It used to be possible to say something of the effect, “be wary of Republicans when they don’t do what they say they believe in, be wary of Democrats when they do do what they believe in.” Democrats may have had good intentions, but their policy prescriptions were generally in the wrong direction (certainly economically). Republicans, however, were solidly behind sound economics in their official statements, and when they abandoned their principles was precisely when they got into trouble (which unfortunately was frequently).

But now we’re in the age of Trump, and much to my dismay, Trumpism has completely conquered the Republican party as surely as the blitzkrieg rolled around the Maginot line. Mr. Trump is what he always has been and apparently always will be: a self-focused promotor of his agenda. The classical liberal/libertarian economic policies of the Reagan years are gone, and even the establishment “tax collector for the welfare state” Republicans are gone. Bad is now good, and good is now bad. We, along with most serious economic observers, have condemned Mr. Trump’s trade foolishness. Somehow our ability to buy goods and services from others cheaply is a great defeat, but if we can somehow buy from them very expensively, we win. Is that clear? The fact that 2 billion people have been lifted from extreme poverty since 1990 doesn’t seem to matter–you see those weren’t Americans.

But real median income has risen quite a bit over this period of globalization, and given the low skilled immigration we’ve had during this period undoubtedly understates the gains that U.S. citizens have achieved from globalization. Rural America has suffered, but its not clear at all that it is due to globalization, rather larger trends of population migration to preferred city living seems to be a driving factor.

So why do I say that no one is behind sound economics? Free trade, limited government/balanced budgets and sound monetary policy were always the hallmarks of Republicans. Its of course true that they weren’t faithful to these principles, especially balanced budgets, but that was always at least the direction and stated goal. But Mr. Trump ran on repudiating free trade, and was very clear that dealing with the entitlement state was not on his agenda. But he talked a good game on Monetary policy, even arguing in favor of a Gold Standard. He ridiculed Janet Yellen during the campaign, but then embraced her loose monetary policies. And now he has abandoned any pretense of being in favor of sound money:

Negative interest rates are good for the world’s biggest debtor (the U.S. Treasury), but terrible for everyone else. Europe is in the process of killing its banking system due to negative interest rates (the banks basically can’t make a spread) and now Mr. Trump wants them here. It’s precisely the low interest rates of the last decade which fueled the growth of government–when governments can basically borrow for free don’t be surprised when they do so. And if Mr. Trump gets his wish, then he has just provided the mechanism to pay for the green new deal and anything else that progressives want. Now with respect to refinancing our debt, there is absolutely nothing that precludes the US Treasury from doing that now. Going from short term to long term would be wise for the government, but pity the poor lender to Uncle Sam.

Trumpism is the defeat of Reaganomics, and is on full display for anyone willing to look.