With Trump, the Republicans lose

The absence of the anticipated Republican “red wave” in the US midterm elections may be the moment the party finally realizes that former President Donald Trump is an electoral drag. Lasting political success is based on strong and effective policies that improve the lives and economic prospects of voters

Washington DC – The Republican Party fared poorly in this year’s US midterm elections, with candidates most closely linked to former President Donald Trump faring the worst. Perhaps with the absence of the expected “red wave” the party will finally understand that Trump is an electoral ballast.

Trump’s economic policies were not a significant factor in the party’s poor performance, but they didn’t help either. Trump’s economic style is a false populism that offers empty promises to the working class, as if anger and complaining are adequate substitutes for higher wages and better opportunities.

During his presidency, Trump fell short of typical workers and households. His corporate tax cuts in 2017 pushed up wages because they increased incentives to invest in productivity improvements… but he countered the good of those cuts with his destructive trade war, which reduced investment . In addition, the trade war reduced manufacturing employment. Even that favored group of voters did not benefit.

America’s workers and households want more and better job opportunities, lower drug prices, increased efficiency and innovation in health care, and better schools. Instead, Trump offered a populist cry, seizing on anger and angst stemming from the clash between the long-term decline in manufacturing employment, the slow recovery from the 2008 financial crisis and Great Recession, and cultural grievances.

The Republican Party should have turned the page a long time ago. Lasting political success is based on sound and effective policies whose positive economic results are perceived by the public. Republicans need a post-Trump policy agenda for growth and participation.

That agenda should be the vehicle for communicating traditional conservative commitments in economic terms – to free enterprise, individual liberty, personal responsibility and economic opportunity – as well as offering concrete solutions to real economic challenges.

This doesn’t mean reversing the party’s working-class focus during the Trump era, but it does mean adding some real politics to the pro-labor rhetoric.

Those policies should include the expansion of federal income subsidies, such as earned income tax credits (which reduce poverty and increase employment, because they boost the financial returns of work). By introducing supply-side reforms to the commercial childcare sector, the Conservatives could lower prices and expand access to services. That way it would be easier for parents to work.

Well-designed worker training programs—combining occupation-specific skills and “soft skills” development and comprehensive services, such as daily living skills training and job placement and retention services—have been shown to generated substantial and lasting increases in revenue. For a pro-labor party, finding ways to scale up those programs should be a top priority.

A longer academic year and more class hours per day would help offset the devastating effects of learning loss from the pandemic due to school closures and online teaching. It would also make it easier for parents to go to work. And it would be pro-workers: if the skills of today’s students are increased, tomorrow’s workers will be more productive and their salaries will be higher.

There is scope in this agenda to cater to populist and anti-elitist sentiment. The power of employers in labor markets, non-competitive clauses in employment contracts, and restrictions on occupational licenses favor those who already have them and large companies over workers. We must weaken those barriers to opportunities.

To support economic growth, the United States needs more workers, including foreigners. Reasonable people may disagree about the appropriate number of green cards and work visas the country should issue each year, but Trumpist nationalism demonizes immigrants and hangs a “no immigrants accepted” sign from the Statue of Liberty. immigrants”. This reduces the attractiveness of the United States as a destination of choice for many of the world’s most ambitious, risk-tolerant, and hard-working people.

Beyond worker-specific policies, Tories must support an agenda that encourages long-term prosperity. This should not focus on deficit-financed individual income tax cuts, but on income-neutral tax reform that would increase economic efficiency and reduce “shadow spending,” such as mortgage interest deductions, which it is given through the tax code and disproportionately benefits high-income households.

Expiring provisions of the 2017 Trump tax law must be extended to boost productivity, wages and economic growth. To encourage innovation and new inventions that encourage lasting prosperity, conservatives should support additional incentives for corporate research and development, and federal support for basic research.

Industrial policy, protectionism and obsession with manufacturing jobs will not create the results needed to achieve lasting political victories. More importantly, they will not lead to long-term prosperity or solve the immediate problems facing workers and households.

Enough of walls. Enough of rhetoric and insubstantial symbolism. Enough of nostalgia for an imaginary past. Conservatives should embrace economic growth rather than downplay its significance. They should encourage participation in economic life rather than indulge in a victimization narrative. Conservatives should be optimistic about the future instead of fearing it.

The author

He is director of Economic Policy Studies at the American Enterprise Institute.

Copyright: Project Syndicate, 1995 – 2022

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