Thankfully for the functioning of our economy and society, there is a gap between campaign promises and the post-election changes, a gap arising from the necessity of compromise with a loyal opposition.
But compromise across party lines has been destroyed by the Hastert rule – only bills that a majority of Republicans agree to will come up for a vote in the House of Representatives – and campaign promises may come to pass, nearly unaltered.
What will the economic polices that President-elect Donald Trump proposed during his campaign do to the economy? Some will do obvious and immediate damage. One of the planks about infrastructure spending, due originally to Barack Obama, will help the economy in both the short and the long run; the rest involve immense long-term direct costs and opportunity costs.
If the president-elect starts trade wars, as he has repeatedly threatened, the U.S. economy, now growing, will suffer a near-immediate loss of jobs and growth. The suffering will be mostly concentrated on the lower-paid part of the labor force, the part less protected from shocks and slower to be re-hired.
If a new recession arrives, the differences between the lives of residents of poorer states and richer states will continue to widen, leaving the poorer with even fewer opportunities to advance, with worse health outcomes, and even with shorter life expectancy. The differences have direct economic causes. Richer states have higher state tax rates, and they invest their tax money in the physical and social capital that allows them to prosper.
If House Speaker Paul Ryan’s budget and tax plan go into effect, we will finally, and for the first time, have a deficit large enough to worry about.
If this is used as a pretense to cut funds to research, to cut the laws and regulatory framework that aim, however imperfectly, to deliver markets that work, corporate liability, equal protection under the law and a liveable environment, then the U.S. could lose decades worth of growth and prosperity. If used as a pretense to cut Social Security, then deep and wrenching poverty may re-emerge among the elderly.
If Ryan does not block the new president physical infrastructure spending, some version of Obama’s plans may finally come to pass. Infrastructure spending pays for itself many times over in the long term, and often in the short term.
If the new vice president’s previously legislated positions on reproductive health are even partially enacted at the federal level, lower-income women will, on average, have less access to health care, to contraception and to on-the-job support for raising a family.
The personal costs are immense and long-lasting. The cost to society is everything that the drive and ambition of such women has generated during the past generations.
If the president-elect’s immigration policies go into effect, we will lose some part of the flow of immigrant ambitions, talents and entrepreneurial drive that has created jobs and wealth, created knowledge, science, medicines and technologies.
If the current unified willingness to endlessly repeat falsehoods continues, soluble economic problems will continue, costing us now, and for generations to come: If one starts from the position that factory jobs have been lost to China rather than to automation, one starts a trade war rather than helping businesses create new domestic industries and jobs; if one starts from the position that climate change is not real, one thwarts clean energy industries in favor of possible planetary disaster; if one starts from the position that the Affordable Care Act is bankrupting Medicare rather than making it more viable, one repeals it rather than reforms it; if one starts from the position that poor white folks are held back by anti-racism policies rather than by structural problems in the economy, one tries to suppress minority voting rights rather than looking for structural solutions. We need a different direction.
Maxwell Benjamin Stinchcombe is a professor of economics at The University of Texas at Austin.
A version of this op-ed appeared in the Fort Worth Star Telegram.