Regionalism, and redistribution through the medium of job creation, says I, in my latest Bloomberg column. Now, I don’t think that will work, given the current configuration of ideas and personnel and the weakness of the procedural in recent times. Still, I think people are underestimating how much the underlying policies pose a potential danger to the redistributive program of the Left. On the border adjustment tax:
As a libertarian-leaning economist, I don’t favor either of those changes, or their combination, but still there is a logic here worth considering. Think of this policy as taxing the consumption of elites and throwing that money, and more, at job creation, in this case through corporate subsidies. It’s a bigger and bolder gamble than just making some marginal adjustments in current transfer payments. In essence Trump has outflanked the left by packaging plans for redistribution of wealth with a revamped mercantilism, combined with a macho mood, media-baiting and incendiary rhetoric about who deserves what. It is an underlying fear of the left that a right-wing-flavored redistribution might prove more popular with voters than the left’s preferred egalitarianism and identity politics.
There are further points, including a discussion of why the Obamacare replacements are not nearly as stupid as they sound. But here is my summary:
I still think Trumponomics won’t work. It is too divisive; it will be applied politically, targeting favorites and enemies, rather than in accord with the dictates of efficiency; it may destroy rather than create jobs on net; and most of all it badly damages the U.S.’s global reach by cooperating less on issues of trade and migration. I think of the program as a whole as cashing in on the capital asset of America’s foreign reputation and redistributing some of those rents to Trump-supporting regions. That is a form of shortsightedness, and a sign of the decay of our republic.
Mr Navarro said one of the administration’s trade priorities was unwinding and repatriating the international supply chains on which many US multinational companies rely, taking aim at one of the pillars of the modern global economy.