A Placebo President?

By Tyler Cowen

The American Interest

When I ponder why the American electorate turned to such an unorthodox President as Donald Trump, I think first of the idea of control. As I’ve outlined in The Complacent Class: The Self-Defeating Quest for the American Dream, so much of recent American history can be understood in terms of Americans’ desire to exercise increasing control over their individual lives, even at the expense of the national interest. So how might that apply to the election and Administration of Donald Trump?

When the Trump campaign came along, America felt just enough in control on economic issues to gamble on an attempted cultural restoration. At the time of Trump’s election in November, most economists agreed that the American economy was pretty close to full employment. And over the past year, real wage growth has been fairly robust, inflation has remained low, and the stock market has stayed high. Nor, despite of some well-publicized domestic terror attacks, has the American homeland felt under existential threat from abroad.

To date, the commentary on Trump has focused on perceived losses of control, such as 9/11 or diminishing global influence on the foreign policy side, and the loss of manufacturing jobs, real wage stagnation, and rising use of opioids on the domestic side. Those events all did raise the background level of anxiety, but the bigger picture is that the rise of Trump actually coincides with America righting its ship, at least to some extent, especially in economic matters.

For all the talk of change in the Trump campaign, we Americans often open the door for disruption when we know we won’t get too much of it. Think back to 2012, which was not so long ago. The economy was noticeably worse than in 2016, and yet the Republican electorate chose arguably the safest candidate on the slate, namely Mitt Romney. Responsibility was the priority, not counterrevolution. The presumption had been that the 2016 Republican primary voters would go through a similar calculus, but the national mood was different and the establishment candidates didn’t create much enthusiasm. Economic calm, being taken for granted, didn’t need another push from a mainstream Republican, and so cultural issues came to the fore, and that favored a provocateur who would command attention.

For all the talk of change on the Republican side, as the Trump Administration progresses, it has become increasingly clear that Trump doesn’t have much of an economic agenda. He’s sent mixed signals on Obamacare and criticized the now-ailing House Republican Border Adjustment Tax for being too complicated. Economic legislation is being postponed until 2018, or later still. Trump pledged to protect Social Security and Medicare, and he seems to be sticking with this, another cementing in of economic security. The main action so far has been Trump’s agitation for higher tariffs and trade agreement renegotiations, aimed at returning to the (supposedly) golden past of widespread manufacturing employment, not ushering in a radical new economic order.

Continue to full article . . .

Picture: Gage Skidmore from Peoria, AZ, United States of America (Make America Great Again hat) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)%5D, via Wikimedia Commons

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