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Tuesday, May 18, 2021

What Trump’s critics miss from his presidency

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Business leaders from around the country will gather next week in Nashville to mark Donald Trump’s third year in office, and they’ll likely have little to say about his broader policy legacy. But next to last year’s corporate executives, who were downright appalled at the unexpectedity of Mr. Trump’s election, the biggest takeaways from Trump’s presidency so far will probably be about small business: tax cuts, deregulation and an emphasis on technology are viewed as the main drivers of the economy.

The president, long frustrated with high corporate taxes, signed a bill in December cutting the corporate rate from 35 percent to 21 percent. The White House and Republican lawmakers say it will attract investment that could lead to better wage growth and bring jobs back to the U.S. But studies point to the opposite result: That it will not be nearly enough to offset the losses in the tax rate it will take away from corporate profits, and both arms of the economy appear to be growing at a slightly slower pace than before.

President Trump and Vice President Mike Pence have pointed to other effects of corporate tax cuts: less regulation and more research and development as generators of new jobs. Regulations could, in theory, lead to new products and new jobs. But it is highly unlikely that the administration has achieved any significant cost savings in regulation. None of the research analysts I’ve spoken to about the topic believe that regulation has had any noticeable impact on job growth.

The non-governmental groups who analyze labor data agree. “There is nothing that we see that suggests that [the corporate tax cut] is having a discernible impact on the number of jobs being created or created,” said Mark Zandi, the co-founder of Moody’s Analytics.

The push to lift the tech-adversarial U.S. visa program, the H-1B, has also recently been singled out. The Times’ Alec MacGillis and the Intercept’s Sharon Begley have been among the media outlets that have highlighted research showing the number of visa holders employed in information-technology-related jobs grew by about 5 percent after the program was reformed. The White House press secretary, Sarah Huckabee Sanders, announced this week that the administration would continue to take steps to fix the program. But there is little evidence the number of jobs created in this sector of the economy rose proportionately.

By far the biggest influence on business creation has been President Trump’s obsession with deregulation. He signed over 1,000 executive orders in two years to promote areas like infrastructure and health care, but many of those are slowly ticking through the courts and Congress. His campaign promise to put more coal miners back to work clearly hasn’t happened yet. His pledge to shake up energy policy also never happened, nor did many of the other policies on trade or “entitlement reform” that he promised to shake up.

If Mr. Trump is really focused on innovation and jobs, and not on the tax bill, there are a lot of positive signs that he should consider further regulatory changes and alternative energy programs, including investment in solar power. With the economy growing around 2 percent per year, any sort of acceleration is good news for the economy — even when it comes from outdated ideas that can be changed.

Trump’s personal characteristics have always been often different from those of business executives. But the current reality that his focus on new technologies and “draining the swamp” has allowed him to escape any genuine accountability for what he has delivered to the economy.

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