How could Donald Trump deliver on his promise to fix the U.S. economy? On Day 1, the president-elect should simply proclaim he’s already fixed it — and go play golf.
By which I mean: Declare victory but do absolutely nothing else. Execute none of the economic policies he’s promised and appoint no one to carry them out. Because right now, the U.S. economy is already pretty damn good, and mostly just needs a hype man. Not a global trade war, or any of Trump’s other destructive, economy-crashing ideas.
Inflation helped propel Trump to victory on Tuesday. In exit polls, one-third of voters said economic concerns were their top issue. Nearly all of these voters reported casting ballots for Trump. They were apparently convinced by his promises to deliver “cheaper” groceries, “higher” paychecks and “richer” communities.
In the hours following Trump’s victory, Wall Street analysts (such as Goldman Sachs, Capital Economics, Pantheon Macroeconomics, etc.) scrambled to revise their economic forecasts. Alas, they have almost uniformly predicted the opposite of what Trump promised. They adjusted their forecasts for prices upward and for economic growth downward. In fact, Treasury markets began pricing in higher inflation as soon as the election was called.
Oops.
These revised forecasts are based on Trump’s major economic policies, most of which are expected to be inflationary and/or growth-killing. They include implementing a universal tariff increase of 10 to 20%; deporting tens of millions of immigrants, who disproportionately fill jobs in agriculture and construction; and politicizing the Federal Reserve, which controls the money supply.
Trump also plans generous corporate tax cuts, which could modestly stimulate the economy in the near term. But longer-term, corporate tax cuts are unlikely to boost economic growth much. “Lower corporate taxes (are) more likely to boost dividends and stock buybacks than investment,” an analysis from S&P Global this week found.
Such tax cuts would also widen budget deficits, contributing to more inflation and higher interest rates.
If Trump’s economic agenda is so disastrous, voters might ask why is the stock market surging? The answer: The stock market is not the economy. Its boomlet is likely linked to expected corporate tax cuts. (Stocks are effectively a claim on the long-term profits of a firm, after taxes have been paid; if corporate tax rates fall, stock prices should rise pretty much by definition.)
Americans might also be skeptical of these forecasts because they already lived through a Trump-helmed economy. And it was pretty good! (At least pre-pandemic, anyway.) We had low inflation and low unemployment.
But one reason the economy was good then is because Trump didn’t do what he’s promising now. When he tried to do versions of these policies, aides, lawmakers and courts often restrained him.
For example, Trump threatened to fire his own Fed chair. This could have sparked a global financial crisis and permanently damaged the central bank’s ability to rein in inflation. Fortunately, Trump’s treasury secretary Steven Mnuchin, among others, thwarted him. Likewise, Trump economic adviser Gary Cohn swiped trade documents from the Oval Office desk before Trump could see them.
Many of those darker economic forecasts about a second Trump term assume he would successfully deliver this time on his worst ideas. This might be a reasonable assumption; there will likely be fewer “adults in the room” in the next four years.
But Trump is also lazy. And historically, his lackeys have often been incompetent, sloppy or prone to falling asleep in meetings. If we’re lucky, maybe a second Trump administration would just stick to what he does best: marketing. Because what this economy needs most is a salesman.
Whether or not Americans recognize it, grocery inflation is already way down. Wage growth has already been outpacing inflation for more than a year. And the economy is already growing at a healthy pace. As a result, the U.S. economy is the envy of the world.
Americans nonetheless rate the economy quite poorly, perhaps because they’re still recovering from the 2022-2023 inflationary shock. But if current trends continue, and wages continue to rise, at some point they’ll notice their incomes are outrunning price growth. Who better to draw attention to this — while of course taking credit — than Trump?
In fact, since his supporters live in a parallel media system, Trump could even lie and say he already did all the dumb policies he promised, and that’s why the economy is suddenly so grand.
Just pretend to kick out all the immigrants and raise tariffs, without carrying through. It’s not like Fox News or Joe Rogan would ask follow-up questions.
Sure, some annoying nitpickers (ahem) might point out that the “Trump economy” come January 2025 is more or less the same as the Biden-Harris economy of fall 2024. But who cares? Much better to have Trump take credit for the good economy he inherited, than deliver the economic catastrophe his agenda foretells.
Email: crampell@washpost.com.