America is, and has been from the very beginning, a commercial republic. People came here from around the world to make things better for their families. Its greatness is based in part on its goodness, but economic vitality is what has allowed us to extend and expand that goodness to the world. The president was chosen partly because of his business experience.
But currently the growth agenda is taking a back seat to high profile clashes over walls, both border and tariff. Good people can disagree over whether these walls are a good idea, but Americans tend to vote their wallets (and 401ks), and the past couple of months have been hard on the latter. Yes, employment has been great, kudos to the President for that. But employment is a lagging, not a leading indicator. The leading indicators have turned somewhat in the downward direction. If the growth train runs out of steam, the President can kiss 2020 goodbye. His wall might keep illegal immigrants out, but it will not stop the massive migration of swing voters away from him towards the other side if we enter the election season with a weak or contracting economy.
Here's the transcript of my audio commentary on that subject for Townhall Review:
It appears that the economy is slowing down and that markets are signaling even further weakening. I’ve been an economic optimist since the Trump election—especially when he made broad-based tax cuts a priority. But I did warn that the effects of the tax cuts would be short-term unless he continued to push in a pro-growth direction.
But after the cuts, the president instead pivoted towards increasing taxes on international trade. Make no mistake: tariffs are taxes. And as such, they choke growth.
And that’s exactly what has been happening.
Economic growth has gone from a sizzling summer of over 4 percent to an average fall at under 3 1/2 percent and the winter looks like it might be cooling down to under 3 percent.
If—in the president’s language—we want to make America great again—and we really want to beat China, growth is the way to do it.
You can listen to the audio commentary here. Please do so and share it with others. Also, please let me know what you think.