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Never underestimate the staying power of bureaucrats—through passive resistance they are amazingly adept at frustrating the more temporal power of elected officials.
Getting down to cases, Donald Trump has become a swamp rat like the rest of us and whether his opponent is Bernie Sanders or somewhat more moderate Joe Biden, the country will get a choice between a defender of the status quo ante—Donald Trump—and a more radical vision seeking to alter American capitalism and constrain economic freedom.
Focusing on international trade policy, Trump executed what left leaning Democrats have long aspired—downgraded the WTO, thrown up tariffs on China and reworked NAFTA and commerce with China into more a managed regime.
If a Democrat lands in the Oval Office, not a lot will change.
Remember, Hillary Clinton promised to get tough with China and pull the United States out of the Trans-Pacific Partnership, and Trump did exactly those things. With modest alterations, Nancy Pelosi pushed the U.S.-Mexico-Canada Agreement through a reluctant House.
No Democratic candidate has suggested we just take down Trump’s tariffs on Chinese goods. None could end the festering confrontation with Beijing without facing terrible opposition from congressional Democrats. Unless of course he won fundamental reforms in Beijing’s socialist market economy—the Chinese Communist Party would rather go down in flames then swallow that.
To gain cooperation from the EU on China, a Democrat would likely agree to work with France, Germany and other allies to modernize the WTO, but reforming that moribund institution is as tough as boiling the ocean.
Simply, don’t look for a big change in foreign economic policy, except less hostile U.S. participation with the international consensus on global warming—remember, Detroit auto makers and electric utilities are already moving to substantially decarbonize their products.
The economy entered 2020 in reasonably good shape but thanks to Boeing’s BA, +0.75% ever more festering problems and the coronavirus we will be lucky to get 1.5% to 2% GDP growth this year. Consequently, the improvements in wages and wealth of lower income Americans Trump bragged about in his State of the Union will slow—perhaps halt until next year.
The march of artificial intelligence and automation haunts the prospects of many working Americans. Democrats have few quick fixes other than higher taxes on hard working professionals and successful entrepreneurs and spreading money among the less fortunate—folks who didn’t earn a professional degree, finish college or obtain a skill, for example, through the Labor Department’s internship programs.
Democrats have plenty of proposals for wealth taxes and millionaires’ income taxes. Look for changes to the tax code to effect either a child allowance—Germany now pays for children up to the age of 25—or a universal guaranteed annual income.
No thought has been given to how a Singapore on Steroids in Britain courtesy of Boris Johnson could easily steal a good portion of U.S. software and other high-tech activity.
Intellectual property pays no tariffs and the real demon that inspires businesses to relocate is confiscatory taxes. England and Scotland could prove attractive to the Silicon Valley, Ireland for Big Pharma, and Switzerland for both.
The Affordable Care Act did not stop health care inflation and if we re-elect Donald Trump, the system will stay busted. The GOP has no stomach for ending the price gouging by Big Pharma or busting up the local cartels that have emerged among hospitals and health insurance companies and the monopolization of local markets for medical specialties and other services.
Even a moderate Democratic president will move quickly to pass the Pelosi-endorsed House bill that would fix U.S. prescription drug prices to those charged in Canada and Europe, and perhaps peg prices of most services to Medicare reimbursement rates.
The Sanders-Warren solution is a wholesale shutdown of the health insurance and pharmacy management industries and replacing those with government agencies run by Democratic Party apparatchiks. Think about the boobs who built the app for the Iowa Caucus running health care.
Emerging from these choices Mr. Trump looks downright moderate. If the Democrats’ success in 2018 and 2019—and polling data—indicate anything, Americans like moderates more than radicals and are not enamored by socialism.
