Monday, October 10, 2016

The New Reactionaries

By Robert J. Samuelson
The Washington Post
October 10, 2016

A reactionary is someone who wishes to return, usually unrealistically, to an earlier and more appealing era. We have two reactionaries running for president. Both peddle agendas that promise to re-create a reassuring past. We are being fed different varieties of nostalgia. Neither will work.

Donald Trump is the most explicit. He pledges to “make America great again.” What does this mean? For starters, it suggests that non-Hispanic whites will recapture political power that has shifted to immigrants and their children. Many would simply be tossed out of the country. After this, Trump will reinvigorate the economy by tearing up many, perhaps all, of our trade agreements, which he blames for our economic problems.

To ensure the economy’s revival, Trump would resort to the standard Republican cure for slow growth: massive tax cuts. These would cost roughly $5 trillion over a decade, reckons the nonpartisan Committee for a Responsible Federal Budget.

Of course, most of this is unlikely. Legal immigrants account for three-quarters of all immigrants, reports the Pew Research Center. The proportion is higher for their children. Indeed, immigrants and their offspring now account for most U.S. population growth. Between now and 2065, they will represent almost 90 percent of growth, projects Pew .

As for the economy, Republicans talk casually about increasing annual economic growth to 3.5 percent to 4 percent, which is slightly above the 3.2 percent average from 1950 to 2015 . But it’s way above the recent average of 2 percent. Although raising it doesn’t sound hard, it is. Part of the decline stems from the retirement of baby-boom workers; that won’t change much. Most of the rest reflects stagnant productivity — the disappointing impact on growth of technology, management and worker skills — and is hard to influence in an $18 trillion economy.

Turn now to Hillary Clinton, who — like Trump — is busy resurrecting the past and calling it the future. The Democratic political formula is unchanging: Create handouts that make more Americans grateful for and dependent on government. Clinton has proposed raising Social Security benefits, paying tuition for most students at state colleges and universities, funding universal preschool programs and helping parents cover child-care costs.

All this is self-serving behavior. It’s using the public’s money to bribe the public, as is sometimes said. Actually, Democrats (and Republicans, too) have gone one step further. They bribe the public with borrowed money (budget deficits) and taxes on the wealthy. Clinton has ruled out tax increases on the middle class, defined as less than $250,000 of income for a family.

Democracy increasingly becomes a cynical game in which the few subsidize benefits for the many. Government isn’t disciplined, because the many have little reason to discipline it. If most government appears “free” to most people, why bother?

Of course, a progressive tax system (the rich pay more) is desirable, and many social programs are needed. But most could do with modernization. Two major programs — college student loans and Obamacare — have serious weaknesses. You might think a responsible government, before embarking on more social engineering, would fix existing programs. Perish the thought.

So the public is left contemplating two competing, but twisted, visions of the past. Trump evokes the early decades after World War II, when U.S. companies dominated the world. Germany, Japan, South Korea, Mexico and China weren’t major factors then. They are now and won’t meekly retreat. The United States runs chronic trade deficits because the dollar serves as the main global currency. This raises its exchange rate, putting U.S. manufacturers at a disadvantage.

Clinton offers warmed-over 1960s activism based on the false optimism that government can easily regulate social change. This was and is a delusional simplification. What we are likely to get are new bureaucracies presiding over new grants, regulations and tax breaks that make government more intrusive and confusing.

One irrefutable sign of this campaign’s unseriousness is the virtual absence of any discussion of America’s aging. In 1960, fewer than 1 in 10 Americans was 65 or older; now it’s 1 in 7, and by 2060, the ratio may be 1 in 4, says the Population Reference Bureau. This trend is unavoidable, but it is missing in action. How does it affect the economy and politics? How can we prevent spending on the elderly from crowding out other important functions of government, including defense, which is being squeezed in an increasingly dangerous world?

So it is with many subjects: immigration, tax changes, balancing the budget (the main reason for this: to make people weigh the benefits of more government against the costs). We get no discussion or simplistic discussion. The past takes precedence over the future. There’s a reactionary celebration of the past that, no matter who wins, has one sure consequence: disappointment.


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