Listen to President Trump describe how he will make America great again. He will deport illegal migrants; cut corporate taxes; build a wall and make Mexico pay. He will punish companies that move jobs abroad; stand up to China’s trade juggernaut; deregulate the economy; and end environmental protection. This is a world mainly of shortcuts: raising national income not by innovation, skill, and saving, but by grabbing income from somewhere else, such as Mexico, China, the environment, or future generations. Trump is the quintessential short-run populist. History teaches why such populism is doomed to fail.
The ostensible motivation for Trump is faster economic growth and more jobs for working-class Americans. Properly viewed, these are long-term challenges requiring a long-term national strategy. The nation’s output depends on the productive assets in the economy, defined broadly to include the skills, intellectual know-how, roads, ports, factories, air, water, and even trust in the society that underpin commerce and finance. Economists call these assets the “capital” of the economy, including human capital (education, job skills, health); infrastructure capital (roads, power, fiber, rail); natural capital (air, water, soils, biodiversity, climate); intellectual capital (know-how); and social capital (trust). Long-term improvements in the economy depend on building the capital stock in these areas in a balanced and thoughtful way.
Read the full article at The Boston Globe.
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