Upending The Trade Debate
President Donald Trumps approach to trade weakened key alliances, destroyed jobs and damaged the U.S. economy. It was as if he had used a sledgehammer for heart surgery. But Trump also changed the debate about nonmarket behavior like state subsidies and that was long overdue.
Advanced economies have experienced massive surges in imports from low-wage countries in the past half-century. This is partly a natural result of nations integrating into the global economy under the relative peace maintained by American military might. Export-led growth helped eradicate poverty. But U.S. manufacturers became an open target, some argue, with cheap rival imports overwhelming aging marquee American industries.
Developing nations like China, India and Indonesia created a latecomers quandary for advanced economies. They entered the global trading system after the United States and its allies drastically lowered tariffs on manufactured goods for all members of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization. This left rich countries with little leverage to entice newer members to let go of the production subsidies they still view as key to their miraculous rise from poverty.
No one has had a good solution. Some allies quietly let the problem slide. Trumps trade war made that impossible.
Shouldn’t Be A Surprise
For the past two years, we’ve been tracking the sudden and unexpected rebound that’s occurred once Trump started to undo and reverse those Obama-era anti-growth policies.
Last week, in fact, we pointed out that our own polling shows a sharp increase in the public’s estimation of their own quality of life under Trump.
It’s a safe bet that had a Democrat been in the White House over the past two years things would be different. Front pages would cheer the good news. Broadcasters would lead with it each night.
Then again, there wouldn’t be any middle-class revival if a Democrat had been in the White House over the past two years.
YOU MIGHT ALSO LIKE:
Working To Block Access To Birth Control
Contraceptives treat medical issues like ovarian cysts and reduce the risk of unplanned pregnancies. Certain types, like IUDs, can cost as much as $1,300 to insert. In 2011, the Obama Administration issued guidance requiring insurers to cover contraception, but rules pushed by the Trump Administration would expand exemptions for employers who object on religious or moral grounds. If Trump prevails in an upcoming Supreme Court decision, more than 100,000 women could lose access to their birth control.
Don’t Miss: How To Thank President Trump
Redirecting Middle East Diplomacy
Donald Trump was far less interested in a two-state solution to the Israeli-Palestinian conflict a struggle that has outlasted every postwar president and far more in a 22-state outcome, normalizing Israels relations with the Arab world, especially Persian Gulf countries. Building on ties between Israel and key gulf states that had been developing for two decades, and propelled by a common interest in restraining Irans regional ambitions, the Trump administration invested heavily in cultivating close personal relationships with leaders of Bahrain, Saudi Arabia and the United Arab Emirates. It approved weapons sales to those nations, exerted maximum pressure on Tehran and served as a facilitator between gulf Arab nations and Israel.
The costs of such an approach were clear. The Israeli-Palestinian issue wasnt so much ignored as it was undermined by a Trump peace plan comically biased in favor of Israel, leaving it dead on arrival. Meanwhile, Trumps catering to Saudi Arabia allowed its reckless and ruthless crown prince to pursue a disastrous war in Yemen and repression at home with tacit American support. Washington also recognized Moroccan sovereignty over the disputed Western Sahara region in a questionable quid pro quo that helped spur Morocco to begin establishing diplomatic ties with Israel.
Constructing New Barriers For Migrants
Getting a green card is likely getting harderespecially for people from poor countries. In January, a divided Supreme Court gave the Trump Administration permission to enforce a new rule that gives U.S. Citizenship and Immigration Services officers greater authority to deny certain green-card and visa applicants who have limited financial resources.
Since 1999, an individual who was primarily dependent on the government to sponsor their income or to pay for their institutionalized care has been considered a public charge. Federal officials would consider that dependency when deciding whether to allow them to live in the U.S. But the Trump Administration has made that rule even more stringent, expanding the definition of a public chargeto include applicants relying on combinations of certain benefits like Medicaid, food stamps or housing assistance for more than 12 months in a 36-month period, and even those whose circumstances suggest they may need aid in the future.
Poor migrants who applied for green cards after February are waiting with bated breathand hoping that hes wrong.
Read Also: Is There A Republican Running Against Trump
How Trump Has Betrayed The Working Class
Trumps corporate giveaways and failure to improve the lives of ordinary working Americans are becoming clearer by the day
Trump is remaking the Republican party into what?
For a century the GOP has been bankrolled by big business and Wall Street. Trump wants to keep the money rolling in. His signature tax cut, two years old last Sunday, has helped US corporations score record profits and the stock t reach all-time highs.
To spur even more corporate generosity for the 2020 election, Trump is suggesting more giveaways. Acting chief of staff Mick Mulvaney recently told an assemblage of CEOs that Trump wants to go beyond his 2017 tax cut.
Trump also wants to expand his working-class base. In rallies and countless tweets he claims to be restoring the American working class by holding back immigration and trade.
Most incumbent Republicans and GOP candidates are mimicking Trumps economic nationalism. As Trump consigliere Stephen Bannon boasted recently: Weve turned the Republican party into a working-class party.
Keeping the GOP the Party of Big Money while making it over into the Party of the Working Class is a tricky maneuver, especially at a time when capital and labor are engaged in the most intense economic contest in more than a century because so much wealth and power are going to the top.
Recommended Reading: What Does Impeachment Mean For Trump
Blocking Trans Troops From The Military
With a trio of tweets in 2017, Trump declared he was rolling back an Obama-era policy that permitted transgender Americans to openly serve in the military. The Armed Forces cannot be burdened with the tremendous medical costs and disruption, Trump wrote.
But implementing the new policy turned out to be more complicated than posting it on social media. What ensued was a series of court orders that barred the change. The Administration pushed forward anyway and was granted approval from the Supreme Court to proceed on an interim basis. Now anyone who has medically transitioned or is currently transitioning is disqualified from enlisting. Individuals who are currently serving in the military but were diagnosed with gender dysphoria after April 2019 must serve in the sex they were assigned at birth, seek out a series of complex waivers or leave.
House Democrats have challenged the ruleas has public opinion: 71% of adults now support the right of openly transgender people to serve, according to Gallup.
Don’t Miss: Where Can You Buy Trump Hats
New Concerns Over American Democracy
Throughout his tenure, Donald Trump questioned the legitimacy of democratic institutions, from the free press to the federal judiciary and the electoral process itself. In surveys conducted between 2016 and 2019, more than half of Americans said Trump had little or no respect for the nations democratic institutions and traditions, though these views, too, split sharply along partisan lines.
The 2020 election brought concerns about democracy into much starker relief. Even before the election, Trump had cast doubt on the security of mail-in voting and refused to commit to a peaceful transfer of power in the event that he lost. When he did lose, he refused to publicly concede defeat, his campaign and allies filed dozens of unsuccessful lawsuits to challenge the results and Trump personally pressured state government officials to retroactively tilt the outcome in his favor.
Most Americans placed at least some blame on Trump for the riot at the Capitol, including 52% who said he bore a lot of responsibility for it. Again, however, partisans views differed widely: 81% of Democrats said Trump bore a lot of responsibility, compared with just 18% of Republicans.
Restoring American Leadership Abroad
Restored Americas leadership in the world and successfully negotiated to ensure our allies pay their fair share for our military protection.
- Secured a $400 billion increase in defense spending from NATO allies by 2024, and the number of members meeting their minimum obligations more than doubled.
- Worked to reform and streamline the United Nations and reduced spending by $1.3 billion.
- Allies, including Japan and the Republic of Korea, committed to increase burden-sharing.
- Protected our Second Amendment rights by announcing the United States will never ratify the UN Arms Trade Treaty.
- Returned 56 hostages and detainees from more than 24 countries.
- Worked to advance a free and open Indo-Pacific region, promoting new investments and expanding American partnerships.
Advanced peace through strength.
Renewed our cherished friendship and alliance with Israel and took historic action to promote peace in the Middle East.
Stood up against Communism and Socialism in the Western Hemisphere.
You May Like: How To Call Donald Trump
People Are Also Reading
Trump said he would bring back manufacturing to the United States but his tariffs have done just the opposite. Sorely needed infrastructure repair was a top priority. Not a word about it.
He said drug prices would decrease, but Trumps latest proposal would increase prices and bring back pre-existing conditions.
Hes abandoned our allies around the world and sided with our enemies, especially Vladimir Putin.
He promised a wall that Mexico would pay for. And what may be the greatest crisis of our time, climate change has been totally ignored in favor of greed.
But most of all, because he is a compulsive liar, and because of his attacks against American institutions like the FBI and his ties to enemy countries, he has demeaned the office of president to its lowest level since the Nixon administration and possibly worse.
America has certainly not become great or even good again for the middle class under Trump!
John W. Kowalski
Looking Forward To Wage Growth In 2018
In light of all the Trump administrations so-called victories, wage growth has stagnated. And luckily, this has been acknowledged within the Trump administration.
Kevin Hassett, the chairman of the presidents Council of Economic Advisers told NPR, Wage growth was not as strong as wed like to see itWe fully expect that thats going to accelerate next year if the tax bill passes. Now that the tax bill has passed, all Americans can hope to see wages grow.
Don’t Miss: What Are Trump’s Policies
Ten Ways To Make Life Better For The Middle Class
Editor’s Note:
These policy ideas are adapted from A New Contract with the Middle Class
The presidential debates are upon us: President Trump and former Vice President Biden face-off for the first time on September 29. The stakes are high. This year has been wrought with tragedy and hardship for many Americans, and the brokenness of our society is more visible than ever. Not only has COVID-19 affected the countrys health, but it has also hit the labor market hard, leaving many Americans out of work and struggling to balance their finances, child care, and mental well-being.
No doubt, these issues will be top-of-mind for the presidential candidates, especially in their first debate when COVID-19 and the economy are two of the topics for discussion.
But while the challenges are great, so too the prospects for serious reform. The Future of the Middle Class team proposes ten policies, adapted from A New Contract with the Middle Class, that, if implemented, would improve the quality of life for middle-class Americans across five key dimensions money, time, relationships, health, and respect.
The 2017 Tax Law Doesnt Help The Middle Class
The new tax lawknown as the Tax Cuts and Jobs Act will exacerbate this trend. The benefits of the law tilt toward the well-off both now and in the future, according to the distributional analysis of the Tax Policy Center. By 2027, benefits of the tax law flow entirely to the rich.
To be fair, Republicans hope to extend the tax law beyond 2027, but thats highly unlikely. There is also an argument that increased investment will lead to higher wages in the long run. The theory is that the lower corporate rate and temporarily expanded business expensing will spur investment in the United States, leading to more capital, and more productive workers. As worker productivity rises, firms will boost wages. All of this would happen gradually over the long term.
Don’t Miss: What Are The Polls For Trump
Changes To The Tax Code
President Trump signed the Tax Cuts and Jobs Act into law on Dec. 22, 2017, bringing sweeping changes to the tax code. How people feel about the $1.5+ trillion overhauls depend largely on their opinion of Trumps presidency. Individually, how the changes were felt depended on factors like income level, filing status, and deductions. Those living in a high-tax state with soaring property values may have paid more in taxes in 2019.
For the wealthy, banks, and other corporations, the tax reform package was considered a lopsided victory given its significant and permanent tax cuts to corporate profits, investment income, estate tax, and more. Financial services companies stood to see huge gains based on the new, lower corporate rate , as well as the more preferable tax treatment of pass-through companies. Some banks said their effective tax rate would drop under 21%.
Given the popular criticism of the tax overhauls disparities, coupled with GOP losses in the 2018 midterm elections, as well Trumps potential trade war muting the benefits of the tax cuts for voters, there were discussions surrounding tax reforms. The reforms could make individual tax cuts permanent and encourage retirement savings and business innovation. More on that later.
Tax Relief For The Middle Class
Passed $3.2 trillion in historic tax relief and reformed the tax code.
- Signed the Tax Cuts and Jobs Act the largest tax reform package in history.
- More than 6 million American workers received wage increases, bonuses, and increased benefits thanks to the tax cuts.
- A typical family of four earning $75,000 received an income tax cut of more than $2,000 slashing their tax bill in half.
- Doubled the standard deduction making the first $24,000 earned by a married couple completely tax-free.
- Doubled the child tax credit.
- Virtually eliminated the unfair Estate Tax, or Death Tax.
- Cut the business tax rate from 35 percent the highest in the developed world all the way down to 21 percent.
- Small businesses can now deduct 20 percent of their business income.
- Businesses can now deduct 100 percent of the cost of their capital investments in the year the investment is made.
- Since the passage of tax cuts, the share of total wealth held by the bottom half of households has increased, while the share held by the top 1 percent has decreased.
- Over 400 companies have announced bonuses, wage increases, new hires, or new investments in the United States.
- Over $1.5 trillion was repatriated into the United States from overseas.
- Lower investment cost and higher capital returns led to faster growth in the middle class, real wages, and international competitiveness.
Jobs and investments are pouring into Opportunity Zones.
You May Like: Who Does Trump Donate To
Reasons Trump Is Winning The Hearts Of The White Lower
Donald Trump appears likely to be the Republican candidate for president. This does not mean that he will become president, but it does mean that he mig
Many criticize that his supporters tend to be less educated, less well-off, and white. This has become a central, disaffected class in the United States, and while focus has been on other groupsTrump has spoken to this one.
This is the underlying reason why Trump has been leading polls.
What exactly makes Trump so popular among poorer, less educated white voters? Here are 7 reasons this demographic has flocked to him
Uncovering The Good News
So here comes USA Today, which admits that the middle class has actually seen, in its words, a “revival” under Trump.
“The vibrant economy, juiced further by the Trump-led tax cuts and federal spending increases, has lifted employment and wages for workers at all levels, including the middle class.”
Shocking news to anyone who gets their news from the mainstream press. But the story goes on to note that:
- “Median U.S. household income rose 1.8% to an all-time high of $61,372 in 2017.”
- “Employers added an average 223,000 jobs a month last year, up from 179,000 in 2017. And unemployment sank to a near 50-year low.”
- “Average U.S. wages climbed 3.3% in 2018, after being stuck at 2.5% to 2.7% for several years.”
- “Industries that employ middle-class workers in particular are benefiting. Manufacturers have added about 450,000 jobs since Trump took office, the largest two-year total in decades.”
- “The number of factory jobs ‘reshored,’ or shifted to the U.S. from overseas hit a record 170,00 in 2017.”
Check out IBD’s Stock of the Day … every day!
To be sure, USA Today only mentions these gains so it can then paint a dark picture for the middle class on the horizon. Nevertheless, the fact that the paper was willing to admit to a middle-class revival under Trump is in itself newsworthy.
Don’t Miss: Will Trump Win 2020 Poll
