Washington has a way of capturing presidents more than they conquer its bureaucracy — in current parlance, President Trump has become an alligator more than he has drained the swamp. Whether it’s Bernie Sanders, Elizabeth Warren, Amy Klobuchar, Pete Buttigieg, Michael Bloomberg or Joe Biden, the country will get a choice between a defender of the status quo ante — Donald Trump — and a radical vision to shake American capitalism to its foundations.
On foreign economic policy, Mr. Trump executed what left-leaning Democrats have long aspired — downgraded the World Trade Organization, thrown up tariffs on China and reworked NAFTA and commerce with China into more managed trade regimes.
Remember, Hillary Clinton promised to get tough with China and pull the United States out of the Trans-Pacific Partnership. None of the Democratic frontrunners are seriously suggesting taking down Mr. Trump’s tariffs or negotiating a hollow armistice in the trade war with Beijing.
If one of the terribly serious six lands in the Oval Office, don’t look for that to change. With moderate revisions, Nancy Pelosi endorsed the U.S.-Mexico-Canada Agreement. None of the Democratic aspirants could end the festering confrontation with China without winning fundamental reforms in its socialist market economy, which the Chinese Communist Party simply won’t tolerate, or facing a revolt within their own party in Congress.
All the Democrats would engage in conciliatory dialogues with France, Germany and other allies to modernize the WTO, but reforming that moribund institution is like trying to boil the ocean with a Bunsen burner.
Simply, don’t look for a big change in foreign economic policy, except a bow to the international consensus on global warming that Detroit automakers and electric utilities are already moving to effect.
The economy entered 2020 in reasonably good shape, but thanks to Boeing’s problems and the coronavirus lockdown of China we will be lucky to get 2 GDP percent growth this year. A cooling economy means the improvements in wages and wealth of lower income Americans Mr. Trump bragged about in his State of the Union address will diminish.
Even with globalization on life support — the march of artificial intelligence and automation weigh down the prospects of many working Americans. Democrats have few quick fixes other than flat out confiscating legitimately earned money from the wealthy and spreading it among the less fortunate — read those folks who didn’t get a professional degree at college, didn’t finish college or go altogether.
The left has 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. Prior to the Brexit referendum, Britain was eating the continent’s lunch by attracting entrepreneurs from high tax France, politically dysfunctional Italy and a Germany vulnerable to the end of gas-powered cars.
Intellectual property pays no tariffs and the real demon that moves those captains of industries 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 reelect Donald Trump, the system will stay busted. These past three years, the GOP clearly demonstrated that it 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 latter could even inspire doctors to flee to Canada and Britain.
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 — and if the Democrats’ success in 2018 and 2019, and the polling data — indicate anything, Americans like moderates more than radicals and are not enamored by socialism.
• Peter Morici is an economist and business professor at the University of Maryland, and a national columnist.
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