Since his victory in 2016, President Donald Trump has made two high profile economic decisions. One failed miserably and the other could put America in the best financial position in decades.
After his upset victory in November of 2016 Donald Trump, possibly on a high from his surprise win, decided his first act as President-elect would be to save some jobs at a Carrier plant in the state of Indiana. This plant was somewhat high profile after a video of the plant announcing the layoffs had gone viral. President-elect Trump and Vice-President-elect Mike Pence headed to Indiana and in a very short time seemed to emerge with a win.
A deal was announced that would offer Carrier 7 million dollars in incentives from the state of Indiana and in return Carrier would keep over 1,000 jobs in the US that they had planned to ship to Mexico. Trump promised more deals like this when he became President. Luckily for the United States that has not happened. Over a year later that same Carrier plant has laid off over 500 employees and many of the workers feel betrayed by President Trump. Despite the initial fanfare, this deal was a waste and a failure. Luckily for President Donald Trump, he chose to end 2017 on a much higher note.
In December of 2017, President Donald Trump along with the GOP was able to pass one of the most significant tax reform bills in decades. It cut corporate and personal taxes and simplified the overall tax code. Along with massive regulatory reform, the tax plan has open the floodgates of capital investment in the US. Companies are repatriating, possibly, hundreds of billions of dollars, raising wages, and giving out bonuses. Some manufacturers are even looking at bringing jobs back because of the increased competitiveness of the US in the global economy. All of these results came from a traditional conservative laissez-faire approach to the economy.
Since Donald Trump was elected he has chosen two very different economic paths on two very different problems. One failed miserably and angered the very people he was trying to help and it cost the state of Indiana 7 million dollars in taxpayer money. The other has been praised by economists and has the potential to grow the entire economy with benefits to employers and employees.
Given the contrast between these two decisions, it is amazing that President Trump and his administration continues the rhetoric on trade and tariffs. Today, the White House announced tariffs on solar panels and washing machines. The same economists who praised Trump’s tax plan and push for deregulation derided these tariffs as bad for consumers and the overall economy. It’s hard to understand why President Trump would follow up his recent wins with a loser trade policy at which every president in the modern era has tried and failed.
Many trade deadlines from 2017 were postponed until this year, which means this is likely to be the first of many decisions this administration makes with regard to trade this year. For the sake of Trump’s legacy and the economy let’s hope this was the last bad decision of 2018 and not just the first.