Democrats Try to Undo the Best Part of Trump’s Legacy
The Democratic Party has a more complicated relationship with
than it likes to admit. It wants voters to remember the nonstop chaos of his administration, his
rants, how he debased the presidency on Jan. 6 and won’t stop lying about the 2020 election results. Fair enough.
But Democrats also need voters to forget the success of the pre-pandemic economy and support efforts to reverse policies that abetted faster growth. The reality is that when Mr. Trump wasn’t embarrassing himself, he was advancing a more or less traditional Republican agenda of lower taxes and lighter regulations. The upshot was an acceleration in economic activity, higher labor-force participation rates and narrowing racial inequality.
“During Trump’s first three years in office, median household incomes grew, inequality diminished, and the poverty rate among Black people fell below 20% for the first time in post-World War II records,” the Journal reported in October 2020. “The unemployment rate among Black people went under 6% for the first time in records going back to 1972.” Minorities weren’t the only beneficiaries of this boomlet. Between 2017 and 2019, wages for the bottom 10% of earners grew at more than double the rate they did during President Obama’s second term.
This record is all the more impressive because it defied expectations. The growth of gross domestic product during Mr. Obama’s final year in office was only about half of what it had been a year earlier, which prompted no shortage of doom-and-gloom economic forecasts for the Trump presidency. Nevertheless, in 2017, 2018 and 2019, the unemployment rate came in below what the Federal Reserve had predicted, while GDP was higher than anticipated.
Democrats are loath to give Mr. Trump’s tax and regulatory agenda any credit for these outcomes, but the economy performed in the main just as administration officials and supply-side economic modeling predicted. Lower corporate tax rates were intended to reverse the downward trend in business investment, and following their implementation major companies announced wage hikes, bonuses and 401(k) match increases. In the two-year period after the 2017 tax reform passed, household incomes rose by more than they had in the previous eight years combined.
The reason this history is important is because Democrats, via the Inflation Reduction Act unveiled last week, want to raise the taxes that Mr. Trump cut. No matter what it’s called, the legislation is another tax and spending bonanza that will do little if anything to reduce inflation. But passage could discourage the kind of business investment we saw before Covid. And because corporate levies are borne mainly by employees, higher taxes on businesses can also lead to lower wages and less hiring.
The White House seems to be under the impression that Mr. Trump got the boot in 2020 because of his stewardship of the economy and that voters want his economic policies reversed. But the economy is one area where Mr. Trump consistently polled strongest, and he was elected in 2016 in large part because of the sluggish growth under Mr. Obama. As Mr. Obama’s vice president,
rode shotgun through the slowest economic recovery since World War II—a recovery that finally kicked into gear after tax reforms opposed by most Democrats in Congress took effect.
Democrats are in a bind. With inflation at a 40-year high, violent crime rates spiraling upward, and a border situation that even has Democratic mayors of sanctuary cities complaining about too many illegal immigrants, the midterm elections could be significantly worse than they typically are for the party that controls the White House.
Not all of Mr. Trump’s economic policies are worth preserving. His trade war with China has been a bust. It didn’t reverse a U.S. decline in manufacturing, as the White House promised. Rather, it helped some manufacturers while hurting others, for a net loss overall. Yet instead of reducing tariffs on Chinese goods, which increase prices for U.S. consumers at a time when people are already feeling pinched, the Biden administration has decided to target tax cuts that can be shown empirically to have benefited the working class.
Whether the issue is crime, immigration or the economy, Democrats are putting progressivism ahead of pragmatism and believe that the defeat of Mr. Trump in 2020 gives them license to do so. But Mr. Trump lost his bid for a second term because the country grew tired of his behavior, which shouldn’t be confused with his economic and political agenda. It might take a midterm shellacking for the left to finally figure out why Joe Biden was elected.
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Appeared in the August 3, 2022, print edition.