Trump to break the economy?

by Tom Hartmann Donald Trump is preparing to crash the American economy. He intends to do it by tearing up vital parts of our American government. He may even hire Elon Musk to pull it off. And from his point of view, this is not going to be a bad thing. The farther the economy crashes, the greater the buying opportunity for billionaires. It all has to do with something called the administrative state. While it’s not sexy or even particularly interesting to the average American voter, having a strong administrative state is essential to a high-functioning economy. A strong administrative state is the only thing that protects entrepreneurs and small businesses from being squashed like bugs by monopolistic behemoths, and small businesses are our nation’s main growth engine. For example, over 70 percent of all new jobs created since 2019 were created by small businesses, producing almost 13 million new jobs over the past 25 years. Small business creation is up 50 percent over Trump’s years because the Biden administration has been enforcing the rule of law, including taking on the giant tech monopolies. Small businesses now account for over 43 percent of all American economic activity. A strong administrative state is also the only thing that can protect the environment from those who’d destroy it for their own profits. It’s the only thing that can protect consumers from defective or even deadly products and food or drug contamination. It our only defense against predatory banks, airlines, and insurance companies, among others. A strong administrative state that follows and enforces the rule of law — as opposed to the kind of grift-driven kleptocracies typical of strongman governments — is essential, in other words, to a functioning national economy. Here in America, we see this best in the contrast between lightly bureaucratic and largely unregulated Red states and more bureaucratic and regulated (and taxed) Blue states and counties. While Red and Blue states are represented in Congress about 50/50, as the Brookings Institution found a few years ago: “Biden’s winning base in 509 counties encompasses fully 71% of America’s economic activity, while Trump’s losing base of 2,547 counties represents just 29% of the economy.” But now the administrative state is in the crosshairs of the incoming Trump administration, and their planned assault on it will almost certainly cause a loss of economic vitality, probably even leading to a major recession (every Republican president since Nixon has had a major recession after tinkering with tax and regulatory policies; none of the Democratic presidents have created one since Carter, and his started under Nixon). We also see this at the level of the nation-state. As Professor Timothy Snyder notes: “Now consider the Russian and Hungarian economies. Russia sits on hugely valuable natural resources, and yet is a poor country. The profits from its oil and gas are in the hands of a few oligarchs. “Hungary sits in the middle of the European Union, the most successful trade project of all time. And yet Hungarians are poorer than their neighbors, in part because the Orbán regime corruptly channels EU resources to friendly oligarchs. “The lesson is clear. Democracy is a method of checking corrupt rulers. When there is no functioning democracy, corruption is unchecked. And democracy is an element of a more fundamental guarantor of prosperity, the rule of law. In Hungary and Russia, the rule of law has been bent and broken, to the benefit of the few, and to the detriment of the many. Ending the rule of law is the Trump-Vance platform.” Gutting the administrative state is the first and imperative aspect of ending or weakening the rule of law. Because, as Steve Bannon famously told America, the main goal of the Trump administration is “the ‘deconstruction’ of the administrative state.” He added: “Every business leader we’ve had in is saying not just taxes, but it is also the regulation. I think the consistent …[thing] is the deconstruction. The way the progressive left runs is, if they can’t get it passed, they’re just going to put in some sort of regulation in an agency. That’s all going to be deconstructed and I think that that’s why this regulatory thing is so important.” We saw this movie before, during the last Trump administration. He put a coal lobbyist in charge of EPA, an oil lobbyist at Interior, a Telcom lobbyist and lawyer at FCC, a professional union-busting lawyer in charge of the Labor Department, an advocate for replacing public schools with religious ones in charge of the Education Department, etc., etc. But that was more mere corruption than a wholesale destruction of administrative agencies. Since the Chevron deference decision by the Supreme Court this past year, though, it’s now possible that Trump could actually destroy the American administrative state. Even when Chevron was still intact eight years ago, the result of Trump’s corruption in his previous administration, just like with Reagan’s and Bush’s deregulatory campaigns, was a massive recession that started before Covid came along. Trump will fire Lena Kahn at the Federal Trade Commission, blowing up the antitrust efforts of the Biden administration; the fat cat billionaires already are eagerly anticipating running amok (which is why they threw billions at Trump’s campaign). The result, predictably, will be another Republican economic disaster for America’s working class. Interestingly, our country’s most famous investor also seems to be thinking along these same lines. Warren Buffett has recently sold over $325 billion in stock and is simply sitting on that huge pile of cash. Why? Probably the Oracle of Omaha can see the same thing I’m pointing out here: Trump is preparing to turn the economy over to Musk and his billionaire buddies and the result will be a disaster. A disaster, by the way, that will be very useful to Buffett and other billionaires; recessions and depressions are when America’s largest fortunes are typically made or expanded because they represent great buying opportunities to those with cash, while at the same time the small companies being squeezed are willing to sell for a song. So get ready; we’re in for a bumpy few years as America descends into a strongman-run oligarchy while the Supreme Court and Trump’s toadies rip apart the protections of the administrative state we’ve so carefully constructed in the years since the Civil War and the Republican Great Depression. It may well be a disaster for your 401(k), and millions will lose their jobs in a recession. If Musk cuts $2 trillion from the federal budget, as promised, it will almost certainly impact Social Security and take a huge bite out of programs for veterans, children, and the disabled. It would probably also have to end all subsidies under the Affordable Care Act, and end hundreds of billions in federal aid to infrastructure construction programs. Get ready now, to the extent that you can. Forewarned is forearmed.