Well it looks like those around Trump who view him as the wrecking ball to enact populism have finally crafted a new economic agenda. Some of it I applaud. Some is utter classist nonsense. It also looks more and more like things we've seen before, here and abroad, that didn't always work out so well.
Some comments on how the GOP is becoming the Nationalist People's Party. LOL (and you MAGArons claim to hate socialism).
I spoke to Sohrab Ahmari, a former Wall Street Journal editorial writer and one of the architects of this new populism, to get his insight into where conservative economics could be headed.
The vision that Ahmari laid out for me was one of a Republican Party that is worker-centric and vastly more pro-union than it is today.
At one point, Ahmari paused and I said, “I can almost hear the CEOs of Amazon and Starbucks having a heart attack listening to this.”
“Let them,” Ahmari shot back. “Let them choke on it.”
More interesting:
They argue that the Reaganite low-tax, low-regulation, free-market ideology has not worked out very well for American workers, but it has worked out enormously well for corporate elites.
This moneyed class, the argument goes, does not live in the same places, or share the same values, as most social conservatives.
The new thinking urges conservatives to reject the kind of traditional, Republican economic dogma championed for decades in Washington by groups like the U.S. Chamber of Commerce and the Business Roundtable.
In its place, the new populists want to bring conservatives together to create a broader coalition, a sort of capitalist worker’s party of America. They also have a specific list of objectives.
In this way, I actually agree as to the cause. The '86 Reagan Tax Reform taxed ordinary income and capital gains at the same rates. That was a move forward. But it was short-lived, and ever since, capital gains have been so favored that it's possible for wealthy to live opulent lives through low cap gains and margin buying while incurring extremely low effective tax rates. The result is that our economy has become a financial economy, not a capitalist society based on production.
Another way to look at this is the old saying that populism comes from real pain, but it rarely has the right solution. I'd add that populism often directionally does point out the cause of the problem, but it often gets lost in the insanity of the passionate zealots (you fools who constantly cry out the "global elites" - I'm talking about you). It's not that there's an elite class that's driving things - it's just not so conspiratorial. Instead, it's a monied class that's largely working toward similar self-interests, gained primarily through a financial economy.
"Work Matters"
I have some affinity with these comments from a key driver of these policies, although not the "across-the-board tariffs."
Cass argues that Republican economic policy has been focused on the wrong goals: lowering prices and increasing consumption.
Instead, he says, Republicans need to focus on production and value creation. “The conceptual shift is the recognition that work matters and production matters,” Cass told me.
“It was absolutely black letter economic doctrine that the point of economic policy was to consume as much as possible. But not all markets are productive markets. And there’s nothing that guarantees that the things that optimize profits are things that are socially beneficial.”
To hear Cass tell it, most of the damage to America’s social fabric has been driven by decades of offshoring in the U.S. manufacturing sector. To solve this problem, he and others like him want to see across-the-board tariffs.
Cass is also harshly critical of Wall Street: “The private equity and hedge fund industries do not generate value,” he said in our recent interview. “They extract value from the economy.”
“Three hundred billion dollars in fees for the hedge fund industry is not $300 billion in value,” he added.
But then it starts to look like "big government."
What Cass and the other new conservative economists have in mind is the use of muscular state power – something once entirely opposed by conservative politicians – to push companies toward a more socially beneficial way of work.
“The goal is to make productive activities more attractive and unproductive activities less attractive,” Cass said.
Cass’ approach to the economy could have stark consequences for Wall Street. He envisions a financial transaction tax designed to make trading assets more expensive and decrease what he sees as the financialization of the economy.
That last comment, decreasing the finalization of the economy, I'm all for that. then irony:
President Joe Biden also supports a financial transaction tax, as he explained on CNBC during his 2020 campaign.
More where I kind of like some ideas from this Cass guy:
“Spinning assets in circles creates nothing of value, and in fact creates the opposite of value,” Cass said. He would also force public pension funds to invest their entire portfolios in U.S. domestic investments.
For Cass, tax cuts – traditionally the top Republican priority – are simply not on the list. “There are times when tax cuts are needed , like in the ’70s, sure,” Cass said.
“But to elevate these things to dogma and say that is always the answer and more is always better is not conservative at all. This old ‘thou shalt not raise taxes’ is a thing of the past.”
The key policy proposals for a second Trump administration (and my comments):
So please, have a real policy discussion here. I know that's difficult from some of you.
Some comments on how the GOP is becoming the Nationalist People's Party. LOL (and you MAGArons claim to hate socialism).
I spoke to Sohrab Ahmari, a former Wall Street Journal editorial writer and one of the architects of this new populism, to get his insight into where conservative economics could be headed.
The vision that Ahmari laid out for me was one of a Republican Party that is worker-centric and vastly more pro-union than it is today.
At one point, Ahmari paused and I said, “I can almost hear the CEOs of Amazon and Starbucks having a heart attack listening to this.”
“Let them,” Ahmari shot back. “Let them choke on it.”
More interesting:
They argue that the Reaganite low-tax, low-regulation, free-market ideology has not worked out very well for American workers, but it has worked out enormously well for corporate elites.
This moneyed class, the argument goes, does not live in the same places, or share the same values, as most social conservatives.
The new thinking urges conservatives to reject the kind of traditional, Republican economic dogma championed for decades in Washington by groups like the U.S. Chamber of Commerce and the Business Roundtable.
In its place, the new populists want to bring conservatives together to create a broader coalition, a sort of capitalist worker’s party of America. They also have a specific list of objectives.
In this way, I actually agree as to the cause. The '86 Reagan Tax Reform taxed ordinary income and capital gains at the same rates. That was a move forward. But it was short-lived, and ever since, capital gains have been so favored that it's possible for wealthy to live opulent lives through low cap gains and margin buying while incurring extremely low effective tax rates. The result is that our economy has become a financial economy, not a capitalist society based on production.
Another way to look at this is the old saying that populism comes from real pain, but it rarely has the right solution. I'd add that populism often directionally does point out the cause of the problem, but it often gets lost in the insanity of the passionate zealots (you fools who constantly cry out the "global elites" - I'm talking about you). It's not that there's an elite class that's driving things - it's just not so conspiratorial. Instead, it's a monied class that's largely working toward similar self-interests, gained primarily through a financial economy.
"Work Matters"
I have some affinity with these comments from a key driver of these policies, although not the "across-the-board tariffs."
Cass argues that Republican economic policy has been focused on the wrong goals: lowering prices and increasing consumption.
Instead, he says, Republicans need to focus on production and value creation. “The conceptual shift is the recognition that work matters and production matters,” Cass told me.
“It was absolutely black letter economic doctrine that the point of economic policy was to consume as much as possible. But not all markets are productive markets. And there’s nothing that guarantees that the things that optimize profits are things that are socially beneficial.”
To hear Cass tell it, most of the damage to America’s social fabric has been driven by decades of offshoring in the U.S. manufacturing sector. To solve this problem, he and others like him want to see across-the-board tariffs.
Cass is also harshly critical of Wall Street: “The private equity and hedge fund industries do not generate value,” he said in our recent interview. “They extract value from the economy.”
“Three hundred billion dollars in fees for the hedge fund industry is not $300 billion in value,” he added.
But then it starts to look like "big government."
What Cass and the other new conservative economists have in mind is the use of muscular state power – something once entirely opposed by conservative politicians – to push companies toward a more socially beneficial way of work.
“The goal is to make productive activities more attractive and unproductive activities less attractive,” Cass said.
Cass’ approach to the economy could have stark consequences for Wall Street. He envisions a financial transaction tax designed to make trading assets more expensive and decrease what he sees as the financialization of the economy.
That last comment, decreasing the finalization of the economy, I'm all for that. then irony:
President Joe Biden also supports a financial transaction tax, as he explained on CNBC during his 2020 campaign.
More where I kind of like some ideas from this Cass guy:
“Spinning assets in circles creates nothing of value, and in fact creates the opposite of value,” Cass said. He would also force public pension funds to invest their entire portfolios in U.S. domestic investments.
For Cass, tax cuts – traditionally the top Republican priority – are simply not on the list. “There are times when tax cuts are needed , like in the ’70s, sure,” Cass said.
“But to elevate these things to dogma and say that is always the answer and more is always better is not conservative at all. This old ‘thou shalt not raise taxes’ is a thing of the past.”
The key policy proposals for a second Trump administration (and my comments):
- Impose a 10% global tariff on all imports.
Seriously? Will 10% really make a difference in re-shoring lost industries? Or merely increase inflation? I'd rather have the insanity of 100% tariffs and make it clear "buy American or pay." And how many years until we re-shore things? - Block American firms from investing in China.
I'm not a fan of the Chinese, but I'm not sure this is going to bring money to the US. - Block Chinese firms from access to U.S. capital markets.
Why? It's like importing money. Let them buy our stocks and bonds. - Impose harsh penalties for employees who fail to comply with immigration laws.
OK with this. The rest though, not so much. - Eliminate H-2A and H-2B programs for seasonal and agricultural workers.
OK, let's increase food costs more. Are we really going to make up migrant workers with Americans? - Award H1-B visas to the highest-paying employers.
I don't mind this. The use of cheaper high-skilled labor brought to the US is a negative, and depresses value. And countries like India are starting to benefit because the smart kids are increasingly staying home vs going to the US and UK. - Create a $100 billion National Development Bank for critical infrastructure.
Devil is in the details, but I like. Funny, infrastructure is now good? ;-) - Repeal the National Environmental Policy Act of 1970.
Absolutely no fvcking way in hell. I'm tired of hearing BS from conservative friends like "no one is against clean air and water." then they defend BS dumping of toxic wastes, emissions, and waterway pollution. Get over yourselves, we're not going backward on this. - Reform corporate bankruptcy to mandate six months' severance for all employees and one year’s tax liability for local communities.
Reasonable idea. - Require private firms hired by public pension funds to publish annual performance data.
I'm all for anything that promotes fiduciary accountability of retirement funds. Promoting that made me an internal and outward target for years in the financial industry, but it's essential. - Impose a financial transaction tax of 10 basis points on secondary market sales of stocks, bonds and derivatives.
Meh. It's a tiny tax, so it's basically pure revenue raise from secondary and directive activity. I'm OK with it. - Ban stock buybacks and eliminate tax deductibility of interest.
Really? Banning buybacks completely is silly. Targeted situations, like when airlines used government funds for the liquidity for buybacks, sure, that's ok. The rest, no.
So please, have a real policy discussion here. I know that's difficult from some of you.
