Sure, President-elect Donald Trump may know little about economic or foreign policy, or about how the U.S. government actually works. But no need to worry, Trumpublicans say. First, Trump's area of expertise is making America great again. And what could be more important than that? Second, he'll hire the best people. Total winners. What could possibly go wrong?
Well... what if the best people fundamentally disagree with each other? That seems likely to happen in the Trump administration since the new president will be relying on a mix of political conservatives and populists for advice. For instance: David Malpass is running economic policy for Trump's transition team. He worked for Presidents Reagan and Bush classic. He's a tax-cut-loving supply sider. Same goes for economic analysts Larry Kudlow and Steve Moore, who helped develop Trump's budget-busting tax plan. Put Vice President-elect Mike Pence in this group, too. These guys like taxes low, regulations minimal, trade free, and immigration open. This is the "I love the '80s" crowd.
Then you have the "economic nationalists," most notably Breitbart boss and Trump campaign CEO Steve Bannon, soon to Trump's chief White House strategist. He sees the past three or four decades not as a time of Reaganite revival but rather a period when "the globalists gutted the American working class and created a middle class in Asia," as he recently told journalist Michael Wolff. And rather than tax cuts or Silicon Valley startups being the keys to growth, Bannon thinks it's government spending on roads and bridges: "The conservatives are going to go crazy. I'm the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it's the greatest opportunity to rebuild everything. Shipyards, ironworks, get them all jacked up."
Also on the populist or economic nationalist team are anti-China economist Peter Navarro, immigration restrictionist Sen. Jeff Sessions, Trump's choice for attorney general, and likely Commerce Department pick Wilbur Ross, a billionaire investor who has praised Trump's protectionist views.
Now, there's no question Trump ran more as an economic nationalist than Reaganite conservative. He talked a lot more about the evils of globalization than the wonder-working power of tax cuts. Indeed, Trump, like Bannon, describes recent decades as time of economic decline. For him, America was last great in the 1950s and 1960s, when Big Steel and Big Coal were dominant.
But what version of Trump will we get as POTUS? Will he listen to the old-school conservatives or the old-school populists?
The likely answer is both. He'll cut taxes and boost infrastructure spending and rip up trade deals. He'll be America's all-of-the-above president.
But all those pieces might not fit together so well. More spending might boost economic growth, but also result in higher interest rates from the Federal Reserve and a stronger dollar. That could hurt many U.S. manufacturers and blue-collar workers. And how does a tax plan that cuts taxes by $1 million for the top 0.1 percent and by just $1,000 for middle-class households fit into a populist agenda? There's also only so much time to act and political capital to spend for a new administration. What doesn't get done? Repealing and replacing ObamaCare? Gutting the Dodd-Frank financial reform law? Ivanka's paid leave plan? What's more, the GOP Congress will have its own ideas and priorities — and major concerns about the massive projected budget deficits baked into Trumponomics.
And, frankly, none of these nostalgic impulses really addresses America's modern challenges. For instance: How much time will the Trump administration spend on reworking old trade deals versus figuring out how to prepare American workers for the rise of the robots? And just what are America's infrastructure needs as we move toward a future of driverless cars and trucks? Or what about this: A Brookings analysis found that while Trump won the election, he lost the economy. The nearly 3,000 counties he won accounted for just a third of America's economic activity last year. What is Trump's plan for tackling an increasingly concentrated economy revolving around innovation hubs such as San Francisco, New York, and Boston? Team Trump is too busy talking about the past glories of American steel.
Populist Trump? Old-school conservative Trump? Neither might be what America needs in 2017 and beyond.