No-one wants to talk about anything except the US elections, and there is nothing sensible to say about them. The Republican Party of better days, of entrepreneurship and energetic defense, seems to have been kidnapped by space aliens and replaced by Pod People. The aliens have kidnapped not just the party apparatus, but the party base as well. What do the Republicans want? The operative answer is “none of the above,” namely a candidate without a verifiable track record–a Donald Trump, a Ben Carson, a Carly Fiorina.
According to the Pew Institute, 65% of Republicans in September preferred “new ideas and a different approach” to “experience and a proven record.”
The Republicans don’t want aggressive reduction in the size of government: the one-issue Tea Party movement had a brief rally around the estimable Sen. Ted Cruz and fizzled out. That was inevitable, given that the federal deficit has shrunk from 10% of GDP in 2010 to about 3% at present, not much more than when George W. Bush held office. With the 10-year government bond yield below 2%, financing the government debt is the least urgent issue on the economic agenda.
They don’t want supply-side measures to stimulate entrepreneurship, despite the best efforts of Reagan-era stalwarts like Steve Forbes, Lawrence Kudlow Art Laffer and Steve Moore–my old comrades-in-arms–to keep the Reagan flame alive. I agree with them. Supply-side is the ship with which I will go down. The trouble is that the voters don’t seem to be interested. No American under 40 remembers what it was like to live in an entreneurial economy, in the days when business startups created jobs, and tech companies were run by creative engineers rather than paten trolls. The past two generations of entrepreneurs–the dot.com promoters of the 1990s and the housing-bubble types of the 2000s–were carried out in body bags along with the portfolios of their investors.
At the peak of the Reagan recovery, two businesses opened for every one that closed. During the “recovery” of 2010-2012, business deaths actually surpassed business births for the first time since the data were kept in 1977. Young Americans are looking for $37,500, health benefits and a retirement plan, not a change to grab the brass ring. Back in 2012, Mitt Romney pitched entrepreneurship, but had the misfortune to wheel out Staples as the poster boy for the concept–a minimum-wage employer whose business consisted mainly of opening boxes from China and putting them on store shelves.
It is impossible to divine from the opinion polls what Republicans actually want.
According to the Pew data, the hot-button issues which voters say are important are the Iran nuclear deal, funding for Planned Parenthood, fighting ISIS, and deporting illegal immigrants. Yet 83% of voters also say that the top is the economy. None of the economic issues, though, turn up on the list of questions that will motivate Republican voters, except for the idea of raising taxes on the wealthy (and it is not clear whether Republicans are against this, like the supply-siders, or for it, like Donald Trump).
There is not a single mention of Obamacare, which a majority of Americans opposed. No Republican candidate dares to run against it. There is no mention of regulatory rollback to benefit small business, which wears a millstone of government mandates. There is nothing about middle-class tax cuts, corporate tax cuts, or any other tangible measure to stimulate economic growth.
Trump has issued a tax program that proposes to reduce the complexity of the tax code and set a cap on the amount of income that Americans will pay as well as a 15% top corporate tax rate. It is not quite clear from the plan what that means, but the idea is reasonable enough.
The trouble is that ideas do not matter at all to Donald Trump, except perhaps for the idea that has occurred to him in the morning and which he will forget by lunchtime. I doubt that Trump has read it.
A high-ranking Israeli official recently asked me to explain Trump; I thought for a moment, and responded, “Imagine if Hitler had liked Jews.”
What Americans really seem to want is someone else to blame for their economic misery. Trump recalls Karl Krauss’ definition of a demagogue, namely someone who tries to sound as stupid as his listeners so that they will think they are smart as he is. He catapulted to the top of the Republican polls by demanding mass deportation of illegal Mexican aliens.
the data show that net immigration from Mexico was negative between 2005 and 2010–that is, more Mexicans left the U.S. than arrived. There are more Hispanics in the labor force, because legal Hispanic immigrants have had more children than non-Hispanics. In 1990, non-Hispanic whites had a fertility rate of 1.7 children per female, vs. 2.9 children for Hispanics. That is why one sees more Hispanics in America. It has nothing to do with immigration.
By the same token, Trump’s claim that Chinese imports are destroying American jobs is contrary to the facts. One could have made that case fifteen years ago. During the early 2000s, U.S. imports from China were growing at 20%-30% a year. Since 2011, imports from China have hardly grown. That’s because China’s currency has appreciated by one-third since 2005 (from 12 cents to the dollar to 16 cents), raising the cost of Chinese goods in the American market.
When you do not know where you are going, any road will take you there. If Republicans don’t believe that entrepreneurship, tax cuts, and regulatory rollback will revive the economy, what do they believe? They do not believe in ideas, so they want someone to believe in–Trump-Fiorina-Carson. Trump would be apocalyptic as president. Since he inherited $100 million from his father in 1977, he has played the equivalent of Monopoly in the real estate market, earning about half as much by some estimates as he would have made by leaving his money in a stock market index fund. Never in his career has he had to build a coalition, persuade a group of stockholders, hold together a board of directors, or listen to anyone’s opinion than his own. Carly Fiorina is a bright woman who broke the glass ceiling at a major American company, but didn’t do a particularly convincing job. Hewlett-Packard was a printer-cartridge franchise masquerading as a technology company, and Fiorina did nothing to improve matters. Dr. Carson has no qualifications except for neurosurgery, and we are (thankfully) not yet in need of his services at a political level.
Because the Republicans do not know who they are or what they want, this American presidential election is less predictable and more volatile than any in living memory. The Republicans aren’t the Republicans any more. One wonders if America is still America.
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