Yes, the stock market is at historic highs. Yes, the economy continues to grow robustly. Yes, employment is really low and wages are beginning to rise. But what else would you expect from the various stimulative policies adopted by President Trump. The massive tax cuts combined with increased federal spending have done wonders for all the indicators (including a massive increase in the annual federal budget deficit). But powerful costs follow as well. As interest rates rise, the burden of carrying increasing annual deficits of a trillion dollars becomes significant. Given the massive deficits, the feds will have less ammunition the next time the economy needs stimulating. Other challenges follow as well. Here are some of them.
‘Anonymous’ Is Hiding in Plain Sight
By Thomas L. Friedman
More and more, I wonder if the disgruntled senior Trump administration official who wrote the anonymous Op-Ed in The Times was actually representing a group — like a “Murder on the Orient Express” plotline where every senior Trump adviser was in on it. Why? Because the article so perfectly captured the devil’s bargain they’ve all struck with this president: Donald Trump is amoral, dishonest and disturbed, a man totally unfit to be president, but, as the anonymous author self-servingly wrote, “There are bright spots that the near-ceaseless negative coverage of the administration fails to capture: effective deregulation, historic tax reform, a more robust military and more.”
That’s the anonymous-G.O.P. credo today: We know Trump is a jerk, but you’ve gotta love the good stuff — you’ve got to admit that his tax cuts, deregulation, destruction of Obamacare and military buildup have fueled so much growth, defense spending and record stock market highs that we’re wealthier and more secure as a country, even if Trump is nuts. So our consciences are clear.
This view is not without foundation. Economic growth and employment have clearly been on a tear since Trump took office. I’m glad about that.
But what if Trump is actually heating up our economy by burning all the furniture in the house? It’s going to be nice and toasty for us — at least for a while — but where will our kids sleep?
What if Trump’s tax cuts, deregulation, scrapping of Obamacare without any alternative and military spending surge were actually ill-thought-through, short-term-focused initiatives that all ignored expert opinion — because they mostly emerged from off-the-cuff remarks at Trump pep rallies — and collectively amount to a sugar high that not only will be unsustainable but will leave our economy far more vulnerable in the long term?
Let’s take that view for a spin: I favor corporate tax cuts — big ones. But I would have offset them with a carbon tax, a tax on sugar and a small financial transaction tax. That way, we’d unleash the energy of our corporations while mitigating climate change, spurring the next great global industry — clean power — curbing childhood asthma and diabetes and not adding to our national debt, thereby making ourselves more resilient as a country.
When Trump simultaneously cuts corporate taxes and withdraws America from the Paris climate accord, tries to revive the coal industry by lowering pollution standards and weakens fuel economy standards for U.S.-made cars and trucks, he is vastly adding to the financial debts and carbon debts that will burden our children.
And he is doing this despite many economists warning that increasing the deficit when your economy is already growing nicely is really, really reckless — because you may need that money to stimulate your way out of the next recession.
And he is doing this at a time when virtually every climate scientist has warned that global-warming-driven extreme weather events — droughts, floods and wildfires — are sharply on the rise and we are staring through the last window of time to mitigate climate change so that we can manage the impacts that are already unavoidable and avoid the impacts that will be terrifyingly unmanageable.
In June, The Associated Press reported on the latest International Monetary Fund survey of the U.S. economy, which concluded that as a result of Trump’s “tax cuts and expected increases in defense and domestic programs, the federal budget deficit as a percentage of the total economy will exceed 4.5 percent of G.D.P. by next year — nearly double what it was just three years ago.” Such a “big boost … has not been seen in the United States since President Lyndon Johnson in the late 1960s boosted spending on the Vietnam War at the same time it was adopting Johnson’s Great Society programs.”
Faced with so much debt, which the country will not be able to grow out of, The A.P. story continued, paraphrasing the I.M.F. report, the U.S. “may need to take politically painful steps,” such as cutting Social Security benefits and imposing higher taxes on consumers. (We’ll probably also have to limit spending on new roads, bridges and research.)
You might want to let your kids know that.
You might also want to share with your kids the recent study from a group of Australian climate scientists who modeled the damage to different economies if we don’t work together to achieve the Paris climate accord’s goal of limiting the increase in global average temperature by 2100 to less than two degrees Celsius above pre-industrial levels.
The rise in sea level will require massive movements of people and cities, and the soaring heat levels will cause losses in agricultural productivity and declines in human health across the globe. As a result, the study found, the economic impacts of ignoring the Paris limits will be “comparable to the Great Depression of the 1930s, with its global fall in G.D.P. of 15 percent, except these will occur year after year, with no way for effective redress. … Many governments around the globe won’t be able to cope and will, to put it simply, fail.”
There were responsible ways to cut taxes on things we want more of — like corporate investment — while boosting them on things we want less of — like carbon, reckless financial speculation and diabetes — that could have stimulated jobs and growth but also left us more financially and environmentally resilient. But both Trump and the anonymous-G.O.P. crowd rejected them, just as they rejected smart improvements to Obamacare, preferring a total scrapping.
So when Republicans say they’re disgusted by Trump’s ignorance and indecency but love his “deregulations” and “tax reforms” — those very sanitized words — this is what they love: taking huge fiscal and environmental risks — effectively throwing away our bumpers and spare tires that we may soon need to drive through the next financial or climate storm — for a short-term economic and political high.
How different is that from Trump’s indecency? Let’s be clear, Trump cheated on his wife, but his party’s now cheating on their kids. You tell me who’s worse.
And don’t get me started on the recently signed $716 billion defense budget for the 2019 fiscal year — a spending hike so dramatic, as defense analyst Lawrence Korb pointed out, that it means since Trump took office under two years ago, “the defense budget will have grown by $133 billion, or 23 percent.” And there’s no major war going on.
Here again, the anonymous-Republicans equate a bigger defense budget and more weapons with strategy and strength. Thus, by definition, if Trump increased defense spending, he did something right. Did I miss the series of congressional hearings with independent military experts that addressed the question: What are the new (and old) threats we’re facing today, and how will these new and vastly expensive weapons systems enable us to better address them?
Some of the smartest military analysts I know think that investing in so many big, new weapons systems is the equivalent of taking sledgehammers to droplets of quicksilver, considering that so many enemies we face today are super-empowered individuals or nations that have opted to hurt us with cheap cyberweapons and cheap but massive swarming tactics.
Did any of these Republican lawmakers take note of the Iranian naval exercise in the gulf in August? The Iranians took some big old ships from the shah’s days and said “you will be the American Navy.” And then they used swarming tactics to ravage those big ships — deploying scores of very small, cheap speedboats and kamikaze coastal craft, armed with light missiles and rocket-propelled grenades.
John Arquilla, a senior strategist at the Naval Postgraduate School, likes to say that in today’s networked world — where ISIS was buying drones from online shopping sites and turning them into aerial grenade launchers — “many and small can beat few and large.”
The Chinese, he notes, “are building sea power without a traditional navy,” focusing on building hundreds of cheap, small missile and torpedo boats to take on our multibillion-dollar aircraft carriers and flotillas. Moreover, Arquilla notes, “when you have such a massive defense budget, you don’t have to ask yourself hard questions” such as: What the hell are we still doing in Afghanistan after 17 years of “failing to reroute the currents of history and culture there and make the place into a democracy by armed force?”
In sum, I believe in a robust military and U.S. global engagement. But this does not automatically translate into support for a radically higher defense budget.
So the next time anonymous-G.O.P. lawmakers tell you that while Trump is a moral wreck — and they are saving the nation from his wretchedness — they love his tax cuts, deregulation and military budget, ask them to describe the strategic vision behind that defense budget. Ask them if they really are unbothered by massively increasing the deficit at a time when our economy was already growing — just when we should be saving cash to soften our next recession. Ask them if they really think it is smart to roll back our auto mileage standards, when the last time we did that the more fuel-efficient Japanese and Korean auto industries nearly killed Detroit.
Lastly, ask them if they have kids — and how they think all these Trumpian policies that they like, even if they don’t like Trump, will serve the next generation.
Thomas L. Friedman is the foreign affairs Op-Ed columnist. He joined the paper in 1981, and has won three Pulitzer Prizes. He is the author of seven books, including “From Beirut to Jerusalem,” which won the National Book Award. @tomfriedman • Facebook
Posted at https://www.nytimes.com/2018/09/11/opinion/anonymous-op-ed-republican-party-trump.html?action=click&module=Opinion&pgtype=Homepage