President Trump: “authentic,” “brilliant,” according to his economic advisers.
Photo: Jim Watson/AFP/Getty Images
Trumponomics is a damning exposé of the corrupt bargain between Donald Trump and the party’s wealthy insiders. The odd thing is that the book is not intended as an exposé at all, but as an auto-hagiography written by three Republican policy entrepreneurs who helped win Trump over and shape his program, and are so lacking in self-awareness that they earnestly believe they are defending both Trump and his partners.
The authors of Trumponomics are Larry Kudlow (who left in the middle of its writing to accept a job as director of the National Economic Council), Stephen Moore, and Arthur Laffer. The three fervently propound supply-side economics, a doctrine that holds that economic performance hinges largely on maintaining low tax rates on the rich. In the 1990s, the supply-siders insisted Bill Clinton’s increase in the top tax rate would create a recession and cause revenue to plummet. The following decade, they heralded the Bush tax cuts as the elixir that had brought in a glorious new era of prosperity. Moore wrote Bullish on Bush: How George Bush’s Ownership Society Will Make America Stronger, and Kudlow wrote the foreward to The Bush Boom.
Their record of being wrong about everything is so incomprehensibly vast it is astonishing they have retained their positions of influence over a major party. Trumponomics inadvertently clarifies how an economist who was declaring the U.S. housing market to be perfectly sound and on its way up in July 2008 secured a job as chief economist to the president of the United States as a matter of course.
The supply-siders have maintained absolute faith in their dogma in the face of repeated failure by banishing all doubt. Laffer explains in the book that he believes economists must resist the temptation to “start ignoring simple truths in favor of complex falsehoods.” When I first encountered that sentence I assumed I had read it backwards, but no — Laffer believes on principle that economic truths are simple, and he must steel his brain against the seductions of complexity, which is rather the opposite of how normal economists think. This seems to be the method by which they have warded off all doubts their repeated errors might have sown.
Accordingly, they have confined their failed predictions to the memory hole. A brief economic history in Trumponomics touts the gains made from 1982 to 1999, and laments “those gains stalled out after 2000 under Presidents George W. Bush and Barack Obama.” Notice, in addition to starting the Reagan era in 1982, thus absolving him for any blame for the recession that began a year into his presidency, they have retroactively moved the hated leftist Bill Clinton into the right-wing hero camp and the beloved conservative hero George W. Bush into the failed left-wing statist camp. At no point do they acknowledge the contemporaneous arguments they made against Clinton or for Bush. This is a preview of the method they will one day use with regard to Trump if the economy fails to deliver on their predictions: They will dismiss him as a leftist in disguise, without ever admitting having endorsed or designed his program.
The extraordinary lack of self-awareness allows the authors of Trumponomics to record a series of predictions that have already failed even before the book’s publication. Describing their case for a huge tax cut, they recount convincing Republicans in Congress that cutting the corporate tax rate from 35 percent to 20 percent “would yield about the same revenue – and possibly more — than the current system with a 35 percent rate.” (It hasn’t — corporate tax revenue has fallen by a third since the passage of the Trump tax cut.) They show Kudlow assuring Trump his tax cut would not lead to deficits because “the phony numbers of Washington’s bean counters” are “always wrong.” (They weren’t wrong — or, to put it more precisely, the bean counters turned out to underestimate the deficit following the tax cut.)
They describe Trump demanding, “I want to make sure that this isn’t a tax cut for rich people like me” (it was) and that Trump “didn’t want the Trump middle-class voters to think that this plan was self-serving” (they did.) The three record that, after meeting the great man and noticing his skeletal campaign staff, supposedly for money-saving reasons, they marveled to each other that President Trump “would have a field day going through the federal budget and rooting out the rampant waste, fraud and redundancy.” (He wouldn’t.)
The three authors proudly retell their litany of errors with the satisfaction of conquering heroes taking credit for their triumphs. It’s as if Robert McNamara published a book in 1968 boasting of his successful efforts to persuade Lyndon Johnson that the Vietnam War would be won by 1967.
Like virtually all members of the Republican Establishment, Kudlow, Moore, and Laffer initially greeted Trump’s candidacy with skepticism. But their hesitation did not center on the candidate’s ignorance, bigotry, irrepressible lying, authoritarian instincts, criminal history, or general viciousness. Instead, they doubted his commitment to the cause of low taxes for the affluent and lax regulation of business. A meeting with Trump easily dispelled these concerns. “He wanted tax cuts. He wanted to deregulate, he wanted to get government out of the way,” they recall. This was all it took. “The three of us saw Trump in a whole new light.”
Their newfound appreciation for Trump quickly bleeds into other attributes. They report one touching episode, in which the candidate agrees to meet a paralyzed teenage fan backstage before a rally. They ask why he didn’t bring the wheelchair-bound boy onstage, a campaign staffer explains that Trump “didn’t want people to think he was exploiting this tragedy for political gain.”
Bear in mind that Trump constantly boasts not only about charitable donations he makes, but also donations he claims to make but doesn’t, and is also the only recorded presidential candidate in history to mock a disability onstage. While Trump may have had reasons to keep a disabled fan off stage, it seems a little hard to believe either modesty or sensitivity toward the disabled was the motivation. Yet the authors accept the staffer’s flattering explanation purely at face value, calling it “a side of Donald Trump that many people are unaware of.”
Soon they find themselves lavishing Trump with compliments. “When people ask us what Donald Trump is really like in person, the one word we have found best described him was ‘authentic,’” they write of a man who has been described by his own aides as a compulsive liar.
Kudlow, Moore, and Laffer are unusually fixated on tax cuts, but they are merely extreme examples of the entire Republican Establishment, which shared their broad priorities. “The consolidation of the party behind Trump was greatly facilitated by the attractiveness of the Trump tax plan,” they report.
Greed is the glue that holds their story together. A large segment of their narrative consists of Trump turning over control of his agenda to various plutocrats. They tell how they wrote a memo defining the administration’s energy strategy during the transition period, drawing on three sources: oilman Harold Hamm; the Institute for Energy Research (a “partner organization” of the American Energy Alliance, a fossil fuel lobby); and Jack Coleman, an oil and gas lobbyist. They do not report consulting on any information sources not controlled by the fossil fuel industry. They describe a coal executive advising Trump, “if you want to make America great again, put a muzzle on the regulators.” At another meeting, one energy executive suggests natural gas, coal, and nuclear power should each have 30 percent of the power grid, with renewables splitting the remaining 10 percent. “That sounds about right,” Trump replies, “except for the ten percent for renewable energy.”
The authors report that they abandoned the idea of creating a border-adjustment tax because some businesses opposed it. “The business community was completely divided,” they note. “As such, we agreed very early on that the BAT had to go.” Trump himself refused to accept an end to the deductibility of interest payments. “Look, I’ve spent my whole life doing real estate deals,” he tells them, “Every one of them was financed by debt. I hate this idea.” Here they reveal Trump killing a reform solely because it would negatively impact his own business. This scene comes just five pages after they credulously cite Trump promising that the tax cut won’t benefit him personally.
The authors seem oblivious to either the contradiction with Trump’s populist rhetoric, or the general idea that an administration outsourcing policy to wealthy people with a personal stake in the outcome is in any way suboptimal. If these scenes had been ferreted out by investigative reporters instead of blithely repeated by a trio of hagiographers, many of them would be damning exposés you could imagine on the front page of the New York Times or the Washington Post.
The bizarre shamelessness of these accounts is explained in part by their belief that Trump’s wealth proves his motives are pure. “We never believed for one moment that [Trump] was in this to further enrich himself. He was already rich,” they reason.
The notion that the rich would never engage in corruption is not a throwaway line, but a bedrock principle the authors have articulated before. “Why shouldn’t the president surround himself with successful people?” Kudlow wrote in 2016. “Wealthy folks have no need to steal or engage in corruption.” Trumponomics is an unintentionally persuasive argument for the exact opposite conclusion.