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How Trump Got Trickled Down

Summary:
One thing many people forget about the 2016 election is that as a candidate, Donald Trump promised to be a different kind of Republican. Unlike the mainstream of his party, he declared, he would raise taxes on the rich and wouldn’t cut programs like Social Security, Medicare and Medicaid that ordinary Americans rely on. At the same time, he would invest large sums in rebuilding America’s infrastructure.He was lying.Trump’s only major legislative achievement, the 2017 Tax Cut and Jobs Act, was absolutely standard modern Republicanism: huge tax cuts for corporations, plus tax breaks that overwhelmingly benefited the wealthy. The only unconventional aspect of the legislation was the variety of new tax scams it made possible, like the benefits for investors in “opportunity zones,” which were

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One thing many people forget about the 2016 election is that as a candidate, Donald Trump promised to be a different kind of Republican. Unlike the mainstream of his party, he declared, he would raise taxes on the rich and wouldn’t cut programs like Social Security, Medicare and Medicaid that ordinary Americans rely on. At the same time, he would invest large sums in rebuilding America’s infrastructure.

He was lying.

Trump’s only major legislative achievement, the 2017 Tax Cut and Jobs Act, was absolutely standard modern Republicanism: huge tax cuts for corporations, plus tax breaks that overwhelmingly benefited the wealthy. The only unconventional aspect of the legislation was the variety of new tax scams it made possible, like the benefits for investors in “opportunity zones,” which were supposed to help poor communities but have actually enriched billionaire real estate developers.

Trump also came very close to passing a health care “reform” that would have imposed savage cuts on Medicaid, eliminated protections for those with pre-existing conditions and taken away health insurance from more than 30 million Americans.

And there has, of course, been no infrastructure bill; in fact, the Trump administration’s repeated proclamations of “Infrastructure Week” have become a running joke.

Policy wonks are still poring over the latest Trump budget, released on Monday, but there was no hiding the same reverse Robin-Hoodism as in previous budgets: taking from the poor and middle class while giving to the rich.

In other words, Trump in practice, as opposed to Trump in pretense, has turned out to be every bit as committed to trickle-down economics as Republicans in Congress have been for decades.

People often say that Trump has captured the G.O.P., which is true as far as things like rule of law and support for democracy are concerned. But it’s equally true that the G.O.P. has captured Trump when it comes to domestic policy.

The only difference between Trumpism and the proposals of Paul Ryan in his heyday is that the Trump administration — having blown up the budget deficit from less than $600 billion to more than $1 trillion — has pretty much given up even claiming to care about government debt. Back in the day, Ryan called debt an “existential threat”; a few days ago Vice President Mike Pence told CNBC that rising deficits aren’t a concern as long as they help boost the economy.

And as I wrote last week, the economic good news of recent years — not as good as Trump claims, but the economy has indeed been strong — largely reflects the reality that after hobbling the economy with fiscal austerity under Barack Obama, Republicans have embraced runaway deficit spending under Trump.

But while Trump is willing to run trillion-dollar deficits to give giant tax breaks to corporations and the wealthy, he’s as determined as the rest of his party to make life harder for the less fortunate. The grand plan to repeal Obamacare fell just short, but the administration is supporting a court challenge that could declare the Affordable Care Act unconstitutional. It is also supporting things like work requirements for food stamps and block grants that would de facto lead to major cuts in Medicaid compared with current law.

But why has Trump turned out to be such a conventional Republican? My sense is that he doesn’t really care about policy, aside from protectionism, which I’ll get to in a minute. And he certainly doesn’t feel any empathy for less fortunate Americans, or actually anyone. So he was happy to make what amounts to an implicit deal with the Republican establishment: You get to implement your usual policy agenda, and I get a free pass on my corruption and abuse of power.

The one place where Trump has deviated from conservative orthodoxy is his trade war. But why is he a self-proclaimed Tariff Man?

The supposed reason was that he wanted to bring back U.S. manufacturing. If that were really his motivation, he failed: Amid a generally strong economy, we’re experiencing a manufacturing recession, and estimates from the Federal Reserve suggest that Trump’s tariffs, which have raised business costs, have actually reduced manufacturing employment.

My guess, however, is that Trump’s trade policy has been motivated less by any substantive goals than by the desire to look like a tough guy. And while establishment Republicans headed off any important changes in NAFTA, which would have been really bad for business — Trump basically took the existing agreement and stuck his name on it — they have been willing to indulge his posturing on other, less critical fronts.

The question now is whether Trump will pay any price for betraying all his promises. Democrats took the House in 2018 largely because of the popular backlash against his attempt to destroy Obamacare. But there’s a real danger that Democrats will blow the election by making it a referendum on ambitious ideas like so-called Medicare for all that are unlikely to become reality, rather than on Trump’s ongoing efforts to destroy programs Americans love.

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Paul Krugman
Paul Robin Krugman (born February 28, 1953) is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, and an op-ed columnist for The New York Times. In 2008, Krugman won the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography.

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