David R. Henderson  

Has President Trump Been Very Consequential?

But or Therefore?... Squalor and immigration...

Over at his other blog, TheMoneyIllusion, fellow EconLog blogger Scott Sumner writes:

I've often suggested that Presidents have far less power than people assume, and that events tend to follow the "zeitgeist", or the prevailing mood in the country. That's why Obamacare was not repealed, and it explains why Trump has not been very consequential, despite his obvious personal flaws.

I agree with Scott that Presidents have far less power than people assume.I don't agree, though, that he "has not been very consequential." The way to tell is to do one's best to imagine what a President Hillary Clinton would have done.

There are a number of areas in which we have seen and, I think, will see, a big difference between him and her.

1. Tax policy. I'm confident there's no way, if Clinton had been elected, that we would have seen such a good combination of tax cut and tax reform. Yes, she might have cut the corporate income tax rate to 28%, but it's hard to believe it would have gone lower. Also, given her support from high-tax states, she almost certainly wouldn't have limited the state and local tax deduction to $10,000. One libertarian friend on Facebook pointed out that the initiative for the tax bill came from a Republican Congress, not Donald Trump, and that's largely true. But so what? If Clinton had been elected, she would not have signed a tax bill close to what we got.

2. Immigration policy. Trump is moving in a dangerous direction, continuing the Obama policy of cracking down on illegal immigrants but stepping it up a notch and even limiting further legal immigration. That's consequential. And I fear that we haven't see the end of it.

3. Judges. There's no way we would have got Neil Gorsuch for Supreme Court or many of the other excellent picks for federal judgeships had Hillary won.

4. Regulation. Trump has been much more of a deregulator than I expected. I think this is already consequential.

There is one area where I think it's clear that Trump has not been very consequential--and I'm thankful: international trade. This is a possible explanation.

In the same post, Scott writes:

The one possible exception is foreign policy, where Presidents might be influential, in certain cases. But even there I don't really expect much change. Rather the problem is that Trump's recklessness makes a miscalculation with countries such as North Korea slightly more likely.

I agree. Both Hillary Clinton and Donald Trump are pretty reckless on foreign policy.

For a balanced assessment of Trump, see my recent piece.

Comments and Sharing

COMMENTS (17 to date)
Jon Murphy writes:

I think your item #3 is huge. If Hillary got the WH, we'd either have ongoing Republican stonewalling (if they kept the Senate) or potentially some real bad judicial pick (if the Dems picked up the Senate). Some of Trump's judicial picks have been duds (like Matthew Petersen), but Gorsuch and others have been fantastic.

Further, I think judicial appointments are one area where the President is very consequential, for better or for worse. After all, the President makes the appointments; the Senate votes but cannot appoint anyone.

David R Henderson writes:

Good point, Jon.
And notice that in the case of Petersen, the system worked and it was due to a Republican Senator, John Kennedy, who, I think, was not playing gotcha as much as trying to warn Petersen “Here’s what you need to know.” I’ve watched a LOT of Congressional testimony and this is some of the best minutes I’ve ever watched.

James Pass writes:

Yes, of course presidents are consequential. And yes, of course, they have less power than some people assume.

Now, since you and Jon regard Gorsuch as a great pick, what would you say about Merrick Garland, or for that matter Sotomayor and Kagan? Can either of you offer examples of issues better decided by judges like Gorsuch rather than Garland, Sotomayor and Kagan? I'm asking only because I'm trying to understand the larger point you're making.

Mike W writes:

But isn't Sumner's point that the particular person in the WH doesn't really matter? That is, "events tend to follow the "zeitgeist", or the prevailing mood in the country." The items you list could have been...and probably would have been...accomplished by any Republican sitting in the Oval Office with the GOP in control of the Congress.

Cameron Blank writes:

The eventual direction of many of these policy changes depend on the durability of these actions. SC appointments will last, but his deregulation and tax changes can be overturned easily.

If he isn't politically competent enough to hold congress or the White House he might end up pushing policy in the opposite direction, and it's likely he will end up being a force for more regulation and higher MTRs long term.

I'm sticking with my prediction that Trump will be one of the worst blows to libertarian economic policies in a lifetime, either by moving the Republican party away from free markets or by sinking the party completely.

David R Henderson writes:

@Mike W,
But isn't Sumner's point that the particular person in the WH doesn't really matter?
I think so.
That is, "events tend to follow the "zeitgeist", or the prevailing mood in the country."
I think so again.
The items you list could have been...and probably would have been...accomplished by any Republican sitting in the Oval Office with the GOP in control of the Congress.
Notice what you added: Republican. Actually, I don’t agree. I think most other Republicans would have been more pro-immigration and less deregulatory on other issues. But even if I did agree, that means it matters whether it was Trump or Clinton.

RL Styne writes:

David, you are literally the only person on this blog that could be trusted to provide a balanced treatment of Trump. Thanks for linking to your piece.

Noah Carl writes:

It is a myth that Obama deported a lot of people:


bill billson writes:

In the main, Mr Sumner is quite
correct, however, as for the
current White House resident, he
plainly is very myotic.

As Mr Henderson has so saliently pointed
out, The Trumpter has had an enormous
impact on the future direction of America.

There are presidents whom are caretakers and
those whom are historical leaders.

Floccina writes:
I agree. Both Hillary Clinton and Donald Trump are pretty reckless on foreign policy.

Hillary backed intervention in Iraq and even after seeing how bad that went she backed intervention in Libya and Syria. To me amazingly bad. She made it tough for Trump to be worse.

events tend to follow the "zeitgeist"

Doesn't the president at least reflect the zeitgesit? Otherwise, how did he get elected?

Jon Murphy writes:

@Roger D. McKinney

Doesn't the president at least reflect the zeitgesit? Otherwise, how did he get elected?

A common misconception. As Ken Arrow showed, the results of a two-outcome election cannot be reflective of a set of choices. For example, let's say I prefer hamburgers to pizza to tacos, you prefer tacos to pizza to hamburgers, and Prof. Henderson prefers pizza to tacos to hamburgers. If there is a vote for food between burgers and pizza, pizza will win. However, if there is a vote between burgers and tacos, then tacos will win. So, the outcome of the election depends heavily on what is being decided upon and among. The results of said election cannot be said to be any sort of representation of a prevailing mood.

Furthermore, this assumes there can be something as a "collective preference" or "will of the people." However, since individual preferences are not additive and unique, we cannot in any meaningful sense discuss some "will of the people."

So, in short, the President does not necessarily (or even realistically) reflect any sort of prevailing mood.

Scott Sumner writes:

I think Hillary would have signed just as good a tax bill. Although the corporate rate would have only fallen to 28% or so, in other respects the bill would have been better (less of an increase in the budget deficit, for instance.)

I doubt we'll see much deregulation under Trump. Some deregulation in some areas, more regulation in others, not much net change--especially in areas where regulation is very consequential.

I think government spending will be somewhat higher under Trump than under a President Clinton.

If you look back on the past 50 years, it's hard to see when we had a Democratic president and when we had a Republican one, just by looking at measures of government spending as a share of GDP, or total amount of regulations, etc.

Just to be clear, I'm not saying that Presidents don't matter at all, just that they don't have much influence on the path of public policy over time. They matter in other ways.

I don't know what our health care system will look like in 2030, but I'm pretty confident that whatever it looks like won't be much different from how it would have looked if Hillary had won.

Steve F writes:

In my estimation, Trump has a stronger real-world skin-in-the-game understanding of rational expectations than most economists do. I remember telling one of my professors from the very beginning of the Trump administration that stocks will continue to go up in a way people don't expect because of how well Trump showed up to that point that he knows rational expectations. While most of the stock price change may probably be best attributed to the Fed and a generic GOP control, the height and consistency of the increase may be well contributed to Trump's expertise on expectations management.


Yeah I get that, but you're talking about specific issues and zeitgeist isn't. As you'll remember, there was almost no talk of tax reform in the campaign, but it does fit in with the populist zeitgeist. After all, the Zeitgeist is the dominant set of ideals and beliefs that motivate the actions of the members of a society in a particular period in time. It doesn't refer to specific policies.

David R Henderson writes:

@Jon Murphy,
Good point.
@Roger D McKinney,
Doesn't the president at least reflect the zeitgesit? Otherwise, how did he get elected?
I don’t know. Tell me what the zeitgeist is.
To say that the president reflects it, you would also have to say that Hillary Clinton would have done the same things that Trump has done. Hard to believe. Remember that she lost by only a little over 100,00 votes spread over 3 states.

Trevor H writes:

David -

I agree with Scott's comment above about the tax bill, there's a decent chance there would have been no major tax bill. But if was one passed that Hillary would have signed, it almost certainly wouldn't have grown the deficit. There are structural improvements in the bill, but they aren't worth the extra debt.

Clinton would have been way better on immigration, though I expect DACA and the El Salvador temporary visas would just remain in the same Obama limbo rather than being actually fixed.

I suspect Puerto Rico would be in a lot better shape right now under Clinton.

I don't know what to think on North Korea. It makes me deeply uncomfortable that Trump seems to so blithely threaten military and nuclear action. Maybe it turns out for the better. He's certainly adopting a riskier strategy than Hillary would have, it remains to be seen if the payoffs are worth it.

Similar with NAFTA. Hopefully the Trump saber rattling just extracts some minor symbolic concessions and the agreement continues on to everyone's mutual benefit. I think Trump really is too stupid to understand that trade deficits are not a prima facie harm to the country.

I wonder if Hillary would have withdrawn from TPP? That seems like a pretty big unforced error.

As for regulation, is there a good ungated summary of his impact? I don't have a WSJ subscription to see the link from your other piece. But if we're comparing to a hypothetical President Hillary, yeah I'm sure he's been better.

On balance, I'll say America is worse off with Trump than we were under Obama. Are we worse off than we would have been under Clinton? I think so, but she also would likely have done more harm than good. As did Obama and Bush by the way.

One of the great things about America is that we are on track for 20 consecutive years of mediocre to really bad Presidential leadership and it's still a pretty awesome country. We are much more than our government.

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