After Trump

Never say Never. That’s what some of the Never Trumpers are saying, and even more are thinking. Both in private. They are afflicted with a nagging suspicion. Trump might, how shall they whisper it, Make America Great Again.

The tax bill has given the economy a bit of a tailwind, most Americans have more money in their pockets, and corporations have greater incentives to step up spending and to bring some funds home. The NAFTA trade agreement with Mexico and Canada likely will be revised to America’s advantage. The president’s decision to punish Assad for crossing the red line that Obama refused to enforce is popular and his decision to defer to his military advisers and keep the response targeted so as not to induce a response from Russia has met with broad approval. His threats against North Korea-my nukes are bigger than your nukes-appalled the fastidious members of the establishment diplomatic community, but have led Kim Jung-un to say he will shut down a nuclear test site, suspend all missile tests and negotiate a peace treaty with South Koreas.

Then there is China. Trump has done what previous administrations failed to do: forced China to make some concessions, opening at least a crack in the wall it has erected against imports. Majority-owned American financial firms will gain entry into several sectors, and tariffs on made-in-America automobiles will come down, while the United States tightens restrictions on intellectual property theft by the Chinese regime, in part by limiting China’s ability to buy tech-heavy U.S. firms. Even dyed-in-the-cotton-apparel free-traders are now conceding that the president’s negotiating tactic-threaten to bring down the international system, unless it gets fixed-is working. And should have been tried administrations ago.

These successes, many that could turn out to be less substantial than they now appear, don’t mean that those offended by the Trump tweets, by his vulgarity, by his economy with the truth long after it has been made clear to him that his preferred narrative is plain wrong, will vote for him. Or that conservatives are reconciled to his assault on government institutions, the checks and balances built into the system, and the civil tone that a successful democracy must maintain if it is to survive. They do, however, mean that re-election in 2020 is now more likely than it has been in several months, especially since the Democratic wannabes are forming a circular firing squad in preparation for a series of primary fights for their party’s nomination.

So here is BT and AT:

Before Trump, Assad could use chemical weapons with impunity; after Trump, he pays a steep price. BT, China could plunder American intellectual property and disregard the rules of the trading system that it has manipulated in its rise to power; AT, it fears Trump’s tariffs sufficiently to begin modifying its unfair trading practices. BT, Russia could wage cyberwar on the U.S. electoral system without fear of response from America; AT, Putin and his oligarch cronies find themselves being cut off from access to the world financial system. BT, the economy was mired in sub-trend growth; AT and his tax cut, growth is up. BT, in the post-war years most presidents projected a dignity of sorts; AT, presidential dignity is not even considered a virtue.

Which brings us to the longer-run economic consequences of President Trump. His critics are surprised and relieved at his unwillingness to use the many appointments available to him to change the nature of the Federal Reserve Board. Instead, he chose mainstream, well-qualified candidates, and filled Janet Yellen’s chair with an existing board member supportive of her policies.

Trade policy is a different matter. Out with the old, in with the new-perhaps more properly called in-with-the-bad-old-days. First, he has linked trade to the other policies of our trading partners. Allies can be exempted from steel tariffs, those who have been unhelpful on defense or other policies, remain targets. Second, he has made it clear that America now prefers one-on-one trade negotiations to large multinational agreements. Third, he is willing to bear short-term pain from retaliation in pursuit of long-term gain in the structure of the trading system. Finally, and against the advice of almost all economists except Peter Navarro, his principal trade adviser, the metric he uses to measure success is the bilateral trade balance with each partner, a metric most economists deem conceptually flawed. The effect of this new approach to trade has yet to be determined, but it is listed in the recent report of the International Monetary Fund among the risks to continued satisfactory global growth.

Then there is his effect on the nation’s finances. Unless the tax cuts prove to pay for themselves by generating much more rapid growth in productivity-enhancing investment-which is possible, but not probable-the nation’s debt pile when Trump returns to Trump Tower will far exceed the pile he inherited (and railed against). If “deficits don’t matter,” as then-vice president Dick Cheney once said and Democrats believe in their heart of hearts, Trump has done the nation no harm. If red ink by the gallon does at some point trigger inflation, forcing the Fed to raise interest rates and slow growth, he will have done quite a bit of harm. Which is what the IMF expects, noting in its report released earlier this week that loose fiscal policies “will eventually need to be reversed” if growth-stifling consequences are to be avoided.

Finally, there is the effect of the president on our political system. Democrats’ loathing of him and the “deplorables” living in the fly-over country has driven the party even further to the left. Meanwhile, Republican voices that once took principled stands against deficits and in favor of free trade, have been silenced lest they antagonize the Trump base. That, plus numerous retirements by centrist Republicans, takes the party out of the hands of conservatives, whose fidelity to the institutions that have thus far constrained Trump from converting tweets into policy could be counted on.

The prospect of years of tussle between Democratic leftists with open immigration, big government, and super-progressive social policies, and Trumpites with nativist attitudes and little regard for the moral code that has guided most past presidents is not one to which most Americans are looking forward.