Hillary Clinton and Donald Trump gave dueling economic addresses this week, offering contrasting visions of where we are now and where each candidate would like to take us.
Speaking in Warren, Michigan on Aug. 11, Clinton challenged listeners to “go out and build the future.” Her speech emphasized job creation, workforce skills and American competitiveness. She pledged to bring broadband to every American household by 2020, to simplify tax filing for small businesses and to spend US$25 billion for infrastructure. Clinton promised to limit child care costs to 10 percent of family income.
Clinton also talked tough on trade policy:
“I will stop any trade deal that costs America jobs or holds down wages, including the Trans Pacific Partnership. I oppose it now, I’ll oppose it after the election and I’ll oppose it as president.”
Meanwhile, during a speech in Detroit on Aug. 8, Trump offered his vision of an “America first” economy. It mixed traditional Republican policies to cut taxes with his against-the-GOP-grain attacks on free trade. He also offered an appeal to working moms with a plan to make child care costs tax deductible.
Tax cuts, however, were the centerpiece of his plans:
“I am proposing an across-the-board income tax reduction, especially for middle-income Americans. This will lead to millions of new good-paying jobs. The rich will pay their fair share, but no one will pay so much that it destroys jobs, or undermines our ability to compete.”
The Conversation scholars have been covering these and other economic themes of the campaign for many months. The following articles are what we consider essential reading on the issues.
Trade takes center stage
Trade has been one of the most important issues candidates have tussled over. Bernie Sanders' anti-trade tirades made the issue a key part of the Democratic primary and forced Clinton to turn against the TPP.
Some scholars have also identified flaws in the 12-nation trade accord. NYU’s Rachel Rothschild writes that it departs from a half-century of diplomatic progress on the environment and human rights:
“America does not need to sacrifice its progress toward worker protections and environmental safeguards to compete for influence with China. We didn’t do this with the Soviet Union, and we shouldn’t do it now.”
Emily Blanchard of Dartmouth, however, explains why she feels progressives should save the TPP from collapse.
“The TPP is less about tariffs and more about creating a coherent global code of conduct for how firms do business in the world. Done right, the agreement would bring important new policy priorities to the negotiating table. It would be a shame to let this chance pass us by.”
Trump, meanwhile, has reversed decades of Republican orthodoxy on trade and made opposing the TPP, as well as past accords like NAFTA, a key element of his economic platform. But is he right that the TPP would destroy millions of jobs? Greg Wright of the University of California, Merced and Emily Blanchard of Dartmouth took a look at the potential winners and losers under the agreement.
“The simple truth is that trade agreements change the composition of jobs in the economy. Some workers will be happier with their new jobs, and others will not. Whatever the job losses from the TPP, a roughly equal number will be created.”
Haves and have-nots
Income and wealth inequality is another persistent theme of the 2016 presidential elections. Alan Auerbach of the University of California, Berkeley and Laurence Kotlikoff of BU designed a large scale study to better define the drivers of the growing gap between rich and poor by focusing on lifetime spending inequality. Their conclusion?
“Inequality, properly measured, is extremely high, but is far lower than generally believed.”
Besides propelling the haves at the expense of the have-nots, the significant inequality that does exist is making us a more polarized nation politically, according to Stanford’s Christos Makridis. And that polarization is actually making it harder to resolve the problem, argue Robert Blendon and John Benson of Harvard.
“What is critical to understand is just how wide the gap between members of the two parties is in terms of how they perceive income inequality’s seriousness and what policies might reduce it.”
Policies and populists
As we approach November, we’re getting more specifics from the candidates on their plans to grow the economy and create more jobs.
Trump, for one, is beginning to offer more detail on his plans to “make America grow again,” but Jeffrey Kucik, a political scientist at City University of New York, warns that there’s a cost to economic policies fueled by populism, as the British are learning after their vote to leave the European Union.
“It shows the dangers of turning away from market institutions like the EU and of introducing political uncertainty into the marketplace. These results should send a powerful warning to those in the U.S. who want to pursue a similar strategy.”