Using the past to find the future in economic policies: Clinton's 90's vs. Trump's 80's

On Aug. 8 Donald Trump, the Republican candidate for President, gave a speech to the Detroit Economic Club to discuss his general platform for what he would do in economic terms should he win in November.  And over the course of 60 minutes, the New York businessman and political outsider stressed how electing him to the White House would be a step towards the future, while electing Hillary Clinton would be a return to the past.

But interestingly enough, and perhaps ironically if you look at it, both candidates are reaching back to the past, and towards policies and ideologues whom they felt most connected with their views on what the economy needs to do to Make America Great Again.

Donald Trump: Channeling supply side economics, low taxation, and self-sustainability... a return to the 80's and Reagan economics.

In his speech, Trump focused on four key issues, and multiple sub-issues that he wants to implement quickly should he win the White House in November.  These key issues are:





Energy: In regards to energy, Donald Trump wants to expand domestic energy production to fulfill all of the country's needs.  And this includes re-vamping the coal industry, which President Obama has nearly obliterated in his destructive Global Warming/Climate Change agenda that has only made energy costs escalate higher.

And as I correlated earlier, Trump's ideas are almost lock-step in line with that of a former Republican Commander-in-Chief.  And here is what Reagan thought of self-sustained energy programs for the country.

This is a great country, but it’s not being run like a great country. Look at these heating bills. Many families pay hundreds of dollars a month. Others go without heat. We must eliminate restrictive controls and use more of our domestic oil and natural gas. And we must use all our technology to become self-sufficient in energy so no one can blackmail us. This is a great country. It’s time to start running it like a great country.

— Ronald Reagan Presidential campaign ad, 1980

Taxes: Trump in his speech today adjusted his tax bracket goals from when he ran for the candidacy during the primaries.  Back then, his tax plan included breaking down the brackets from seven to three, and at rates of 10, 15, and 20%.  But now his tax proposals aim for a rate breakdown of 12, 25, and 33%.

Reagan's tax initiatives:

After negotiations with the Republican-controlled Senate and the Democratic-controlled House, in August 1981, President Reagan signed the largest marginal tax cuts in American history into effect at his California ranch. This lowered income taxes significantly, with the top personal tax bracket dropping from 70% to 28% during the course of seven years.

— Mitchell, Daniel J. (July 19, 1996). "The Historical Lessons of Lower Tax Rates

Regulations: Under Barack Obama, regulations have skyrocketed to where it is estimated that 2,948 new regulations are enacted every year.  In fact, in relation to the Affordable Health Care Act (Obamacare) alone, what started out as a 2,700 page law has morphed into a monstrosity that is now 30 times larger than the original bill.  Donald Trump seeks to eliminate large portions of these regulations in Obamacare, and with umpteen other regulations tied to current and ongoing laws, and attempt to streamline government agencies into focusing on their mandates, rather than agency empire building.

Reagan's regulation policies:

This brings me to the centerpiece of the Reagan administration’s regulatory reform program, Executive Order 12291, which the President signed shortly after taking office. The order builds on earlier efforts of Presidents Carter and Ford but goes beyond them in two fundamental respects. First, it requires not only that the regulatory agencies assess the social costs and benefits of each of their rules, but that their rulemaking decisions follow the results of the economic assessments to the extent the regulatory statutes permit. Second, it requires that each proposed and final rule be “cleared” by the Office of Management and Budget (OMB) as being consistent with the order’s cost-benefit tests.

Measured by the criteria of restraining the growth of federal regulation and improving the quality of administrative decisions, this approach has been a clear success. The size of the Federal Register has shrunk for three consecutive years since Executive Order 12291 was issued—the first time this has ever happened. Fewer new rules are being issued, and an increasing proportion of rules are aimed at reforming or eliminating existing requirements rather than laying on new ones. New health, safety, and environmental requirements have been substantially more measured and cost-beneficial than in the past. The OMB review program has, of course, been highly controversial, especially in Congress—but no more so than President Taft’s order requiring the agencies to submit their budget proposals to him rather than directly to the Congress.


Trade: Donald Trump has been vilified, and wrongly accused in the media for being in opposition to free trade.  But on the contrary, Trump is extremely open for free trade agreements, but not in the globalistic ways that the establishment wants to continue forward with.  Once President Reagan was out of office, every single President since has furthered the cause of globalism and corporatism by sending our production elsewhere.  And this can be seen by the fact that the makeup of the annual GDP changed from primarily being manufacturing and industry under Reagan, to now having consumer and government spending making up over 80% of the annual productivity.

Reagan's productivity:

Almost everyone knows that the greatest depression the U.S. ever had was in the 1930’s. It was known as the Great Depression, and its infamy merits a separate section in economics textbooks. But what was its counterpart? When did our greatest economic expansion occur?

We just had it. And it is still expanding, setting new records with each passing month.

We don’t know whether historians will call it the Great Expansion of the 1980’s or Reagan’s Great Expansion, but we do know from official economic statistics that the seven year period from 1982 to 1989 was the greatest, consistent burst of economic activity ever seen in the U.S. In fact, it was the greatest economic expansion the world has ever seen - in any country, at any time.

— NY Times, 1990

These four planks in Donald Trump's economic platform are nearly identical to the decade in which we saw the greatest productivity in our nation's history, at the cost of a small increase in debt to gdp.  And when compared with Hillary Clinton's desired continuation of Obama's/Bill Clinton's legacy of higher taxes, greater regulation, the highest government spending in history, and the lowest GDP results for any President ever, the battle will be won over who can sell the past the best, and use it as the springboard towards the future, and towards the potential for either Making America Great Again, or seeing its final demise.