The GOP is supposed to get a “whuppin” in the 2018 midterm elections. The Democrats are salivating over a Trump impeachment if they can take over as a majority in the House. History says they can.
But . . . . . .
If the economy takes off as Republicans expect, can the GOP midterm disaster be avoided?
Can The Trump Deregulatory Boom Save The GOP In 2018?
When even The New York Times concedes administration policy is leading to an investment surge, is it time to admit Trump has helped the economy?
From The Federalist: By Jonathan s Tobin, 01/04/2017
When New York Times columnist Paul Krugman made a hysterical election night prediction that a Trump presidency would lead to an immediate downturn in the financial markets from which the nation would probably never recover, most of his liberal audience nodded in agreement.
Krugman has since taken back that foolish guess, but he and other liberal pundits and economists have not backed off the idea Trump and his administration have no idea what they’re doing. No matter how high the Dow went during the last 13 months, Krugman and the rest of the liberal chorus have largely stuck to their prophecies of doom — decrying any evidence otherwise as the result of either Trumpian luck or circumstances beyond his control.
Yet The Times reported in a front page feature Monday that there is now an emerging consensus in the business world, and even among economists, that “a wave of optimism has swept over American business.” And that wave is bringing with it “the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly.”
What’s even more astonishing is that as the story’s headline concedes, this impending boom is being directly caused by “The Trump Effect.” American businesses aren’t, as The Timespoints out, merely happily anticipating the cut in corporate tax rates provided by the reform bill passed last month by Congress. What’s really fueling the upturn, according to The Times, is “the Trump administration’s regulatory pullback.”
Despite the widespread consensus in the mainstream media that the administration has been a disaster on all fronts, Republicans have often singled out regulatory reform as a highlight of Trump’s first months in office. Liberal economists have dismissed this assertion as nothing more than a talking point to reassure Republicans that Trump was, despite his populist tone, trying to govern like a conservative. But, as The Times report points out, the impact of his orders to cut back on regulations that hamstring businesses is real.
Since business leaders are reassured that not only will many Obama-era regulations be cut back, but also that no new arcane rules will be implemented in the next few years, they’re able to plan with confidence. That means more investment, more jobs, and ultimately higher wages for workers in a trifecta that appeals to both big business and also to the needs of the working class voters who were responsible for electing Trump last year.
If even the front page of The Times is prepared to accept that Trump’s policies are having a tangible and positive impact on the economy, then those who, like Krugman, are still denying that the administration’s ideas are working are the outliers.
But if we are on the cusp of a new spurt of growth for the economy that can be credited to Trump, that has big implications worth considering for the midterm elections in 2018, when Republicans are expected by many to take a shellacking.
The impact of Trump’s deregulation is amplified by the way Barack Obama piled them on in the years before him. While Obama wasn’t the first president to use the vast power of the federal government to impose liberal patent nostrums on the business sector, his was easily the most left-wing administration in generations. The period from 2009 to 2016 was one of regulatory overkill, as liberal ideologues throughout the federal bureaucracy skillfully imposed their will on many industries.
The result was a regulatory nightmare that was a godsend to lawyers, accountants, and lobbyists, but added immensely to the cost of doing business in the United States. Just as importantly, the prospect of ever increasing regulation that was neither logical nor predictable made it difficult for even the most financially solid businesses to plan for the future.
The prospect of lower corporate taxes will help businesses and, given Trump’s proven ability to pressure and shame the private sector into doing what he wants, is also likely to result in more investment rather than just stock buybacks and higher dividends. But the ability to plan without the fear that unelected and unaccountable bureaucrats will swoop in with new rules from which there is no easy escape or appeal may be even more important. Without the prospect of unforeseen regulations that can cripple a business and increase costs to the point where new ventures become unprofitable, a decision to invest and to create new jobs, as well as increase wages, becomes a lot more likely.