Donald Trump’s transition team has been working at a remarkably fast clip in filling in his Cabinet and national-security posts. His soon-to-be VP Mike Pence tells the Wall Street Journal that they hope to work as quickly on policy after January 20th. Their immediate agenda includes the expected 100-day items, such as the repeal of ObamaCare and the nomination of a Supreme Court justice to fill a seat that will have been open for a year by that time. After that, the focus will fall on the economy:
His comments also suggest that a Trump White House would eschew many of the free-market principles that have guided prior Republican administrations, including injecting itself into the personnel and long-term operating decisions of individual companies.
The new administration’s first priorities would include curbing illegal immigration, abolishing and then replacing Mr. Obama’s signature health-care system, nominating a justice to fill a vacancy on the Supreme Court, and strengthening the military, said Mr. Pence, whose wife, Karen Pence, sat nearby during the interview.
After that, though, the Trump administration wants to take aim at regulatory and tax policy in an effort to provide a big boost to the economy:
By springtime, the Trump administration would work with congressional leaders “to move fundamental tax reform” meant to “free up the pent-up energy in the American economy,” he said.
Pillars of the tax overhaul would include lowering marginal tax rates, reducing the corporate tax rate “from some of the highest in the industrialized world” to 15%, and repatriating corporate cash held overseas, he said.
The remark about eschewing the “free-market principles” of other Republican administrations seems a bit strange, considering the agenda Pence laid out. It’s safe to say that conservatives are certainly concerned that might be the case, especially after the deal Trump and Pence cut with Carrier this week, which seems overly dependent on flexing muscle in the defense-contractor relationship with its parent UTX. As Ben Shapiro and others noted on Twitter yesterday, conservatives want to see a broad policy enacted that boosts all businesses, not special deals with big corporations one at a time:
This is not difficult, people. Bribery and threats by the president are bad. Equally-applicable tax and regulatory reform are good.
— Ben Shapiro (@benshapiro) December 1, 2016
The New York Times quotes Pence as dismissing the free market in the context of the Carrier negotiations, too:
“I don’t want them moving out of the country without consequences,” Mr. Trump said, even if that means angering the free-market-oriented Republicans he beat in the primaries but will have to work with on Capitol Hill.
“The free market has been sorting it out and America’s been losing,” Mr. Pence added, as Mr. Trump interjected, “Every time, every time.”
That seems clearly aimed at trade deals, not domestic policy. That has been the debate in Middle America — whether free-trade deals are truly free markets, or whether the US has gotten taken to the cleaners by its partners that subsidize their corporate entities. That’s been a debate since at least the 1970s with Japanese automakers, and it’s continued right up to the present day with the EU and Airbus, and with other trade partners as well.
However, the agenda on domestic policy promises much more of an embrace of free market principles, at least in this interview. Conservatives have argued for years — decades, really — to reform the corporate tax system to flatten and simplify it. That would benefit the entire corporate sector, and smaller firms more than larger firms. Besides, while Republican administrations have certainly been better at this than Democrats, the commitment to free-market principles over cronyism hasn’t exactly been total in GOP White Houses, either. The housing market bubble was fueled by both the Clinton and Bush White Houses by using Fannie Mae and Freddie Mac to interfere in the mortgage market, efforts that were backed by both major parties in Congress. And when it came time to pay the piper, both parties went all-in on bailouts, even if Barack Obama had more enthusiasm for using it to force automakers and the finance sector to dance to his tune.
That situation certainly bears watching, perhaps especially when we get deeper into the Trump presidency. Trump likes to engage in splashy, newsworthy events, so we should be prepared for a few more Carrier-esque interventionist-government moments, and call them out for what they are. If he succeeds in partnering with Republican majorities in Congress in “cutting taxes on job creators and businesses, rolling back excessive regulations, repealing Obamacare and having the kind of trade deals that put Americans first,” as Pence promised, then perhaps there will be far fewer opportunities for cronyist grandstanding anyway. That agenda, if they stick to it, will embrace free-market principles far more than it eschews them.