By tomorrow morning, he should be back on one of his golf courses. Or prepping for a new series of the Apprentice. Or quite possibly spending more time with his lawyers. Either way, if the polls and bookmakers are to be trusted, Donald Trump will be the first sitting president to be ejected from office since George Bush Senior, way back in 1992. In truth, he won’t be much missed. His bullying, narcissistic manner demeaned the office. His estranged relationship with the truth made him an unreliable ally. And his lack of empathy made him a poor leader at a time of crisis.
But in one respect at least he will have a legacy. He is the first leader since Ronald Reagan and Margaret Thatcher to show two things; that you can deregulate; and that you can dramatically reduce taxes. And that both will make an economy more competitive.
When the history books deliver their judgement on the brief Trump administration, the verdict is likely to be mixed, at best. And yet the economic record is in many ways surprisingly strong, not just for its tangible achievements, but for the way it has shifted the consensus.
During his time in the White House, there was a sweeping and dramatic reform of a tax system that had become one of the most uncompetitive in the world, with the corporate rate cut from 35 per cent to a flat rate of 21 per cent. Just as significantly, he started an assault on red tape and regulations that had turned what was one of the most enterprising societies into one of the most regulated and bureaucratic (the US was turning into France, but with rubbish cheese). Congress was forced to repeal two regulations for every new one implemented, and so were most government agencies. Enterprise zones, sometimes just a few run-down blocks, revitalised many urban areas that blighted cities. The net result? Business creation went up and jobs were created.
Sure, Trump had some batty ideas, but even those turned out to be fairly harmless. He didn’t build a wall with Mexico, or make them pay for it. In fact, remittances from Mexican workers in the US rose significantly, and so did the peso, over the last four years (Mexico did better with Trump than it did under Obama). Nafta was rebranded, but it wasn’t abolished. And for all the talk of a trade war with China, exports across the Pacific just kept on going up (overall, China’s surplus with the US has risen by 43 per cent since Trump took office). Up until the Covid-19 crisis, the US was growing faster than every other major economy, and its technology giants have turned into the most innovative companies in the world. We will see what happens when the virus has subsided, but it is likely the US will emerge in better shape than other developed economies.
The important point is surely this. For two decades, the political consensus has been for rising taxes and more and more regulation. In just about every major economy, whether it is run from the right or the left, the state’s share of GDP has risen, and the levels of regulation just keep on going up.
Trump showed you can break through that, and get great results. He won’t be missed if he is evicted from the White House this week. He was too flawed a leader for that. But we should hope a more acceptable generation of political leaders at least notices what he got right – and works out how to build on that legacy.
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