President Trump and his advisors admit that there may be short term distress due to the changes they are making, but we should “just be patient.” Let’s take a look at some likely effects of the success of the plans and actions.
Let’s say that the tariffs result in a return of manufacturing and other enterprises to the US from their cheaper alternatives in other countries. Let’s say the industries can quickly build the factories, train the workers, reorganize supply lines, that we can take over Canada and Greenland and Ukraine, giving industries easier access to their raw materials than messy trade agreements permit. Say that this will lead to an increase in the US GDP and that “we’ll be so rich, we won’t know what to do with all that money.” It is unlikely that these sanguine promises will pan out that way, but let’s say they do.
Let’s even further acknowledge that they will slash the Federal budget. Federal workers who administer programs will be separated from payrolls, oversight of American industries and business will be reduced so that owners of these enterprises are nearly completely free to exercise control of their own activities.
What will this new America look like?
US industries have a long history of cost (job) cutting and suppression of worker protections. The substantial initial costs for business repatriation will undermine the willingness of these enterprises to raise wages. Many workers will be replaced by AI drones in the new factories. Those costs will constitute pressure to reduce human employment costs while raising prices for goods. The degree to which earners’ wages rise will almost certainly be insufficient to improve the economic standing of wage workers, front line managers, clerical employees and small businesses. These groups will very likely experience greater debt as they try to keep pace with the rising costs. Combined with these changes is the elimination of regulations of businesses, making the general public more vulnerable to unscrupulous practices.
The reductions to the workforce and offices of Social Security, Medicare and Medicaid will not inspire confidence in the general public. Access to help with specific issues is a source of customers’ negative feelings about private businesses and even more with public agencies.
Medicare replacement plans with their smaller risk pools are likely to result in higher cost and lower benefits. Many of these plans are currently accused of deceptive marketing and denial of care for their customers. These plans are also widely suspected to collude with health care providers to bolster profits over care. Medicaid beneficiaries will find private plans completely beyond their reach.
Large numbers of voters, impatient with the messy work of representative democracy and the technicalities of the rule of law, already support the idea of a strong decisive leader. This strong leader, willing to bypass legislative action, has already exercised powers reserved for Congress under the guise of “emergency” actions.
There are several highly likely effects: elimination or substantial reduction of consumer protections, safety nets, increased costs that outstrip income, increased reliance on consumer debt. I’m unsure of who exactly the “we” who will be rolling in dough might be. Some have pointed out that the strong leader could even declare a national emergency and call off elections. Should the public find the effects of their support more than they asked for, they may find that they have lost the ballot box as a mechanism for expressing a desire for change. Combined, these sorts of changes will fortify the financial insecurity voters already feel. Some will disdain association with the open display of lack of empathy for others. There will be a social climate that amplifies a a sense of betrayal and adds to a socio/political environment characterized by blaming others, financial and personal insecurity, loss of community–the opposite of what many have plainly expressed as their hope.
Steven Walker
Columbia
