Donald Trump at the first presidential debate, Hofstra University, Hempstead, New York, September 26, 2016

Thomas Dworzak/Magnum Photos

Donald Trump at the first presidential debate, Hofstra University, Hempstead, New York, September 26, 2016

Benjamin M. Friedman

This year’s election is not about economics. The paramount question is whether a person exhibiting no qualification for the office—neither experience, nor preparation, nor personal character—is nonetheless to become president. Yet economics is at the heart of the matter. The reason Americans face this possibility is grounded in our country’s economic experience of the last decade and a half. And the challenge facing whoever wins will be largely economic as well.

No one would think to compare Donald Trump with William Jennings Bryan. But the economic conditions that propelled radical populism to prominence in the 1880s and early 1890s, and that led the Democrats to nominate Bryan for president on a populist platform in 1896, bear an eerie resemblance to what Americans have lived through thus far in the twenty-first century.

Then as now, two seemingly inexorable forces were at work: a protracted slowing in the country’s economic expansion, together with dramatically widening gaps between rich and poor. Following more than a decade of rapid growth after the Civil War, centered on huge investment in steel and railroads, the average US citizen in 1880 earned a then-impressive $6,300 in today’s dollars. But the industrial expansion slowed, the development of new croplands in Canada and Argentina and Australia caused agricultural prices to drop (a catastrophe for an agrarian economy such as the United States then was), and a series of financial crises punctuated what little growth there was. By 1895, the year before Bryan’s electrifying “Cross of Gold” speech accepting the Democratic Party’s nomination, the average American’s income had slipped to just $6,100. Meanwhile, the ever greater contrast between Gilded Age riches and spreading rural and urban poverty was readily apparent.

Turning to the current situation, the pace of America’s economic growth has slowed sharply in the past sixteen years. From the end of World War II to 2000, output per person had risen—irregularly, to be sure—at an average rate of 2.2 percent per year. Since 2000 the increase has averaged only 0.9 percent. Along the way, the gains from what growth there has been have mostly accrued to those already at the top of the income scale. With slower growth and widening inequality, between 2000 and 2014 (the latest year for which we have the relevant data) the income of families just at the midpoint of the US income distribution fell, from $69,700 to $66,600 in today’s dollars.

The outright decline was largely a consequence of the 2008–2009 financial crisis, but median family income showed approximately zero increase from 2000 to 2007, and again from 2009 to 2014. Most Americans weren’t getting ahead, and they knew it. Just within the past year, there has finally been some visible progress. Median household income (similar to family income, but not the same) rose by more than 5 percent in 2015. But for many voters the increase is too little and too late. One year does not make a new trend.

If this unfortunate sequence of events helps explain how we got to where we are, what can a new president do to improve the situation? Would either Donald Trump or Hillary Clinton offer a route to faster growth? Or a way to reverse a half-century of widening inequality?

The more straightforward bet concerns Clinton. Her economic proposals include a large-scale program to rebuild America’s roads and airports and seaports, increased spending on education and job training, a significant increase in the minimum wage, higher taxes on top-level incomes, and an expanded earned income tax credit. If enacted, the infrastructure program would add to economic growth (and create some decently paying jobs) during the life of the program, and would make the US economy marginally more productive. Better education and more job training likewise add to productivity, albeit with long delays. But both proposals have large costs—well in excess of what increased tax rates on super-high incomes would generate.

At the same time, a higher minimum wage and enhanced education and training—presumably mostly for young Americans from lower-income families—would eventually help narrow inequality by moving many of those likely to end up at the bottom of the economic ladder closer to the middle. On an after-tax basis, so would bolstering the earned income tax credit and increasing taxes on the super-rich. On the scale proposed, however, the combined effect would be modest.

The larger question about Clinton’s proposals is whether any of them would become law. Even if her victory is large enough to give the Democrats a Senate majority, the House of Representatives will almost surely remain in Republican hands. There is little reason to expect the party’s dedicated obstructionism during the Obama years to give way to cooperation with a new Democratic president.

For its part, the Trump campaign has not offered a coherent economic program, and has similarly failed to provide specifics for the scattered ideas it has put forth. Even so, a few general themes stand out from Trump’s statements. He would reduce taxes on the rich and on business. He would repeal business regulation where possible, especially where the regulation protects either consumers or the environment rather than defending the vested interests of firms. He would oppose any increase in the federally mandated minimum wage although he too favors expanding the earned income tax credit. He would ask Congress to revoke existing trade agreements; in some cases he would be able to cancel them on his own authority. In one perhaps surprising element of commonality with Clinton’s ideas, he too would embark on a large infrastructure program.


In contrast to the likely fate of Clinton’s proposals, however, if Trump becomes president, what he proposes is likely to become law. As a result, his ideas, even in the inchoate form in which he has offered them, bear more intense scrutiny. The absence of substantive details notwithstanding, it seems clear that the aggregate effect of enacting his economic suggestions would be to increase by a large margin—well beyond what Clinton’s proposals involve—the federal budget deficit.

Nor is Trump’s answer to this drawback—the claim of faster economic growth—persuasive. He first argued that implementing his ideas would boost the medium- to long-run rate of expansion of total output (1.8 percent per annum, on average since 2000) to 8 percent. He then revised this prediction to 4 percent. Neither is credible. (It is some consolation, at least for now, that with interest rates low and corporate demand for investment anemic, the damage normally done by large-scale government borrowing in a fully employed economy would be blunted.)

Also not credible is Trump’s claim that the nation’s nonrich citizens, who would receive little tax break under his proposals apart from the expanded earned income credit and no direct help in other respects, would benefit from the trickle-down effect of allegedly greater investment and faster job creation. The ideas that George H.W. Bush once called “voodoo economics” are no more believable now than they were then.

Under either candidate’s presidency, therefore, growth is likely to continue to be disappointing, and inequality is likely to widen, for some years to come. The underlying forces responsible for these two insidious trends are too powerful to succumb to simple or small-scale patchwork. The stagnation of incomes and living standards endured by the majority of American families for the past decade and a half is therefore likely to persist, and with it the discontent that has become so evident in our political life.

The next president, therefore, will probably produce an unsatisfying economic record in the eyes of most citizens. With power in the hands of the wrong person, unchecked by congressional opposition, the temptation to seek distractions in energetic noneconomic initiatives—for example in an assertive foreign policy or a domestic campaign to vilify allegedly responsible scapegoats—is likely to be great.

American economic growth became faster again after 1895, and rapid expansion continued in the two decades leading up to World War I. New gold discoveries resulted in easier monetary policy (the nation was then on the gold standard), and a run of poor harvests in Europe boosted the demand for American farm products. Railroad construction resumed along with large-scale investment in the nation’s growing cities. The 1929 crash and the depression of the 1930s interrupted the resulting growth, but together they powerfully reversed the widening of inequality. Once World War II was over, rapid growth and narrowing inequality led to a quarter-century of sustained improvement for most citizens—more than a doubling of the median family income over just twenty-fve years.

It seems unlikely that either Trump or Clinton will create the equivalent of the gold discoveries of the 1890s or the early-twentieth-century wave of urbanization. Whoever wins will probably preside over a time of continuing economic dissatisfaction.

Diane Johnson

Does it matter what other countries think of our election? Certainly they are interested in it. A French friend e-mails, “I’m so sad when I see Donald Trump and the awful possibility that he would be President of the US, the more after Obama,” who is revered overseas. In Paris all spring, people kept asking whether Trump was a serious candidate, and at first Americans said of course not. Now what do we say? It’s interesting that my friend adds, “So sad when I heard of Hillary Clinton ill. Will she really have the strength to head on with such a country as yours?,” suggesting that Trump’s insinuations about her health are starting to be heard overseas too, confirming certain long-standing ideas they’ve had about our frailty.


Since the discovery of the New World, scholars and explorers from the Old World have viewed America with wonder and mistrust. Those who hadn’t seen it, like the influential French eighteenth-century naturalist the Comte de Buffon, believed the North American continent to be peopled with stunted beings both plant and animal—small, twisted trees and deformed natives with small genitals: “Le sauvage est foible & petit par les organes de la génération; il n’a ni poil, ni barbe, & nulle ardeur pour sa femelle.” Americans were also seen as weaker and less intelligent, more fearful and cowardly—altogether a deteriorated race.

Hillary Clinton at the first presidential debate, Hofstra University, Hempstead, New York, September 26, 2016

Thomas Dworzak/Magnum Photos

Hillary Clinton at the first presidential debate, Hofstra University, Hempstead, New York, September 26, 2016

The ideas of “stunted” and “savage” have lingered, perhaps unconsciously, in the European mind, evolving from the general idea of “undeveloped” into the certainty that Americans are childlike and simple, with corollary attributes of uncultivated vulgarity—a natural constituency for Trump. “Prejudices are what fools use for reason,” Voltaire said, and “those who can make you believe absurdities can make you commit atrocities.” During this campaign, we’ve seen that Americans easily believe absurdities.

At first, Europeans were entertained by the idea of Trump and seemed to ignore their own analogues, far less colorful and perhaps more dangerous: Marine Le Pen, Nigel Farage, and rising right-wing figures in Germany, Hungary, Poland, and elsewhere. At first, some of the most prescient pundits refused to believe these figures were serious either; their popularity was just the manifestation of some exuberance in the system, like steam in a radiator that had to be let out before things could function normally. Le Pen is expected to attain the finals in the forthcoming presidential election, and we have already seen Brexit. Now, closer to November 8, confusion reigns. Trump’s surrogates are almost worse than the candidate, who, seen as a mad person, gets a kind of pass and gets laughs.

Trump can be funny, like Adolf Hitler was said to be. In late September, Michiko Kakutani in The New York Times reviewed Volker Ullrich’s Hitler: Ascent, 1889–1939, an account of “a politician who rose to power through demagoguery, showmanship and nativist appeals to the masses.” Without needing to mention Trump, she brings him immediately to mind: “an egomaniac who ‘only loved himself’—a narcissist with a taste for self-dramatization and what Mr. Ullrich calls a ‘characteristic fondness for superlatives,’” “bottomless mendacity,” oratorical effectiveness, “promising to ‘lead Germany to a new era of national greatness,’ though he was typically vague about his actual plans.” On Brainyquote Trump is listed as saying, “You have to think anyway, so why not think big?”

The pity is that whatever happens on election night will leave a permanent scar, because we’ve learned some horrible things about our country and its divisions, about how so many people don’t mind, or don’t even know, that someone lies or has bad business ethics or is racist. It’s become clear that a good many people even admire these things, and thrill to the violence at the Trump rallies. We can understand that some of the Trump enthusiasm arises from longing for straight talk from politicians, but what shocks us is the underlying bitter hostility, and the possibility of terrible consequences of division that have been threatened should allegations of “rigging” emerge; our electoral system, under siege by recent Republican attempts to disenfranchise large numbers of voters, could lose legitimacy, which always depends on consensus.

Is it economics or identity politics that have drained our sense of community, so that people don’t mind, or even enjoy defying the conventions of civil discourse and peaceful governance? These seem, now, so fragile; now we are fragmented into Iowans or Californians, Muslims or Catholics, Lithuanians or Poles instead of a nation. The same communitarianism has risen in various European countries. In principle the French hoped to make every immigrant French; the little Algerian child was told Napoleon was his emperor, that he had a right to be proud that Pasteur invented vaccination. Now, just as we’ve done a bad job integrating, say, that community of Sikhs in Minnesota, whole communities resegregate in France too, resisting assimilation. We’ll see if Syrians will do the same in Germany; the Turks who came as guest workers complained at first about the obstacles they faced fitting into less than welcoming German society. (Still, in the Bundestag today there are eleven members of Turkish origin.)

How do we go about getting back a feeling of cohesion in America? Thomas Carlyle, certainly a conservative, subscribed to the “great man” theory of historical change, the role Trump is aspiring to play, but Trump seems to lack any sense of history and destiny. Carlyle’s great rival John Stuart Mill trusted the forces of democracy if they could be preserved from the enthusiasm of the mob—still our dilemma.

Maybe Trump can’t make our reputation sink any lower abroad and maybe it doesn’t matter; but seeing ourselves as others see us, as the poet put it, could be demoralizing for our own sense of being. Every day, Europeans read about people being murdered by our forces of order, people brandishing guns, people enthusiastically cheering for someone like Trump who sends “dog whistles,” the wonderfully evocative description of a way of transmitting ideas we dare not say aloud, including assassination and mob violence—as when he recommended taking away Hillary’s bodyguards’ guns, and “let’s see what happens to her,” an incitement to violence that probably ought to be prosecuted.

But by whom? One of the most frightening things about the Trump campaign is how it has exposed our lack of a mechanism for removing a candidate at this stage of the electoral process if he’s proved to be ill, criminal, deranged, or wicked. Could the Republican National Committee compel Trump to withdraw? Anyhow it hasn’t. No doubt it would like to, in light of his recent self-revelations, but there’s really no practical way it can, and so it must bear the consequences of its own divisive and obstinate positions.

Nicholas Lemann

If Donald Trump loses by a substantial margin, liberals will be tempted to rejoice, not just about the outcome of the election, but also about what may appear to be the self-destruction of the Republican Party.

Be careful with this emotion. After election day, the Republicans will still be in control of most of the statehouses, the House of Representatives, and quite possibly the Senate. In midterm elections, voter turnout is usually lower and that makes the voting electorate whiter, which bodes well for the Republicans in 2018. In 2020, it’s unlikely that Trump himself, in his mid-seventies and a pariah in his own party, could mount another successful campaign for the nomination, and whoever becomes the Republican presidential nominee will surely be a more conventionally experienced politician than Trump; he or she will run a more professional, if perhaps less exciting, campaign. With the sole exception of William Howard Taft in 1912, the Republican presidential nominee has finished first or second in every election since 1856, and that kind of inherited advantage can’t be entirely erased in one election.

What really happened this year was that it became evident how much distance has opened up in each party between the elite and the masses. Bernie Sanders was every bit as surprising and unlikely a serious candidate as Trump. Although he didn’t win the nomination, he struck a chord with a big part of the Democratic primary electorate, and he wound up helping to push Hillary Clinton to a position well to the left of where she was in 2008, or where Bill Clinton was in 1992 and 1996.

Trump’s views have almost no overlap with the ideology of those Republican politicians who think of themselves as the keepers of the party’s core ideas, like Paul Ryan. He hardly ever talks about the virtues of free markets, limited government, and civil society. And Sanders’s success shows how thin the support within the Democratic Party is for the Third Way neoliberalism of the 1990s, with its emphasis on free trade and deregulation.

It’s also worth noting that the kind of cultural conservatism that Bill Clinton deferred to in his policies on welfare, crime, marriage, and affirmative action seems to have disappeared entirely within the Democratic Party. In other respects, both parties simply haven’t adjusted to the economics and demographics of the twenty-first century. The Democrats at this moment seem to own cultural liberalism, but it’s not at all clear who owns economic liberalism, which is a rising political force in the age of inequality. Trump has boasted that his campaign will wind up remaking the Republicans into the “workers’ party.”

Barack Obama has been amazingly effective at maintaining relative peace within the disparate elements of the Democratic coalition. He was able to attack Mitt Romney as a job-destroying financier without much impairing his ability to raise money from rich donors. He kept all the major minority groups, who don’t always get along with each other, overwhelmingly on his side. He tilted noticeably away from the country’s biggest union, the National Education Association, on school-reform issues while keeping its members’ solid support.

Hillary Clinton, a less adept politician and more closely identified with Wall Street than Obama is, may find herself making choices that have the potential to pull apart the coalition that elected him—particularly choices on economic issues, and particularly if the Republicans have the wit to try to hang on to some of Trump’s economic populism. As a rough analogy, though on different issues, think of Jimmy Carter: he was elected in 1976 as the evangelical candidate, and then was defeated four years later by a wide margin because it proved to be nearly impossible to keep most of his party happy, on issues like abortion rights and the Equal Rights Amendment, without causing evangelicals to defect en masse.

An issue to watch is higher education. Entirely as a result of pressure from Sanders, Clinton has signed on to a variant of his primary season rallying cry, “Make college free.” One mechanism for achieving this will be requiring state governments to match a large federal tuition subsidy. If some states agree to this and others don’t, we will have a situation in which college is free in some states but not in others—and people in the states where it isn’t free might feel aggrieved in ways that a Republican politician could exploit (though it is more likely to be Republicans who refuse such subsidies), especially considering the limited opportunities available to people without college degrees.

Clinton’s proposal would apply only to public universities, which could put hundreds of private colleges, many with a religious affiliation and all with thousands of loyal alumni, under severe financial stress by having a no-cost competitor. That could create another substantial aggrieved class. And under Clinton’s plan, within a few years every family with an annual income up to $125,000 would be eligible for free tuition at public universities. That’s more than double the median household income. In education, student performance in high school and family economic status are highly correlated, so the limited slots in public universities could be filled mainly by students from families making six-figure incomes. That, too, could generate resentment.

Politicians have to worry about questions like these constantly, and the most skillful can make it look as if it’s no sweat to manage them. On the other hand, whenever one of the party’s fortunes have changed, it’s clearly because its leader made choices that alienated large elements of its coalition. The most vivid example in the last half-century was the Democrats’ losing the white South after they embraced civil rights. Trump’s defeat, if it comes, is genuinely an occasion for rejoicing, but his campaign has set loose emotions that had been for the most part kept tightly tethered in presidential politics: economic anger, and also racial resentment, hostility to the rule of law, indifference to facts, and insulting, violence-inciting rhetoric.

Trump has spent this year running for strongman rather than president—as someone whose solution to every problem would be the application of power, not reason or persuasion. And this has struck a chord with enough people to make him the most successful nonpolitician in presidential politics in decades. Restoring trust in the constitutional system will be a large task confronting Hillary Clinton, and if she fails, the forces Trump unleashed may be with us for a long time to come, possibly as a presence in both political parties.