In panic mode, President Trump is adopting many of the expensive anti-growth policies championed by House Speaker Nancy Pelosi and presumed Democratic presidential candidate Biden. This bodes ill not only for his own campaign but also the survival of the Republican Party.
by Richard Schulman
House Speaker Nancy Pelosi wants to renew the just-expired $600 supplemental jobless benefit. So reportedly do President Trump and his Treasury Secretary, Steven Mnuchin. The benefit pays over half of benefit recipients more to stay jobless than to return to work. Employers are complaining they can’t re-open their businesses for lack of sufficient staff.
Trump undercuts Republicans
Republican economists have been unanimous in opposing renewal of the jobless benefit at that high level. AP reports that
Republicans in the Senate had been fighting to trim back the $600 benefit, saying it must be slashed so that people don’t make more in unemployment than they would if they returned to work. But their resolve weakened as the benefit expired, and Trump abruptly undercut their position by signaling he wants to keep the full $600 for now. On Friday, Trump used Twitter to explicitly endorse extending the $600 payment.
Goldman Sachs again
Mr. Mnuchin is a former long-time Goldman Sachs officer, an investment bank with close ties to the Democratic Party. President George W. Bush’s Treasury Secretary from 2006-2008, Henry Paulson, Jr., also from Goldman Sachs, performed a similar role in fatally damaging Republican prospects in the fall of 2008 by triggering the panic that led to the Great Recession and the election of President Obama. Bush’s White House chief of staff, Joshua Bolten, was also from Goldman Sachs, as were numerous key officials at the Federal Reserve. The Fed’s too loose then too tight monetary policies also played a major role in the collapse.
The politics of envy
President Trump is further channeling Mrs. Pelosi and the Democrats by criticizing America’s top tech billionaires for profiting from the pandemic. The president’s criticism ignores the fact that the tech companies were crucial in keeping the economy running after the governors shut down the economy with the encouragement of federal officials.
Breitbart — by no means an opponent — reports that
Trump wrote on Twitter. “Too much income disparity. Changes must be made, and soon!”…
The president shared a Business Insider video showing the net worth of wealthy CEOs like Amazon’s Jeff Bezos, whose net worth rose by an estimated $48 billion from March to June. The video lists billionaires such as Zoom founder Eric Yuan boosting his net worth of $2.5 billion, while former Microsoft CEO Steve Balmer’s net worth increased by $15.7 billion….
This is the first time the president has indicated that a growing wealth disparity was a problem in the United States that needed to be fixed.
Trump, once an entrepreneur himself, seems to have forgotten that the reward for popular new products is exceptional profits until competitors catch up. The Democratic way — taxes, regulation, and class envy — discourages enterpreneurial innovation.
Trump caves on liability protection for businesses
Nor has the president been doing the economy any good by caving to Mrs. Pelosi on the need to protect businesses from unreasonable lawsuits if employees come down with Covid-19. Kevin Williamson writes:
Republicans have been hoping that Mitch McConnell can deliver a coronavirus liability fix in Washington….
The coronavirus liability shield authored by Senators Mitch McConnell (R., Ky.) and John Cornyn (R., Texas) would redirect lawsuits accusing businesses of exposing employees or customers to the coronavirus, diverting them into the federal system. It would limit the cases to those in which the businesses could be demonstrated to have shown “gross negligence” and would exempt from liability those businesses that can prove they made “reasonable efforts” to comply with government guidelines.
Senator McConnell has held fast to the liability shield, and President Donald Trump did his standard thing of standing tall right up until the moment Nancy Pelosi bullies him into rolling over, which he did on Thursday, offering to support a deal without the liability provision that was, until five minutes ago, the top legislative priority. Instead of having to fight Pelosi, McConnell and Senate Republicans now have to in effect fight the speaker of the House and the president together. As usual, Mr. Art of the Deal cannot figure out how to make a deal with his own team.
Drug prices
Finally, we conclude our round-up of bad news from the White House with this excerpt from a Wall Street Journal editorial, titled “Trump’s Drug Price Panic: He adopts Biden-like controls that would harm U.S. innovation”:
President Trump’s decline in the polls is getting more expensive by the day. The next virus spending bill will cost trillions, and late Friday the President made a pitch for seniors with haphazard executive orders to lower drug prices. His prescription is akin to what Democrats are offering: more government control….
Allowing drugs to be imported from foreign countries where they are sold at lower prices has been a Democratic household remedy for decades and is part of Mr. Biden’s health-care plan….
Most generic drugs are already far cheaper in the U.S. than in Canada, and importing more expensive biologic products presents non-trivial safety risks. Many novel therapies in the U.S. aren’t available in Canada because of government price controls. The same is true of most countries.
https://www.wsj.com/articles/trumps-drug-price-panic-11595798381?mod=searchresults&page=1&pos=8
Après moi le déluge
If this presidential behavior keeps up, Trump, a former Democrat, will not only lose his own re-election bid but bring down the Republican Party as well. He needs a new campaign team and someone prudent in charge of his twitter account. He needs to replace his present economics advisers — Mnuchin, Robert Lighthizer, and Peter Novarro — with pro-growth economists. And if he is going to yield up policy control of his presidency to anyone, a better choice than Nancy Pelosi would be Vice President Pence.
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