Donald Trump promised the American people a transformative change in economic policy after eight years of stagnation under Obama. But he didn’t adopt a conventional left or right economic agenda. His is a new economic populism that combines some conventional Republican ideas–tax cuts, deregulation, more power to the states–with more traditional Democratic issues such as trade protectionism and infrastructure spending. It also mixes in important populist issues such as immigration reform, pressuring the Europeans to pay for more of their own defense, and keeping America first.
In Trumponomics, conservative economists Stephen Moore and Arthur B. Laffer offer a well-informed defense of the president's approach to trade, taxes, employment, infrastructure, and other economic policies. Moore and Laffer worked as senior economic advisors to Donald Trump in 2016. They traveled with him, frequently met with his political and economic teams, worked on his speeches, and represented him as surrogates. They are currently members of the Trump Advisory Council and still meet with him regularly. In Trumponomics, they offer an insider’s view on how Trump operates in public and behind closed doors, his priorities and passions, and his greatest attributes and liabilities.
Trump is betting his presidency that he can create an economic revival in America’s industrial heartland. Can he really bring jobs back to the rust belt? Can he cut taxes and bring the debt down? Above all, does he have the personal discipline, the vision, the right team, and the right strategy to pull off his ambitious economic goals? Moore and Laffer believe that he can pull it off and that Trumponomics will usher in a new era of prosperity for all Americans.
|Publisher:||St. Martin''s Publishing Group|
|Product dimensions:||5.60(w) x 8.30(h) x 1.10(d)|
About the Author
Stephen Moore and Arthur B. Laffer are the economists behind the job creation platform that brought Trump to victory. Stephen Moore is a former member of the Wall Street Journal's editorial board, and the Distinguished Visiting Fellow for The Heritage Foundation's Project for Economic Growth. Arthur B. Laffer, the Father of Supply-Side Economics, was a member of Reagan's Economic Policy Advisory Board. Moore and Laffer are coauthors of Trumponomics.
Read an Excerpt
In early March 2016 the three of us (Arthur, Larry, and Steve) got urgent calls from our longtime friend Corey Lewandowski. Corey was a political activist and organizer extraordinaire, who had worked as the state director in New Hampshire for Americans for Prosperity, a major national taxpayer organizing group.
Corey had been tapped to be the campaign manager for the upstart, long-shot Donald Trump for president campaign. His message for us would change our lives. "Donald Trump would like to meet the three of you," Corey explained. "Could you meet him at four p.m. next Tuesday at his office in Trump Tower in Manhattan?"
Wow. That was unexpected. When Trump had announced his run for the White House — about six months before — we, like most people, thought it was mostly a publicity stunt. Trump was saying some headline-grabbing things, throwing out a blizzard of populist policy ideas for the American people to chew over: "Build the wall." "Repeal NAFTA." "The biggest tax cut ever." Meanwhile he was drawing massive, excited crowds at his political rallies across the country.
Donald Trump, although politically inexperienced and disdained by the Mediocracy and the professional political class, was somehow connecting with millions of voters. Rival candidates (perhaps with the exception of Bernie Sanders) were in denial and ignoring the signs of voter unrest at their own political peril.
We were initially anything but devoted fans. He was part of the New York City scene and had never taken on a significant role in the conservative free market movement. Trump's statements seemed to us to be all over the map, a pastiche of conservative and progressive ideas. True, we were iconoclasts ourselves, and some of our own ideas — our advocacy of a more open legal immigration policy and our confidence that economic growth could balance the budget — were considered borderline heretical by some factions of the conservative coalition to which we belonged.
All three of us had written columns and research papers that had been critical of several of Trump's positions, especially on trade. We were and are staunch free traders. Larry and Arthur had met Trump on many occasions in the past and liked him very much personally. Steve had never met Trump and was somewhat turned off by his brash, media-hogging style.
But all three of us were intrigued by the grassroots political movement that we now know as Trumpism, which was building throughout the country. And we liked what he was saying about chopping tax rates and restoring American greatness. We had openly supported his big ideas on changing the IRS tax code. Trump (and Corey) had taken notice of our public praise.
In several early major primary events, Trump had called out Larry by name. "Larry Kudlow loves my tax plan," Trump had thundered several times in debates and rallies. Larry, on CNBC, was one of the first economic analysts to give Trump credit for some bold reform initiatives on taxes and rolling back unnecessarily burdensome government regulations. Similarly, Trump had gloated to conservative audiences: "I got my tax ideas from the great Reagan economist Arthur Laffer."
We also loved Trump's unyielding optimism about America's potential for much faster economic growth, which would pull us out of the slow-growth ditch the nation had careened into during George W. Bush's last years in office and Barack Obama's entire presidency.
Trump was proclaiming that we could get to 5 percent growth with the right set of pro-business policy ideas. Though we thought that 5 percent was overly optimistic (we thought 3 to 4 percent was definitely doable), we loved the aspiration! We recognized that Trump, as a real estate developer who built skyscrapers and five-star resorts, thinks very big and does not shy away from dramatic license. The October 6, 2016, issue of The New Yorker (in an obvious attempted character assassination just before the election) reported Trump saying to [architect Der] Scutt, ahead of a 1980 press conference, "Give them the old Trump bull[s*&%]. Tell them it is going to be a million square feet, sixty-eight stories ..."
We certainly agreed — wholeheartedly — that the economy could grow much, much faster than most economists believed. The standard trope on the left at the time was that 1 to 2 percent growth was the best America could achieve. After all, if the left's political messiah, Barack Obama, couldn't get the economy moving faster, how could a mere mortal like Donald Trump presume to?
We were ecstatic that finally someone was frontally assaulting the tyranny of low expectations that sold America short. And we loved that Trump seemed to relish that the professional political class ridiculed his Make America Great Again (MAGA) theme. We did not agree with all Trump's policy prescriptions. That said, he certainly had all the right enemies attacking him.
So, yes, we told Corey, we definitely wanted to meet with candidate Donald Trump.
A few days later we arrived at Trump Tower in New York City and sifted through the massive security detail and what seemed like a tsunami of media cameras in the lobby, heading up to the twenty-sixth floor ... and Donald Trump's personal office.
One thing especially impressed us immediately: everyone around him seemed to love Donald Trump. Trump treats his people well.
It wasn't an act. The Trump team displayed genuine affection for him, affection clearly mirroring his for them. You can tell a lot about a person from how he treats those who work for and with him every day. The vibe of deep mutual respect and obvious affection was telling.
We encountered no arrogance or stiffness. Team Trump was uniformly made up of polite and sweet people, all instantly likable, including our now good friend Rhona Graff, Trump's longtime personal aide and one of his greatest assets.
Donald Trump, also, was punctual.
Our meeting was scheduled for four p.m. At 4:05, Donald Trump came bounding out of his inner office and pumped our hands up and down with an affectionate handshake and a charming smile. While at the Wall Street Journal, Steve Moore had once interviewed the famous college basketball announcer Dick Vitale — the live-wire personality with boundless energy and enthusiasm about everything. Trump seemed to Steve to be a political version of Vitale. We were a bit humbled by this warmth.
We immediately felt at ease as Trump ushered us into his office and excitedly showed us around. Trump's office is like a museum filled with sports and entertainment memorabilia. He shared with us footballs and photos with (and many signed by) George Steinbrenner, Joe Namath, and other sports legends. The wall was also covered with dozens of framed magazine covers — from GQ to Esquire to New York magazine and on and on — featuring Donald J. Trump. The man loves his celebrity status — and no one has ever played the media better, as we would soon discover.
There were just us and Donald Trump in his office. He included no aides, no "handlers," no self-important people tapping on tablets. He wanted to take photos and sign books, and it was all very engaging. We were surprised that, though he was arguably the busiest person in America at that moment, he acted as though he had all the time in the world for us.
Then our host sat down behind his giant desk and hunched toward us — in his signature style. He began to pepper us with questions about the economy and what we thought of his campaign. "How am I doing?" he asked, as he always did throughout the campaign. He proved inquisitive about everything. "What do you think of my tax plan?" "Is the economy headed to a recession?" "Don't you think we have to worry about China?" "We're doing great in the polls, have you seen our numbers?" (Yes, Trump showed an obsession with the polls.) "What should we do about the deficit?" "Should I keep Janet Yellen at the Fed?" Trump didn't lecture us. He asked for our opinions, straight up. He listened. When he disagreed with us, he would challenge us. Donald Trump, while open-minded, is nobody's pushover.
One of the first things Steve said to him was: "I just attended one of your rallies a few weeks ago and met a lot of the people there. Donald, I don't know if I love you, but I sure love your voters." Trump almost burst out of his chair. "I love these people too. They're the greatest Americans, aren't they? They love our country." (Now you know why he loves to do political rallies even as president. It recharges his batteries.)
The next thing we said to him was: "Thank you for sticking by Corey Lewandowski." Corey at that time was under attack from the left, unfairly so, for allegedly assaulting a reporter away from Trump at a rally. It was a preposterous charge, obviously designed to undermine Trump, by separating him from the talented and loyal Lewandowski. The sharks were out to get Corey.
To his credit, and astutely, Trump stuck with Corey through the thicket of slander. Shrewd move. In return, Corey helped mastermind one of the greatest upsets in modern American political history: Trump's winning the GOP nomination. History might show this to have been an even more herculean challenge than Trump's winning the general election.
We discussed trade. Trump knew full well we were on the free trade side, while he publicly and stubbornly declared that he was more for "fair" than "free" trade. A few months earlier Larry and Steve had penned a piece in National Review called "Smoot-Hawley-Trump," arguing that Trump could wreck the economy should he follow in the footsteps of Herbert Hoover, the last (and disastrously!) protectionist president. Hoover signed the infamous Smoot-Hawley tariff. That bill exacerbated the Great Depression by inciting a global trade war.
Don't go there, Larry and Steve had unflinchingly written. It was a tough piece and he clearly knew about it. Yes, Trump is always attentive to any criticism — especially when it comes from his friends. (He reminded us a little bit of our late friend Jack Kemp, who took every criticism personally.)
Arthur had been nervous too. He had written an article later that year noting, "I know of no politician who understands a single word of the benefits of trade or even how to think about trade ... trade is not about jobs at all or even about total employment, but instead trade is about the value of income." As you can see, free trade is something the three of us were and are very passionate about in the realm of good economic policy.
Trump briefly articulated his concern that countries like China and Mexico were "eating our lunch." When we suggested that he was flirting with protectionist tariff policies, he held out his arms and seemed slightly insulted. "I am not a protectionist," he insisted. "But China isn't playing fair." We weren't persuaded, but he had a point. For instance, both Japan and China utilize non-tariff barriers to trade and manipulate their currencies in ways that actually do hurt the U.S. economy. Trump wasn't just shooting from the hip. He knew his stuff.
Politely, we reminded him that he would want to steer clear of a trade war, an event that could crash the stock market and slow the economic growth on which he had so convincingly campaigned. We felt then and now that, at the very least, our arguments have given him some food for thought.
Trump wanted to talk in depth about taxes. We liked his tax plan. We wished to persuade him of the benefits of a more comprehensive tax reform that would also close loopholes. This was our message to all the GOP candidates. We had delivered this tutorial to every Republican presidential aspirant who had asked for our help on tax policy. The only notable exception in the field was Senator Marco Rubio, whose tax plan was tilted more toward tax credits than supply-side growth.
We assured Donald Trump that a business tax cut would help most dramatically to restore American economic growth. He asked how big of a tax cut we could afford. We told him to go as big as possible ... to get the economy jump-started and to help middle-class workers. "Don't get stressed out by the phony numbers of Washington's bean counters," Larry instructed. "They are always wrong. And the benefits of a higher economic growth rate far outweigh the cost of short-term deficits." This principle has become a pillar of Trumponomics. We strongly contend that it is the right way to examine tax policy changes. To paraphrase legendary football coach Vince Lombardi, "Growth isn't everything; it's the only thing."
Larry stressed repeatedly that the big winners from a business tax cut would be workers, who would command higher wages. If a company has 19 trucks and now, thanks to a tax rate cut, has the money to buy a twentieth, that's one more truck driver the firm will have to hire. Trump's a businessman. He got it.
Trump had already articulated the rough outline of a campaign tax plan. He told us that most of the ideas had come from the campaign's discussions with Arthur. We considered the plan to be a diamond in the rough and very much liked its broad outlines. The Trump campaign's rough sketch stressed a 15 percent tax rate on corporations and a lowering of rates for workers and small business owners. He said very emphatically — at least twice: "I'm for cutting the corporate tax, but I want to make sure that every small business in America also gets a tax cut." We admired his instincts on this. About two-thirds of jobs are created by small firms with fewer than 100 employees. Plus, as a matter of politics, Americans love small business, but they aren't too fond of corporate America — big business — which voters think too powerful, too fat, and too dumb and happy ... often with good reason.
Then he cut to the chase: Could we refine his tax ideas so that the reforms provided the biggest bang for the buck but still included revenue-raising base-broadeners and loophole closings so that the numbers added up?
Sure, we replied. We would be honored to. We promised to get to work putting some meat on the bones of his tax plan and to crunch the numbers to make sure that this could all be done without unduly increasing the federal deficit. We assured him we would give him dynamic scoring, taking into account the larger national output and job base that one could reasonably expect as a consequence of the tax rate cuts.
Trump, ever the no-nonsense business exec, wanted us back to show him our calculations in a mere two weeks. Short fuse, but justified by the calendar imposed by the presidential campaign itself.
As we walked out, he put his hands across our shoulders, like a big brother ... or a football coach. Like, for instance, Vince Lombardi.
Our meeting had lasted about 50 minutes. We each felt strangely exhilarated. We know well two years later that the very charismatic Donald Trump has that effect on people. He isn't the bully or the egomaniac that he sometimes plays on TV or is portrayed as by his adversaries. (Yes, sure, he does crave affirmation, and he does have a big ego.)
We sensed that he instinctively "gets" what makes an economy work. Clear away the excessive government taxation, bureaucracy, red tape, and inane rules ... and much faster growth is possible. Trump knows this not from studying economics books but from his own business background and his many interactions with government agencies in Washington and New York City. Economists and politicians only study and talk about the economy, which is made up of Donald Trump and people a lot like him! It is doers and risk takers like Donald Trump who put our ideas into action. Love him or hate him, Donald Trump has New York street smarts — and that's worth a lot.
This surely injures the vanity of the Ivory Tower snobs. Yet when it comes to getting the job done — creating jobs and economic growth — the voters were starting to show more smarts than the intelligentsia.
Sure, we disagreed with him on trade and on some of his tough-on-immigration policies. But in so many ways he sounded to us more pro-growth and more pro-business than any other presidential aspirant in the field. In fact, to us he sounded more pro-growth than any other candidate since Ronald Reagan.
And there was something else. The two of us have been around politicians all our working lives. We've met all the presidents since Reagan. Arthur goes back to President Nixon, whom he worked for in the White House under George Shultz. In fact, Arthur has a Camp David windbreaker given to him in 1971 when he was involved in the formulation of Nixon's "New Economic Policy," which included the temporary closing of the gold window.
As mentioned earlier, the three of us have worked with scores of governors, senators, congressmen, even mayors. We've vetted hundreds of candidates for public office. We have developed a pretty good sixth sense of what a winner looks like. Winners project a certain aura, a sense of confidence, and a connection with the voters.(Continues…)
Excerpted from "Trumponomics"
Copyright © 2018 Stephen Moore and Arthur B. Laffer.
Excerpted by permission of St. Martin's Press.
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Table of Contents
Foreword Lawrence Kudlow vii
1 Meeting Trump 6
2 Battle Scars from the Biggest Political Upset in American History 30
3 Obamanomics and the Assault on Growth 58
4 What Is Trumponomics? 90
5 Designing the Trump Tax Plan 107
6 The Tax Cut Heard Round the World 140
7 Deregulator in Chief 187
8 Saudi America 208
9 The Art of the Trump Trade Deal 246