Yesterday’s New York Times had a telling quote from Newt Gingrich on the Trump Administration’s future:
“Ultimately this is about governing,” said former House Speaker Newt Gingrich, who has advised Mr. Trump. “There are two things he’s got to do between now and 2020: He has to keep America safe and create a lot of jobs. That’s what he promised in his speech. If he does those two things, everything else is noise.”
Obviously lots of other things matter, and I’d expect Democrats to be out in force in 2018 and 2020 to vote for a better President. However, for Trump supporters, security and jobs seems to be just about it. His supporters wanted more and better jobs in their hometowns, and more secure borders. Anything else, including the lies, the scandals, the general nuttery, just passes right by them in their faith that change is gonna come.
Here’s why it likely won’t.
The truth of it is, governments have a pretty limited effect on the economy. They can certainly make it worse, by following disruptive policies and injecting uncertainty into the marketplace, but in the short run there’s not much a government can do other than run some stimulus programs. The best thing governments can do is to create the conditions for long-term growth: building infrastructure, guaranteeing rule of law and security, providing education, etc. Dropping a few regulations here and there might help a few industries, but it won’t create jobs on a significant scale.
Manufacturing isn’t going to come back, at least not the jobs. Despite what Trump says about NAFTA and China, economists keep reminding us that about 85% of the job losses in manufacturing are from automation, not trade. Renegotiating NAFTA (and it’s not clear just what Trump wants to add or subtract) and punishing China with tariffs isn’t going to bring manufacturing jobs back. The manufacturing that is being built in the U.S. tends to be very automated. Lots of production but not too many jobs, and few of those jobs that are created are suitable for people with low skills. The odds that every small town is going to see that mill reopen are slim to none.
It’s also quite likely that the economy is going to hit the skids in the next few years. We’ve had 75 straight months of job growth as we recovered from the 2008-9 recession, adding millions of new jobs and bringing the unemployment rate down to 4.7%. Trump couldn’t have asked to inherit a better economy. However, and this would likely have happened no matter who was elected, that streak is going to end. The Economist Intelligence Unit predicted (even back when they thought Hillary was going to win) that the next President would be a one-term President when the business cycle would start to slip back around 2018. It might not be a full-blown recession, but we’re likely in for a serious economic slowdown.
Trump supporters have always had unrealistic expectations about what a Trump administration could do as far as bringing jobs back to their communities, and unrealistic time frames for when it could be done. Even if Trump were a genius with a crack team of economic experts, they’d find it incredibly hard to create the kind of manufacturing jobs that his supporters expect. They’re sure to be disappointed.
On the security side, the limited success we’ve had combating terrorism has been due mostly to the intelligence relationships we’ve built with other countries and the work done at home to detect and deter attacks. Trump’s policies are likely to throw sand in those gears rather quickly. His decision to move the US Embassy in Israel to Jerusalem and give unstinting support to Israel will quickly spoil relations with the Arab world where we need support against terror. Trump’s actions against Muslims at home will dry up support for cooperating with the government, and could inspire more attacks.
Even if Trump’s national security team were geniuses, which clearly they are not, there isn’t much more they can do to go after terrorism that the Bush and Obama administrations weren’t already doing. There will still be attacks abroad and in the United States regardless of who the President is.
Trump’s made the mistake of getting his supporters hopes up so high, there’s no way he’ll be able to match their expectations.