and talking about economic issues—yet his conception of the discipline seems limited to the simple, theoretical relationships of Economics 101.

Most of Kudlow’s thinking about economic issues appears to boil down to three ideas.

  1. The first is that tax cuts increase economic growth—a mantra that conservatives have repeated for decades, yet is not supported by reviews of existing research.
  2. The second is that expanding the money supply will necessarily generate high inflation, on which basis Kudlow predicted a “major inflationary plunge” just as the Great Recession was beginning.
  3. The third is that an expensive currency—what politicians call a “strong dollar,” but Kudlow calls “King Dollar” (with the capitals)—is good for the economy.

.. That’s the essence of what I call economism, the subject of my new book: a worldview that assumes that society operates according to a small set of fundamental principles, and that public policy can be shaped on that assumption.

.. With Kudlow as chair of the CEA, Donald Trump is giving up even the pretense of trying to understand economic reality, instead doubling down on a handful of abstract slogans that have little to do with our current challenges. That’s hardly surprising, given that Trump is basically just an extreme caricature of contemporary conservatism

Sam Brownback Calls on Donald Trump to Mimic His Kansas Tax Plan

Controversial measure hasn’t led to the growth the governor had forecast for the Sunflower state

 Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured.

.. About half of pass-through business income in the U.S. is earned by the top 1% of households,

.. Mr. Brownback’s policy gave businesses an incentive to come to Kansas. But it also gave existing businesses a big tax break—or a reason to restructure to avoid paying taxes—without creating any new jobs.

.. In Washington, the Kansas idea—preferential business tax rates—is part of the Republican plan for the biggest federal tax overhaul in 30 years.

.. “They had many more owners of small businesses than they expected, because it doesn’t take much to reorganize yourself.”

.. At least 330,000 entities used the zero rate, more than 70% above projections.

.. The cuts have done little to jump-start Kansas’ economy overall—with growth for this year projected to be flat, compared with 2% GDP growth nationally. Ratings firm Standard & Poor’s twice downgraded Kansas’ bond ratings.

.. Those cuts contributed to dismal approval ratings for Mr. Brownback. He’s the country’s least popular governor, according to a 2016 MorningConsult survey.