Trumponomics: Inside the America First Plan to Revive Our Economy

250 Pages·2018·2.09 MB·English

by  Stephen Moore

TRUMPONOMICS
Inside the America First Plan to Revive Our Economy
Stephen Moore
and
ARTHUR B. LAFFER
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Table of Contents
About the Authors
Copyright Page
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Foreword
by L K
AWRENCE UDLOW
“America is open for business, and we are competitive once again.”
—DONALD TRUMP at Davos, 2018
When Donald Trump asked me to serve as the chairman of his National
Economic Council in March 2018, it was truly the honor of a lifetime. I joked
with the president that I had worked for Ronald Reagan in the early 1980s on his
economic revolution, and my mission in life is to serve the president roughly
every 35 years.
I don’t agree with President Trump on every issue—and he knows that—but
on the big picture of unleashing a new era of broad-based prosperity for
America, we are in 100 percent agreement. Trump says we can get to 3, 4, or
even 5 percent growth through tax reduction, deregulation, American energy
production, and fairer trade deals, and he is exactly right. We are devoting nearly
every working hour at the White House to achieving a sustained higher growth
path that will create higher take-home pay for all Americans. And by the way, I
can tell you after a few months on the job, this man is indefatigable. Donald
Trump doesn’t stop. He barely sleeps. It’s almost impossible to keep up with
him. He is truly obsessed with restoring American greatness.
Now, step back a minute. When Donald Trump first announced his run for the
presidency three years ago, I, like Arthur and Steve and most people, was filled
with skepticism. I wondered whether this was a publicity stunt, not a real bid to
sit in the Oval Office. On some of his calls for trade tariffs, I was openly critical.
But when Arthur Laffer, Steve Moore, and I sat down with this billionaire
businessman turned politician in Trump Tower in the spring of 2016, the three of
us saw Trump in a whole new light. Here was a pro-growth, pro-business
candidate who understood the vast underperformance of the U.S. economy and,
even more importantly, the potential for dramatically faster growth. He wanted
tax cuts. He wanted to deregulate, he wanted to get the government out of the
way.
Most of all, we loved his Reaganesque optimism. It was infectious.
What a contrast with the left—which was full of negativity. We can’t grow
faster than 2 percent. We can’t get wages up. We have to live with secular
stagnation. We can’t rebuild our coal industry. Climate change is going to bring
the end of civilization. The inner cities cannot be hopeful and prosperous places
again. And, of course, Trump can’t possibly win. Well, he proved them all
wrong! And he’s still doing that.
Arthur, Steve, and I spent much of the next six months on the campaign trail
perfecting and then selling the Trump tax plan. Then when he was elected, we
worked with the White House and Congress on the strategy to get it passed and
signed into law. Arthur was the intellectual godfather of this amazing tax plan.
Steve and I worked together doing the blocking and tackling to help the
president get this over the goal line. It was a rocky road for sure. You will learn
in this book, however, that Trump was an easy sell. He has an amazingly
instinctive appreciation of which policy dials in Washington need to be twisted
in another direction so that the economy can flourish. He always told us that the
tax plan had to help the middle class—and that was always the mission. Our goal
was to pass a tax cut that would help American businesses expand and invest and
thereby hire more workers and boost their wages and salaries. It had been 17
years since the middle class had seen a rise in their incomes, and it was about
time they got a raise.
I agree wholeheartedly with Arthur and Steve that the tax plan—along with
other Trump initiatives—has supercharged the economy. As we used to tell
Trump: it worked for Reagan, it worked for JFK, it will work for you. The tax
plan, mixed with other pro-growth policies, has worked better and faster than we
ever expected. As Trump has often said of the current American economic
expansion: “The world is witnessing the resurgence of a strong and prosperous
America. There has never been a better time to hire, to build, to invest, and to
grow in the United States.”
He’s right. And what a salesman.
Trump’s policies, in just one and a half years, have begun to restructure the
American economy. We’ve moved from “secular stagnation” (i.e., high taxes,
massive regulation, huge government spending, and a disdain for business and
investors) to a new private-sector incentive system that rewards success.
By slashing individual and corporate tax rates, providing 100 percent
immediate expensing for plants and technology, and making it easy for big
companies that fled our high-tax system to bring the money back home, he has
ended the war against business and investment.
And it has happened faster than anyone imagined possible.
More than 250 American companies have announced gigantic investment
projects, paid sizable bonuses to their workforces, increased 401(k)
contributions, and raised corporate minimum wages and other benefits. As of
May 2018, the stock market gains had increased Americans’ net wealth by an
astounding $7 trillion. This is the only realistic chance of bailing out excessive
government-union pensions and benefits—even though these very unions totally
opposed Trump’s corporate tax reform.
Ankle-biting Democrats say, “Rising business profits will go to shareholder
buybacks.” It isn’t bad for the 100 million Americans who own stock in
companies like Apple and FedEx. Meanwhile, new money is circulating
throughout the economy to start new companies and reoxygenate the system.
Walmart—which had bitterly fought attempts to raise the federal minimum
wage—raised its internal minimum wage for virtually all its wage earners, gave
bonuses of up to $1,000, expanded maternity and parental leave, and committed
$5,000 to every employee who adopts a child. Costco quickly followed suit with
its own policy.
And don’t forget the president’s argument about the importance of regulatory
reduction. “Regulation is stealth taxation,” Trump has often said. “We are
freeing our businesses and workers so they can thrive and flourish as never
before.” Hold that thought, Mr. President. Oh, and don’t forget that the Trump
tax bill ended the Obamacare individual mandate and opened the door to energy
drilling in the Arctic National Wildlife Refuge (ANWR).
Even on trade and globalization, Trump has told his international counterparts:
“As president of the United States, I will always put America first, just like the
leaders of other countries should put their countries first also. But America first
does not mean America alone.”
This book offers the first real, day-by-day tale of how Trumponomics came to
be—how it all happened. What a journey. I know that because I worked right
alongside Steve and Arthur every step of the way in 2016 and 2017. It was a
mighty struggle, and we each have the lashes on our backs for joining with
Trump to help him make America great again. We were for Trump before it was
cool.
They are my brothers; and we are still brothers in arms. I pridefully and
eagerly took the job working for Donald Trump because, as we all agree, there is
still so much to do to make America great again. This book shows how.
Introduction
Donald Trump won the biggest upset in American presidential history by
promising the American people a transformative change in U.S. economic policy
after eight years of an economic rut under Barack Obama and eight years before
that of George W. Bush. Trump won by focusing on jobs and the economy, but
he didn’t adopt a conventional left or right economic agenda.
He brought to Washington, D.C., a new economic populism that mixed some
conventional Republican ideas—tax cuts, deregulation, energy development, and
returning more power to the states—with more traditional Democratic issues—
trade protectionism and infrastructure spending. Trump embraced the populist
issues of immigration reform and requiring Europeans to pay for more of their
own defense.
We wrote this book to try to define the man and the ideas behind this new
economic theory—Trumponomics—that has the whole world in suspense and
discombobulated. Can it work? Will it work?
Trump’s election was a political “black swan” event. We have never seen
anything remotely like this president in any of our lifetimes. His outside-the-box
political strategy worked like a charm, bursting through the blue wall of
industrial states like Michigan, Ohio, Pennsylvania, Wisconsin, and Iowa. His
populist message resonated with working-class Americans in these blue-collar
states and districts. He is promising to bring jobs, higher wages, and
development back to these areas that were bypassed during the recovery and
haven’t seen much economic gain in two decades.
Can he succeed? The left insists no. They say growth cannot get back to 3
percent and that Trumponomics will make things worse. They say that the
factories that have left places like Flint, Michigan; York, Pennsylvania; and
Toledo, Ohio, are gone for good. They say that the steel mills and coal mines
aren’t coming back. Trump is betting his presidency that he can create an
economic revival in industrial-state America. It’s a gutsy, risky strategy.