Little right, much wrong with Trumponomics

For years I've wondered how America's business elite could grab almost all the proceeds of the country's growth, leaving real wages permanently stagnant, without having ordinary workers rioting in the streets.

Now I know. The anger kept building until a political huckster called Trump found the way to exploit it for personal advancement.

The bitter joke is that the populist promises he made to keep out Muslims, Mexicans and Chinese imports would do little to make the mug punters better off, whereas many of his more conventional economic policies will do much to further fatten the pockets of the 1 per cent the punters so resent.

While we wait to see which promises he acts on, the best guess is he'll implement those of his policies that fit with Republican orthodoxy.

After all, he'll be relying on the usual Republican suspects to make up his cabinet and relying on Republican majorities in Congress to put his policies into law.

This suggests he'll be quick to start phasing corporation tax down from 35 per cent to 15 per cent, and lowering all rates of personal income tax (though not necessarily in a way that favours low and middle earners).

He's likely to increase defence spending and maybe even keep his promise to fund a much-needed urban infrastructure renewal program.

But surely this would cause a huge expansion of the still-excessive federal budget deficit, wouldn't it?

Yes, but that's unlikely to stop it happening. It is, after all, similar to what Ronald Reagan did on coming to office in 1981.

We're about to see confirmation of an eternal truth of American politics: the Republicans care hugely about the evils of debt and deficit – it keeps them awake worrying about what we're leaving for our children and grandchildren – but only when there's a Democrat in the White House.

For the most part it will be a giant exercise in trickle-down economics – even though many of the people who fell for Trump's crude charms now rightly see it for the voodoo economics it mainly is.

Protectionism may be the new saviour – in Nick Xenophon's Oz as well as Trump's Rust Belt states – but it's still the delusion it always was. It seems "only common sense", but that doesn't mean it works.

In any case, were Trump to impose a huge tariff on Chinese imports, do you imagine that would re-open the ghostly steel mills in Gary, Indiana, or the rusting automobile plants down the road from Michael Moore's place in Flint, Michigan?

Turning back globalisation is no easier than turning back time. The main thing you'd do is rob working people (and the rest of us) of access to the one aspect of globalisation they've clearly benefited from: imported goods much cheaper than the locally made goods they replaced.

Don't kid yourself: some lost their jobs in factories, but all workers – most of whom never worked in manufacturing – benefited from lower prices.

That's why there's no free lunch in protection: it's a scheme where the fortunate few are subsidised by the less-favoured multitude. It's not foreigners who lose out, it's other locals.

And don't kid yourself on this: far from all the jobs lost from manufacturing were lost through import competition.

Far more than many oldies realise were lost through computerisation. That's a big part of the reason reimposing high tariffs would do surprisingly little to restore manufacturing employment.

It's a convenient delusion that globalisation is solely the product of "neo-liberal" deregulation. Its other, bigger driver is technological advance and the digital revolution. Think any pollie can stop that?

This isn't to say scuttling the Trans-Pacific Partnership free-trade agreement would be any loss. It offered trivial benefits to us, in return for giving foreign multinationals power to push our government around.

Just because preferential trade deals are called "free-trade agreements" doesn't make them a good thing. The US's primary goal in its many agreements is to advance the interests of its exporters of intellectual property, while continuing to protect its farmers.

Its trans-Pacific deal was intended as cover for the bilateral deal with Japan hidden within it, as well as strengthening America's trading links with all the main Asian economies that weren't China.

The Yanks may be paranoid about the rise of China, but the joke is there never were two big economies – the two biggest – more interdependent. The US is China's largest trading partner, while China is the US's second-biggest – and its biggest creditor.

The Yanks are really stoopid​ enough to take a crack at Chinese imports? Trump is a cunning con man, not an idiot.

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Why Trump won't be as big and bad as many fear

Sorry, but I find the ascent of Donald Trump more fascinating than frightening. If it's all going to be so terrible, how exactly is he going to make it happen?

If you take literally all the things he's said he'll do, it will be a disaster. But anyone who believes all the things politicians say in the heat of election campaigns isn't too bright.

It wouldn't surprise me if many of the people whose votes got him elected don't know half of what he promised, don't much care what he promised and certainly don't expect him to deliver.

They voted for him because, in their anger with the business and political establishment, they wanted to give the system a kick up the bum. The less he sounded like a proper politician, the more they thought him the man for that job.

Because Trump isn't part of the standard two-party system and didn't win the election the orthodox way, it's more relevant than usual to ask what motivated him to run for president.

It wouldn't surprise me if he was more interested in proving he knew the right buttons to press to be president, or was popular enough to be president - that he could ensure he was the last contestant voted off the island - than he was in actually doing a list of things to "make America great again".

How keen will he be to take on four years of 18-hour days making unending judgment calls?

When you think of all the struggle needed to "drain the swamp", he strikes me as more Phony Tough than Crazy Brave.

Much of the commentary we've seen so far is very "great man theory of history". Trump is such a wild man, he'll single-handedly destroy the American alliance, end America's world supremacy, start a global trade war that reverses globalisation and resumes the Great Depression, and maybe provoke a shooting war with China.

Was that in his first term, or would it take two?

Sorry, I lean more to the view that history is a product of pre-existing trajectory, random developments and the interaction of powerful political and social institutions.

They say that in the race of life, you should always back Self-interest because at least you know it's trying. I'd also put a couple of bob on Inertia.

In the coming history of the Trump administration, I see big roles for self-interest and inertia, aka the status quo.

Start with the Republicans. The hated usurper Trump, rather than dumping them in it, has had a famous victory in their name, ensured Republican majorities in both houses of Congress, and acquired control over countless perks and preferments.

If you were in the Republican caravan, what would you be doing? Sucking up.

There's an army of worthies - academics, think-tankers, bureaucrats, retired generals, former lobbyists, business people and Wall Street bankers - who spend their careers moving in and out of taxpayer-funded jobs in Republican administrations.

Trump will be knocked over in the rush to be his special friend. The thousands seeking a gig will have two dominant motivations: a share of the spoils of office and a say in the shaping of policy.

There's probably only one Republican in the country who agrees with every item on Trump's supposed to-do list, and that's the man himself.

If so, every other Republican will be hoping to persuade Trump to drop this, tone down that, add this and put that one on the backburner.

Do you really think he's going to spend his 18-hour days ensuring every bright sales idea written on the back of an envelope during the campaign remains inviolate?

What about all the real, professional econocrats, diplomats and generals? "Alienate our closest allies? Start a trade war? Good idea, Mr President."

Remember, too, that presidents often have trouble getting their policies passed by Congress, even when it's of the same political colour.

There's far less party discipline in the American political system, with individual congress people requiring a small bribe (hopefully, only something for their constituency) before they toe the party line.

They're also anxious to keep sweet with the main interest groups that contributed to their campaign costs.

Which brings us to Washington's other big industry, the lobbyists. They're going to meekly bow before Trump's sacred list of bright ideas, are they?

No, they're going to go on doing what they're so handsomely paid to do: mould the actions of president and Congress to fit the perceived interests of their generous customers.

Who are these big-spending interest groups? Well, the ones with the most money to splash around are the ones representing the most successful and powerful industries. The gun industry, for instance.

But, right at the head of the list, Wall Street - the people whose greed caused the global financial crisis, who got bailed out by the taxpayer, avoided going to jail and left millions of ordinary people to pick up the pieces of their lives.

Many of those ordinary people are those who voted for the larrikin Trump, hoping he'd give Wall Street an almighty kick up the bracket - he being a regular plain-talkin' guy, just like them.

Get it? The business and political establishment is still running the place, still ensuring their interests are put ahead of those of the lesser mortals silly enough to vote for Trump.

Now Trump has no choice but to turn to them, seeking their help in running the joint and implementing his brave plan to put them and their paymasters back in their box.

They'll be falling over themselves to help - and mould the egotistical Trump to their masters' will.

It's a recipe for inertia and preservation of America's system much the way it's always been.

Trump's amazing defeat of the political establishment isn't so much the revolt of the put-upon punters, as just another political con job.

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