Watching the Democrat convention in Philadelphia, that they’re all statists, clamoring for increased Federal answers/rules/guidelines/regulations/actions/fixes/solutions, is not surprising. What is surprising however, is that in reflecting upon many of the things said last week by Republicans, they basically want the same thing. Both parties are now openly embracing big activist government, with only distinctions of little consequence dividing them.
I used to use the words conservative and Republican (somewhat) interchangeably. And by conservative I meant “committed to the idea of individual liberty and responsibility, with an assumption that the government that governs least governs best.” I can certainly no longer do that.
Ronald Reagan’s comments about government used to be rallying cry:
Milton Friedman’s comments about free-market capitalism were inspiring and used to be considered fundamental:
That was then and this is the new now. Being conservative now means supporting one, or maybe both, of these two things:
- Government acting on MY behalf this time, instead of on the OTHER fella’s.
- Not Hillary Clinton!
There are two different ideas that the “I alone can solve” Republican nominee for President has repeatedly asserted that illustrate this transformation. The first has to do with international trade and the second is over the Federal minimum wage.
I’m not sure if Trump has given a speech where he has emphasized just how engaged and direct he is going to be in the business of America’s business. He has extremely specific ideas about what he will allow and disallow.
He said this at the RNC convention:
I am not going to let companies move to other countries, firing their employees along the way, without consequences.
In April Trump described how he would personally call the CEO of a company who had announced plans to move their manufacturing off shore. That call would include a direct threat and financial penalties for disobeying his economic plan. In other words, businesses would be free to grow, pursue opportunity, and hopefully prosper in any way they feel is best – as long as it meets with his approval.
In stark contrast, a libertarian free-market website published a letter to Trump, signed by a number of economists, which outlined a series of economic growth suggestions. One of them included this bit of genius:
All recent thousand-page international trade agreements should be replaced with a single, clearly worded paragraph that allows any U.S. business (or consumer) to trade with any other business (or consumer) anywhere else in the world on terms that are mutually satisfactory. Period.
If implemented, the possibilities for cronyism, favors, and lobbyist influence disappear. It’s a simple message and one the fully supports individual autonomy. In previous classical-liberal iterations of the Republican party, this would be fully endorsed. The administration would focus on creating an environment that would encourage this, but nothing more. That notion is now long gone.
The minimum wage has been another historical point of departure between the Republican and Democrat parties. The vast majority of the “Raise the Wage” or “Living Wages for Living People” efforts have been from Democrats. It’s an emotional assertion, based on hoped-for results, and utterly bereft of economic justification. The response from the right has typically been very simple: when you raise the price of something, less of it is purchased, including labor. Increasing the minimum wage therefore yields fewer jobs.
Given a horrific unemployment rate, which is even worse among minorities, youth, and the unskilled, one would think that it would be easy to make that case that forcing wages higher is a recipe for increased disaster.
But that is not what the Republican nominee is doing.
On Tuesday night Trump told Bill O’Reilly that he would like to increase the Federal minimum wage from $7.25 to $10:
“I would say $10. But with the understanding that somebody like me is going to bring back jobs. I don’t want people to be in the $10 dollar category very long. I believe it should be raised.”
If it were a Democrat saying this, in years past, the Republican response would correctly point out that the consequence would be a significant number of jobs lost that are currently paying between $7.25 and $9.99. But this is now the de-facto head of the GOP making this case, so except for from a few outliers, the Republican response has been to say nothing at all.
In typical Trump fashion, however, this is a reversal of sorts. In November of 2015, during the Republican candidates’ debate in Wisconsin, he objected to the idea of raising the wage to $15. His explanation, however, was not exactly informed by an Econ 101 class. He said that American wages are already too high and make it difficult for competing on the world stage.
Ironically, James Sherk at The Heritage Foundation just published a study demonstrating how an increase in the minimum wage would have an immediate negative affect: millions of jobs will be lost. It’s unlikely that Trump will take the time to read this, however as he is on the record about how little interest he has in reading as he reaches correct decisions “with very little knowledge other than the knowledge I [already] had, plus the words ‘common sense,’ because I have a lot of common sense and I have a lot of business ability.”
Democrats and those of the political left have always had a high confidence in government’s ability to positively influence results; and Republicans and those of the right have always countered with “government is not the answer.” Both parties now fully support some version of “government actually IS the answer, provided it’s the right guy at the helm” and I reject them both.
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