Donald Trump has been elected president. People are processing lots of emotional feedback, much of it related to the headline scrum that took place over Donald Trump’s purported racism, sexism, etc. But the reality is that Trump’s presidency offers the possibility for a particular turn in public policy that has the potential to benefit virtually all Americans. My argument is that the Trump administration will work to improve the American balance sheet through the development of national assets. We don’t tend to think of public policy in those terms, but we should. I’ll explain why.
The Democrats have emphasized the redress of racial or sexual grievance (such as the highly disputable pay gap) and the delivery of money and benefits through redistribution. So, for example, President Obama managed to expand health coverage (though at a cost to many working class people) and aggressively increased the pool of food stamp recipients. Republicans, on the other hand, have argued for the power of the growth that free markets can generate. While the historical record is quite good on that front, it has seemed more recently (whether fair or not) that the benefits of such growth have not been widely shared.
Where does Donald Trump fit into this picture? I think he embraces a third way. He will prefer some kind of strong industrial/infrastructure strategy over the left-wing emphasis on entitlements and dependency. And he will decline to believe with Republicans that free markets are the key to human flourishing (alas, but so be it). Trump will try to build and protect America, Inc.
As a fairly orthodox small government, free market, free trade conservative, I prefer the Paul Ryans of the world to the Donald Trumps, but I think there is some benefit to Mr. Trump’s approach. It may help to begin by considering comments from a 2012 Wall Street Journal interview with European Central Bank president Mario Draghi:
In the European context tax rates are high and government expenditure is focused on current expenditure. A “good” consolidation is one where taxes are lower and the lower government expenditure is on infrastructures and other investments.
Draghi’s insight is one American policymakers need to understand. If the government is spending a great deal of money simply to put dollars in people’s pockets, pay salaries, etc. (in other words, “current expenditure”), then we are not getting nearly the good we could obtain with better government spending that develops real assets. Plus, we go bust trying to afford those ephemeral “current expenditures.” The superior situation is one in which you can keep taxes low and government spending is on items that last and have the potential to spur growth into the future. I have the sense that Donald Trump, the businessman and builder, instinctively understands this point.
For example, consider the difference between a government paying for things such as the interstate highway system or the Tennessee Valley Authority power plants versus a government that sends out a lot of entitlement checks. The first government will see substantial benefit over the long run. Just consider the return on investment those highways, dams, and nuclear plants have generated decade after decade. The second government (the one that focuses on entitlement payments) is mostly just poorer at the end of the year.
What I am suggesting (and friends on the left get ready to choke on your organic wheatgrass juice) is that Donald Trump buys into strategies suggested by John Kenneth Galbraith in The Affluent Society. Galbraith encouraged liberals to stop focusing so much on income redistribution and to concentrate instead on investments in public goods. Galbraith complained that we have a policy that encourages private consumption (both tax cuts and entitlements do that) when we should instead have one that tips the balance in favor of creating goods that benefit whole communities and provide a platform for better lives. Thus, he argues that roads should be improved, power lines should be buried, better parks and libraries should be built. Donald Trump’s thinking follows those same movements.
The upshot is that if a Trump presidency manages to shift our public policy away from simply encouraging more private consumption (via tax cuts or government checks) and in favor of providing work and generating public goods which could potentially serve us in good stead as national assets for a long time to come, then I think he could achieve something with broad based benefit to American citizens.
Hunter Baker, J.D., Ph.D. is a university fellow at Union University and the author of three books on politics and religion.