In the long term, we should see little change to the economy’s

In the long term, we should see little change to the economy’s

Democracy’s under attack

canada goose store President Trump delivers remarks on the economy canada goose from the South Lawn of the White House, in Canada Goose Parka Washington. canada goose store

cheap Canada Goose How can this be, they ask, given the reckless, chaotic leadership of the Trump administration? How could we possibly be closing in on full employment and posting strong GDP growth amid the incessant lying, snuggling up to anti democracy tyrants, protectionist trade policy, profligate fiscal buy canada goose jacket cheap policy, punishing immigration policies, haranguing the Federal Reserve, and so on ad nauseam? Is this sustainable, they wonder? Will strong economic tail winds propel Trump and the Republicans to further political dominance? cheap Canada Goose

canada goose clearance sale Could it really be that canada goose uk shop democracy dies in darkness, yet capitalism somehow uk canada goose flourishes? canada goose clearance sale

Canada Goose Jackets These are tough, important questions that will take more than one column to get through, though I’ll lay canadian goose jacket out my general take herein. To telegraph the punchline, canada goose store history is littered with failed states that made all the above mistakes, Canada Goose Outlet but the paths they took to get there can be long and crooked, with volatile and unpredictable politics. Canada Goose Jackets

canada goose coats on sale In this first installment, I’ll focus on presidents’ impact of growth and distribution over the near and canada goose uk black friday long term, starting with the (admittedly reductionist) 2X2 grid shown below. canada goose coats on sale

canadian goose jacket Trump inherited an economy that was well into a solid expansion, and in such times, economic policy often has more to do with the distribution of growth than it does with growth itself (though Trump’s an exception here, as I’ll show in a moment). Presidents always take credit for growth on their watch, though Trump, against the evidence, pretends things were awful until he got here. But growth’s key longer term determinants productivity of businesses and the size and skills of the labor force are slow moving forces that don’t immediately change due to election outcomes. canadian goose jacket

buy canada goose jacket In this sense, high level economic policy can be thought of as being like an airplane flight. When you’re cruising at 30,000 feet in smooth weather, the pilots don’t have Canada Goose Online that much impact on the quality of your flight, which is much more a function of how the airline treats its passengers. buy canada goose jacket

Canada Goose online Trump’s “+” for near term growth refers to the tax cuts canada goose coats and other deficit spending that are adding significantly to current growth canada goose clearance sale rates, boosting GDP growth by somewhere between half and one percentage points this year and next. His Canada Goose sale trade war pushes the other way on near term growth, though its negative impacts will likely be smaller, at buy canada goose jacket least in a macro sense (specific industries, like agriculture exporters, are hurting), than the fiscal stimulus. Canada Goose online

Canada Goose Parka In terms of near term distribution, Trump gets a negative. His tax cuts are highly regressive and his attacks on the safety net and health care will exacerbate market driven inequalities. Canada Goose Parka

canada goose In the long term (row 2 in the grid), starting canada goose coats on sale with growth, once the fiscal stimulus fades, growth will slow. But presidential policies can invest in public goods that expand the economy’s capacity, through public goods like infrastructure and human capital. Through trade and immigration policy, they can affect both longer term growth and distributional outcomes. canada goose

Canada Goose Outlet Though he campaigned on infrastructure investment, uk canada goose outlet Trump has no such plan and chose to spend his political capital and revenue on tax canada goose outlet cuts instead. As for other pro growth policies, Trump’s budget disinvests in education, from pre school to college, and working training. As Canada Goose Jackets economist Jason Furman recently argued, canada goose factory sale Trump’s antipathy to immigrants is also likely to hurt longer term growth. Canada Goose Outlet

canada goose clearance As per long term distributional outcomes, Trump’s tax cuts are particularly damaging, as their benefits to the wealthy grow over time relative to those for the middle class. Trump and the Republicans’ attacks on the safety net and Obamacare threaten to generate long term, negative distributional outcomes. (The Times’ David Leonhardt, who’s not given to hyperbole, called Obamacare “the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.”) Not only is Trump failing to challenge the long term shift in bargaining power away from workers that I view as central to the inequality problem, but his deregulatory agenda and corporate canada goose uk outlet power over all court picks will exacerbate these imbalances. canada goose clearance

canada goose deals Simply put, Trump’s juicing the near term economy with fiscal stimulus while exacerbating near and longer term inequality and failing to invest in longer term economic capacity. If that diagnosis is correct, in the near term we should see robust near term growth (check) that fails to reach most people (also check). In the long term, we should see little change to the economy’s underlying growth rate, certainly nothing like the 3, 4, and 5 percent rates Trump prattles on about. canada goose deals

Canada Goose sale In other words, capitalism won’t flourish in Trumpian darkness, but neither will it crumble, at least in the near term. Trump’s disinvestment agenda bodes ill for future growth, but that’s some way off. There’s a recession out there somewhere and when the plane hits turbulence, the pilots’ skills matter, but one hopes it wouldn’t take a downturn to canada goose black friday sale reveal the dangers of inept leadership. Canada Goose sale

canada goose coats The problem is politics. When Trump supporters actively hurt by his policies the tariffs, undermining Obamacare still pledge their undying support, the old Clintonian “it’s the economy, stupid” is no longer operative. Thus far, he’s convinced enough voters that any bad economic outcomes are due to our European foes, immigrants, terrible trade deals, anyone who doesn’t look like them, the Fed, etc. In the long run, a strong quarter of GDP growth means little compared to the loss of fact based, representative democracy canada goose coats.