President Donald Trump’s address to Congress Tuesday night was more of a campaign speech, a recitation of accomplishments, than a traditional State of the Union message, with an agenda for the current session of Congress.
In actuality, Trump made a very strong case regarding the state of the country during his watch. It illustrated the political paradox that is Donald Trump.
Any other Republican running on Trump’s record would be standing on the edge of a probable landslide reelection victory this November. Democrats would be looking at a McGovern-like debacle.
Instead, the two most left-wing candidates the Democrats could possibly field — Bernie Sanders and Elizabeth Warren — are running close with Trump in the polls. He will be lucky to eke out another Electoral College majority.
Sunny disposition shown in speech won’t last
Ronald Reagan was always more popular than his policies. When his reforms put a spring back into the step of the economy, he could run an upbeat reelection campaign about it being morning in America again. That’s, in part, because Reagan was an upbeat guy. The message rang true and felt authentic.
Trump, in contrast, is considerably less popular than his policies. And it will be hard for him to run an upbeat campaign because, to put it mildly, he’s not an upbeat guy. The sunny, and effective, presentation of accomplishments in the State of the Union address is likely to have a short shelf life.
Trump’s best case is on the economy. To the extent Democrats acknowledge good news about the economy, they claim that it is merely a continuation of the recovery that began under President Obama. No credit due to Trump.
Which is a shame given economy is more robust
However, the trajectory of the recovery has changed notably under Trump, and his policies do deserve a considerable share of the credit.
The pace of economic growth quickened. One of the larger, and politically most important, differences is wage growth among those without a college degree. It is stronger, and broader, than in many years.
The heart of Trump’s tax reform was a sharp reduction in the corporate income tax rate. That increased cash on hand and potential returns on future investments.
Leaving more resources at work in the private sector, and increasing the potential return on future investments, will result in more private sector economic activity. Even things dismissed by liberal critics, and some conservative ones, as an economic waste, such as share buybacks, are actually an efficient way of redeploying capital to more productive uses.
Trump lifted anchor of regulatory uncertainty
Perhaps equally important was Trump eliminating the regulatory uncertainty that served as an anchor on the economy during the Obama years. Businesses had to assume that the regulatory environment would change, and likely for the worse.
And not just the regulatory environment for their particular sector. Obama overhauled the entire finance and health care industries. And he was in the process of trying to do the same to the energy sector when time ran out. These have knock-on effects throughout the economy.
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Trump’s deregulation initiatives have lifted the regulatory uncertainty anchor. If there are changes, businesses can assume that they will generally increase their latitude to operate.
There is a third, often overlooked, factor. To the extent Trump’s immigration policies have helped create a stasis in the number of foreign-born low-skilled workers in the country, that contributes to the upward push on low-skilled wages.
On trade, president has a much weaker case
Trump would claim that his trade policies have contributed as well. But he is on less firm ground here.
Trump’s tariffs, and threats of tariffs, have added their own element of uncertainty to the economy, which has deterred the investments in business expansion that otherwise would have flowed from his tax cut.
With respect to China, there’s a case to be made that slower growth from impinging the free flow of goods and services is a necessary price to protect American markets from its form of state capitalism. With respect to the rest of the world, not so much.
Will voters listen past Trump’s noise?
The economy isn’t everything. But in politics, it’s a lot. And Trump has a record that should attract broader support than he is receiving.
That’s because Trump has turned American politics into a soap opera starring himself. His management of the national government has been chaotic. His Twitter tantrums roil American politics, inflaming supporters and opponents alike.
His base likes this and thinks it’s necessary given liberal bias in the media and the intemperate attacks regularly directed at Trump. And that is not a view without some foundation.
But the soap opera alienates a lot of voters to whom Trump has a case to make, if he can get them to listen.
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