How the GOP failed the Rust Belt and let Trump rise

posted at 8:41 pm on March 28, 2016 by Taylor Millard

There’s a new piece from Charlotte Allen at USA Today talking about why she, a Stanford grad, is supporting Donald Trump. It’s the typical pro-Trump piece (he’s capitalizing on the GOP’s failures in immigration and the Rust Belt, oh, and free trade sucks!) without really looking into why Republicans have failed at defending their own values. Allen believes that failure is one reason why the Rust Belt is flocking towards Trump, and she has a point. The problem is she believes illegal immigration and job outsourcing is why the Rust Belt is flailing, without looking at maybe it’s because the government is too involved in regulations and taxes. This is as much of a Republican problem as it is a Democrat problem, which is why the Rust Belt is rusting.

The Environmental Protection Agency was the creation of Richard Nixon in 1970, who consolidated 13 different federal bodies into one monstrosity of an agency. Nixon’s reasoning for the EPA, as well as the National Environmental Policy Act, was because it was “now or never” for America to reclaim “the purity of its air, its water, and our living environment.” This is important because of what the EPA has grown into, and how its regulations make it harder for things in the Rust Belt to survive. There are 141 pages of regulations alone for cooling water intake structures inside facilities, plus 106 pages for toxic substances. Another creation of Nixon’s, the Occupational Safety & Health Administration, has thousands, upon thousands of regulations looking at everything from wood and metal ladders to how alarm systems should be put together. Sure sounds like Nixon believed the solution to solving workplace safety hazards and the environment was more government, instead of promoting social change from within the industry or simply watching out of date companies go out of business.

If you contrast the U.S. regulations with China’s it’s no wonder why businesses are fleeing there. China has a 13-chapter Labor Law, but these “chapters” are so small it’s much easier for businesses to understand. It makes sense for American businesses to make deals with Chinese businesses to avoid the legal pitfalls here in the U.S. It’s honestly smart business to do this because it cuts down on major costs brought about by both federal, state, and local regulations. Trump likes to talk about how America is “losing” to China, but a simple way to “start winning” is to loosen up regulations here. This gives companies more of an incentive to keep plants operational in the Rust Belt and more people employed.

The Left is going to start crying foul about the regulations, but I think being kind to the environment is so ingrained into the minds of Americans, they’re likely to keep most “clean air” regulations going. Yes, there are going to be bad actors out there, but that’s where the press and word of mouth is such a big deal. Remember, Upton Sinclair once said he “aimed at the public’s heart” when he wrote The Jungle in 1906 as a critique on meat packing plants. He wasn’t trying to get the government involved in, but wanted public outcry to change the way business was done. This is why a free press is so important because they can be the ones to report “misdeeds” by businesses, and leave it up to consumers to decide whether they want to keep buying from said business or not.

The other reason why corporations are getting out of the U.S. has to do with taxes. The Tax Foundation reported last year how the U.S. has the third largest corporate tax rate in the world, with only Chad (40%) and United Arab Emirates (55%) higher. China’s corporate tax rate is 25%, while Mexico’s is 30%. Canada’s is down to 26% and the Tax Foundation found it was bringing in more revenue than the U.S. This doesn’t even bring into account Michigan’s corporate tax rate of 6% or Illinois’ 7.75% rate or Wisconsin’s 7.9% tax. Corporations may be able to take advantage of certain loopholes to cut down costs, but they’re still paying taxes and a lot of them. If Trump really wanted to encourage American businesses to stay American, he’d encourage Congress to lower tax rates (and cut spending). His suggestion of a 15% corporate tax rate is a good start, but requiring a 10% repatriation fee only encourages businesses to stay abroad. It might sound good with American workers, but it’s questionable whether corporate executives will go for this.

This is why the GOP has “failed” the Rust Belt. Instead of being in touch with free market principles, Republicans have consistently failed to adhere to them. Maybe that’s the only consistent thing the GOP has been good at: failure to stick to what they believe. But voters have also failed at holding the “leaders” accountable and let them get too cushy in DC. This is why Trump is leading in the GOP race, but Americans need to understand why things are so complicated and how to fix the problem. It isn’t because of “evil corporate leaders,” but a combination of government interference and economics. The key point is figuring out a way to message it towards people in the Rust Belt, whether they’re small business owners or just the guy working a factory plant job. Maybe the solution is just sitting there and saying, “Hey…here’s why things aren’t working,” then going into math, but I’m not 100% sure. The facts are complicated, but the solution is simple IF people are willing to go for it. This means holding politicians accountable for their mistakes and staying involved in politics (and taking the occasional break). There’s responsibility on everyone, it’s just a question of who is willing to do it.

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