FREE WHITEWATER

Trump Tax Bill is the Predictable Failure Sensible People Warned It Would Be

In Whitewater, there’s a business lobby that amounts to a right-wing landlord or two, the dogsbodies who follow three paces behind, and the municipal officials who have been, variously, beguiled or browbeaten into asserting that government-directed capital spending means general prosperity.  It doesn’t; it’s the great myth of municipal policy.  A building here, a building there, yet family poverty has grown worse in Whitewater since the end of the Great Recession.

These men don’t believe in free markets (of capital, labor, and goods) in constant, voluntary private transactions to achieve advantageous results for individuals and collectively for society.

Instead, they believe in – crave, truly – the manipulation of public policy for their own ends, imagining themselves especially clever and convinced they’re especially worthy.

On a national scale, Trump’s tax bill represents the misdirection of tax policy to benefit a few just as local policy claims ‘community development’ that has done little for the community’s individual or household incomes (as the city still has high levels of poverty).

About that Trump tax bill: it’s a failure even on its own terms.  John Cassidy writes A Decline in Capital Investment Reveals the False Promise of Trump’s Tax Bill

It didn’t take long for the White House to claim that the tax bill had worked. This time last year, Trump pointed out that private-business investment was rising at an annual rate of more than nine per cent. “So that’s a very tremendous increase,” he said. “There hasn’t been an increase like that in many, many years—decades. And I think the most important thing, and Larry Kudlow”—the director of the National Economic Council—“just confirmed to me, along with Kevin Hassett, that these numbers are very, very sustainable. This isn’t a one-time shot.”

As usual, Trump was exaggerating. The upturn in business investment during the first half of last year was by no means unprecedented, but it did represent an increase on the previous few years. However, it was fleeting. In the second half of last year, the growth in business investment fell sharply, and the slowdown has continued into 2019. During the second quarter of this year, according to last week’s G.D.P. report from the Commerce Department, it turned negative. If you exclude investment in residential real estate, which also fell, business-fixed investment declined at an annual rate of 0.6 per cent in three months, from April to June.

Update, 9.10.19: The policy of the last state administration was a series of interventions to redistribute resources to favored businesses.  Over that time, local special interests merely chanted the state administration’s tune.  Community Development Authorities across the state became miniature WEDCs. That approach has been, to put it mildly, a bad one.  See Three Fundamental Failures: Employment, Income, and Poverty.

These men went too far, and did too much, leaving a mess that sugary falsehoods cannot conceal…

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