Yes, I thought about that headline before I wrote it. Hey, I read the polls, too, and right now, for Republicans, they’re bad. I understand that the last ten nationwide surveys listed on RealClearPolitics show Hillary Clinton ahead of Donald Trump by an average of 5.5 percent. If that victory margin were to hold, Clinton would win in November with a popular-vote advantage somewhere between that of Barack Obama’s 2008 margin and his 2012 margin—which is to say, an electoral college landslide.
And the news from specific battleground states isn’t any better. As Politico noted on Thursday, “Trump is down nine points in Michigan, 15 points in New Hampshire and 11 points in Pennsylvania, according to three new polls out this morning.” Sad!
Moreover, I can further say—and we probably all agree—that if Trump lets himself get embroiled in fights with judges and Gold Star families, whatever the merits of the argument, that’s losing, not winning. Indeed, as the MSM fans the flames, Trump’s numbers could well get worse.
Okay, that’s the bad news.
Now the good news: Trump is getting back on track on the supreme issue: the economy. In most elections, and certainly in this one, “It’s the economy, stupid.” Indeed, Trump is starting to echo what Ronald Reagan said in 1980: “Jobs, jobs, jobs.” You know, the campaign in which the Gipper defeated an incumbent, Jimmy Carter, by 10 points, carrying 44 states.
So what’s my evidence of this shift for Trump? It came in a news burst that received little attention when it appeared, but should gain in significance over the next three months. I first saw it in The Washington Times: Trump, appearing on “Varney & Co.” on the Fox Business Network, said,
We are going to rebuild our infrastructure… We have bridges that are falling down. We have many, many bridges that are in danger of falling.
Continuing, Trump promised to think bigger, and do better, than Clinton, who has pledged a $275 billion infrastructure plan: “Her numbers [are] a fraction of what we’re talking about. We need much more money than that to rebuild our infrastructure.”
Asked how much more money he was thinking of, Trump answered, “I would say at least double her numbers, and you’re going to really need more than that.”
The next day, August 3, Fox Business’ Stuart Varney followed up on Trump’s idea, describing it as “the private-enterprise version of rebuilding America.” And a few other outlets have picked up on the story, although admittedly, not many.
So if the infrastructure idea is going to take flight, Trump will have to do it himself: He will have to make that his message. It’s up to him.
In the meantime, as we know, new thinking on the economy is desperately needed, because times are hard. University of Maryland economist Peter Morici drills it home with data:
Since 2000, a much smaller percentage of adults are working or looking for work, economic growth is half the pace of the prior 20 years, and average family incomes are down nearly $4,000. Suicides and drug abuse are up… millions of recent college graduates are employed at places like Starbucks and living with parents, and home ownership is at a 50-year low.
So what to do? We can make a long list of needed economic elixirs, including such proven remedies as tax-rate reductions and deregulation. Yet another proven tonic is infrastructure spending. In the words of farseeing investor Clarence Schwab,
One very obvious answer to stagnant real wages and job loss is staring all of us directly in the face—create millions of jobs and higher incomes by maintaining, upgrading and expanding our infrastructure, which is outdated and crumbling.
The American Society of Civil Engineers (ASCE) gives American infrastructure a D+. Because U.S. infrastructure is in such a sorry state, each American family will lose about $3,400 in disposable income this year and in each of the next ten years. To address our nation’s infrastructure crisis, the ASCE estimates that a $1.4 trillion investment gap will need bridging over the next decade.
Indeed, there’s something close to a bipartisan consensus on the value of infrastructure, not only for jobs, but also because, of course, people need to get around. And so Hillary Clinton talks a good game—she was talking it in Pittsburgh, just on July 30.
But for the Democrats today, there’s a catch: Whatever it is, it has to be green. That is, any project must comport with the letter and spirit of all environmental laws—including the Endangered Species Act, which privileges fish, owls, and even spiders over people. And in the Democrats’ mind, no challenge, let alone a rethinking, is permitted.
As we have learned, as far as the Greens are concerned, all the fauna and flora of the world are sacred and must not be bothered, let alone built upon. And then, of course, there are the NIMBYs, who are also privileged above all others—especially if they live in the Hamptons or Malibu.
So now we are starting to see why President Obama’s 2009 “stimulus” was such a fizzle—the Democrats can spend money, sure, but they can’t spend money to build anything. As Obama himself said in 2010, after it was too late, “There’s no such thing as shovel-ready.” Well, actually, in point of fact, he is wrong: If you want to put people to work building things the county needs, all you have to do is start. Unless, that is, you’re a stooge for the Greens; in which case, you will spend your “infrastructure” money not on blue-collar hard hats and machinery, but rather on white-collar lawyers and environmental consultants.
And that’s the reality of the economy today, and Hillary offers more of the same. Indeed, as Joel Kotkin, an ex-Democrat, observes, the Green view of growth is negative; that is, no growth is better:
Increasingly, liberals, or progressives, are at best ambivalent about economic growth, particularly in such blue-collar fields as fossil fuel energy, manufacturing, agribusiness and suburban homebuilding. Bill Galston, a former close advisor to Bill Clinton, notes that party platform “is truly remarkable—for example, its near-silence on economic growth.” In 2012, for example, Democrats touted the environmental and economic benefits of natural gas. This year’s party platform endorses ever-stricter regulation of the industry, while Sen. Bernie Sanders’ faction demands a quickly decarbonized economy.
In other words, today’s Democrats, in the grip of the Greens, are into wealth redistribution and wealth reduction—but not, alas, into wealth creation. It doesn’t have to be that way, of course: The old Democrats, the Franklin D. Roosevelt-Harry Truman Democrats, were all about construction and growth; during the New Deal era, Democrats built Hoover Dam, providing hydropower for the Southwest. And in addition, they built the many dams and water projects of the Tennessee Valley Authority, not only boosting the Southeastern economy, but also helping to rid Dixie of malaria.
But that was then; as I wrote here at Breitbart in May, recalling the Democrats’ pro-growth development platform of 1948, what was beloved then is hated now:
Looking back at that 68-year-old document, it seems fair to say that not only would today’s Democrats not endorse such an agenda from their president, but they would probably seek to impeach him for such pro-growth efforts.
All right, so today, if the Democrats have enviro-priorities, then Republicans are the only game in town, growth-wise.
And so back to thinking big, thinking about Making America Great Again. We can quickly see that MAGA requires capital. And that means investment. But from where will the money come? Yes, tax-rate reductions, on individuals and businesses, are a help to investment, but what if the money gets invested, not in the U.S., but in Mexico—or China? Until that question can be answered in a satisfactory way, many, perhaps most, Americans will be skeptical of, even hostile to, upper-bracket tax cuts.
Okay, so where else could the cash come from? Trump’s answer this morning was genius: “infrastructure bonds.” Continuing, Trump said,
We’re going to have to go out with a fund, we’ll get a fund. We’ll make a phenomenal deal with a low interest rate. And we’re going to have to rebuild our infrastructure. We have no choice.
Yes, that’s the right answer, because borrowing has never been a better bet: The current rate on a 10-year T-Bill is about 1.5 percent, and the rate on a 2-year T-Bill is below 1 percent. And why are interest rates so low? That’s a complex question, but a lot of it has to do with slow economic growth; as The Wall Street Journal noted late last month, this has been the slowest economic “recovery” since World War II.
So with money that cheap—factoring in inflation, interest rates are actually negative—we’re silly not to borrow it for things we need anyway, including jobs.
This has been a point long made by many, including this author. In the past, I have described the opportunity of borrowing, not only for infrastructure, but also other purposes, such as medical cures research.
And others, too, are speaking out. One such is Clarence Schwab, the public-spirited visionary quoted earlier. Schwab offers the following intriguing calculations, outlining a win-win for America:
Let’s say the federal government borrows $1.4 trillion for an infrastructure program by issuing 30-year bonds at our current extraordinarily low interest rates. Once these funds were fully invested, American family disposable income would increase by up to that $3,400 annual figure. If families were to spend this additional disposable income, incomes in the economy would increase because one person’s spending is another person’s income. Federal tax receipts would, as a result, increase by up to about $100 billion each year in total, (assuming a 25% tax rate), given about 126 million households.
The federal government could thus receive $3 trillion in tax receipts over thirty years. That would pay all the interest costs and repay the entire $1.4 trillion of debt incurred. But that is not all. Wage earners would also see immediate additional benefits because the $1.4 trillion injected into the economy would generate additional income and jobs.
More infrastructure? More jobs? More revenue? The Schwab Plan sounds like MAGA to me. And Trump, following in the footsteps of one of his favorite presidents, Dwight Eisenhower, the man who built the nation’s great interstate highway system, gets it.
Of course, there’s always the question of waste, fraud, and abuse. And to that, there’s an overriding answer: Keep the Democrats far away. Of course, some will say that even under Republicans, there’s the risk that infrastructure money will be misspent. And that might be so—in a pluralistic democracy, things can get messy. Yet at the same time, we need action: One must never let the perfect be the enemy of the good.
Indeed, Republicans ought to realize that today, in 2016, there’s a much greater risk than a pork-barrel project somewhere: Namely, that Hillary and the Greens will win. After all, the Democrats have a proven formula: They have built a mighty, albeit rickety, coalition of Greens, professors, public employees, plus George Soros and Al Sharpton. As we have seen in four of the last six presidential elections—five of the last six if you go by popular vote—this is a winning formula for the Ds.
So it’s time for the Rs to try something different. And Trump, for all his flaws, is wise to that. And we know, if you get a few big things right, those big things have a way of, uh, trumping the little things.