What’s Their Economic Policy?

Everybody talks about it but no one does anything about it. Do our two major political parties actually have economic policies?

To the best of my ability to discern Democrats’ economic policy consists of

• Infrastructure spending
• Support for higher education

while Republicans’ economic policy consists of

• Cuts in the personal income tax
• Support for higher education
• Repealing Dodd-Frank

It’s a bit early in the day but the early returns suggest that Donald Trump’s preferred economic policy consists of

• Tax cuts
• Infrastructure spending (which Democrats criticize as consisting of backdoor tax cuts).

Far from being revolutionary, to me that looks like splitting the baby.

Anyone who thinks that infrastructure spending will ipso facto spur the economy needs to go back and re-read what Keynes wrote and said. Nine years is more than enough time for structural changes in the economy to have taken place.

Since “the rich” pay most of the income tax which stands to reason since they have the majority of the income, any cut in the personal income tax is likely to be a “tax cut for the rich”. While I think that is likely to result in greater investment and economic growth somewhere, that somewhere won’t necessarily be in the United States. That’s the real meaning of a global economy. Governments in individual countries don’t have as much control over their domestic economies as they used to.

The idea that higher education is a useful economic policy is one of those things about which you don’t know whether to laugh or to cry. Under that peculiar version of supply side, Field of Dreams, cargo cult thinking, more educated people will naturally result in the creation of more jobs for people with higher education. It hasn’t worked out particularly well so far but who knows?

Its even greater deficiency is that it ignores the two-thirds of the people who won’t pursue higher education or won’t benefit from it if they pursue it. Oddly enough, those people are starting to notice that there’s no place for them in that brave new world. You can fool all of the people some of the time, etc.