President Trump gave a remarkable speech to Congress last night. After his claims of American Carnage at his inauguration a little more than a month ago, he toned down his rhetoric and struck a more positive, forward-looking, hopeful and, ultimately, American tone. Commentators called it the “least contentious” and “most presidential” speech in his political career. That rings true in regards to the condemnation of the steep rise of anti-Semitic incidents across the nation and the deadly attack on an immigrant in Kansas, the commitment to NATO, and, more generally, the pledge to global American leadership, all of which shouldn’t be particularly noteworthy things to say for the President of the United States.
But despite being his most presidential self, President Trump remained Trump. The language was more inclusive, less pompous and preposterous, but the speech was Trumpian at its core: in its loose use of facts, misleading statements and divisive policy proposals; and in its general vagueness, promising close to everything to everybody without offering much detail.
On healthcare, taxes, and infrastructure, President Trump’s policy positions weren’t more evolved than before the inauguration. While many Republicans applauded nonetheless, the speech unsurprisingly didn’t seem to win over critics. It also won’t make magic policy solutions appear out of the blue sky, or the dysfunction of the Administration go away; nor will it stop the ongoing investigation into Mr. Trump’s Russian affair.
President Trump’s objective, however, was clearly a restart of his presidency, particularly with the American public. To achieve this, the general theme of the speech was well chosen: Its core promise was progress.
Early on in his address, Mr. Trump defined the focal point of his policies:
“In nine years, the United States will celebrate the 250th anniversary of our founding, 250 years since the day we declared our independence. It will be one of the great milestones in the history of the world.”
Conveniently beyond Mr. Trump’s tenure, even if he wins reelection in 2020, Mr. Trump built many of his policy ideas around the question of how the United States would be 250 years after her founding. In nine years, Mr. Trump promised, the country will be in much better shape. The core of his appeal is: If you follow me now, our 250th anniversary will be great.
He delivered the key sentences close to the end of the speech:
“On our 100th anniversary in 1876, citizens from across our nation came to Philadelphia to celebrate America’s centennial. At that celebration, the country’s builders and artists and inventors showed off their wonderful creations. Alexander Graham Bell displayed his telephone for the first time. Remington unveiled the first typewriter. An early attempt was made at electric light. Thomas Edison showed an automatic telegraph and an electric pen. Imagine the wonders our country could know in America’s 250th year.”
The paragraph is truly remarkable, because it helps us understand what Mr. Trump really means when he promises to Make America Great Again. It is remarkable, because it underpins this promise, but also shows Mr. Trump’s dangerously simplistic theory of progress, and a fundamental misunderstanding of the challenges that the American state is facing. It is remarkable in its naiveté and ignorance.
In The Rise and Fall of American Growth, Robert J. Gordon, a macroeconomist at Northwestern University, meticulously analyzes the economic development of the United States since the Civil War. His focus is on the American standard of living, which arguably is also Mr. Trump’s main concern. Mr. Gordon’s study, grounded in rich statistical facts and comprehensive analysis of the drivers and barriers of growth, argues convincingly that the U.S. experienced a “special century” between 1870 and 1970, in which the country profited from exceptional growth that fundamentally transformed the lives of all Americans and grew the middle class.
The inventions that Mr. Trump mentioned in his speech, the telephone and electric light, are part of this transformation. But he omitted others, most notably in hygiene (germ theory), transport (internal combustion engine), and medicine (penicillin), perhaps because these where invented or discovered outside of the U.S. (in France, Germany, and the UK, respectively). Combined, these innovations transformed the American standard of living.
Mr. Trump naiveté is that he claims he could simply revive the growth drivers of the special century and thus make America “great again”:
“Think of the marvels we could achieve if we simply set free the dreams of our people. Cures to the illnesses that have always plagued us are not too much to hope. American footprints on distant worlds are not too big a dream. Millions lifted from welfare to work is not too much to expect.”
Mr. Gordon’s point is, however, that the interventions of the special century were unique, and cannot be replicated. The efficiency gains that the Internet, or more broadly the Third Industrial Revolution brought, for instance, were not as impactful as the innovations of the transformative Second Industrial Revolution. In fact, future innovations are projected to create more challenges by concentrating efficient means of production in the hands of ever fewer capital owners while making much of the labor force redundant.
Moreover, many of the important innovations of the special century, Mr. Gordon points out, would not have been possible, or transformative, without an important role of the state. Eisenhower’s interstate construction program, also cited by Mr. Trump, comes to mind; or transformative policy innovations, such as Social Security and the Food and Drug Administration.
To put it in plain language: There is no easy solution to unleash American growth.
But naiveté becomes ignorance when we consider Mr. Trump’s policy proposals in the context of these lofty ambitions. While details are frustratingly vague, some preferences have become clear over the last few days. Early executive action indicates that Mr. Trump’s sees regulation as the key barrier to growth. His budget proposal heavily relies on kick starting growth, even if most, if not all, economists doubt Mr. Trump will achieve the growth rates he promises. It becomes dangerous because he shows an eagerness to gut civilian parts of the state in favor of more military spending, should growth not materialize.
Mr. Trump’s speech yesterday did little to mitigate these concerns.
Mr. Trump’s rhetoric of Greatness relies on revitalizing the economic growth and transformation of the standard of living that America witnessed in the special century, but he demonstrates little understanding of the drivers of this growth, or the political economy that allowed important innovations to flourish. He disregards the importance of governance in the process that brought transformative growth, and dismisses the challenges that the American state is facing. (He would do good reading Francis Fukuyama’s Political Order And Political Decay to better appreciate this.) In fact, most, if not all, of the policy proposals that Mr. Trump made will further the crisis that he claims he inherited.
Measurement and evaluation