Article: "Trump's Biggest Economic Legacy Isn't About the Numbers," The New York Times, October 24, 2020
The above article indicates that voters continue to rate the economy as the best aspect of Trump's presidency. Before the pandemic, the United States had record low unemployment, increasing incomes, and rising investment. But, the author of the article argues, this will not be Trump's legacy, no matter whether he wins or loses the election.
Trump's main economic legacy will the tonal shift he caused in economic discussion within both parties. Previously, both Democrats and Republicans emphasized the positive effects of trade deals, largely ignoring the complaints from their rank and file supporters that globalization meant fewer American manufacturing jobs. Now, after nearly four years of Trump, both major parties have begun to backtrack on globalization. Even Joe Biden, who is not nearly as keen on striking "deals" to benefit American workers, has a plan to keep manufacturing at home.
Further, Trump has ended much of the hesitancy within the Republican party about deficit spending. Of course, Republicans had long in fact been in favor of deficit spending (so long as it was on grossly disproportionate "defense" spending), but Trump has emboldened Republicans to admit that deficits do not matter in the short term.
I find the former shift to be rather short-sighted. Both parties need to concentrate on helping workers adapt to the disruption that will come with increased automation, decentralized work, and businesses that will look remarkably different from those of the 20th century. We should not stifle long term growth in an attempt to realize a completely romanticized version of the past.
As for the latter, this is a welcome realization. So long as the parties are not too exuberant in their spending, spend on the right things, and recognize the long term consequences of deficit spending (which, of course, is asking for more than a lot), the deficit should not be much to worry about.
What do you think? Is the backlash against free trade justified? What about the new attitude toward deficits?
I think your points are very well articulated. As for deficits its true that they do not matter in the short run but at some point the long run will have consequences for the short run. If they continued to ignore the deficit problems will start to arise. I also think that free trade is better than trade wars because at least we won't be hurting our own exports.
ReplyDeleteI found this read interesting and agree with Wyatt that having deficits, in the long run, will begin to create problems. Furthermore, from what was mentioned above, I think it will be interesting to see what happens to the economy under whichever person is elected. For example, if Biden is elected will he follow through with a plan to keep manufacturing at home, or is this an empty promise to win support? If Trump is re-elected, will he continue to increase the deficit, will trade wars eventually end? Then overall, no matter who wins, what will the recovery end up looking like for the country?
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