“My reading of history convinces me that most bad government results from too much government.” John Sharp Williams
We’ve made our disapproval of both presidential candidates clear, but suggested that, given this year’s poor choices, voters consider the platforms of both parties before deciding how to vote.
Last week, we dissected the Democratic platform, and concluded that the party’s problems extend beyond having an untrustworthy candidate. While both Hillary Clinton and Donald Trump deserve their high unfavorable ratings, the party platforms showcase the differences between the two parties.
If a Congressional majority is from the same party as the president, the party platform provides a guide for what to expect. Neither candidate, if elected, is likely to veto major legislation that’s overwhelmingly approved by his or her own party and both have signed off on their party’s platform.
Based solely on the party platform, if you want slow growth, higher taxes, more government and an activist Supreme Court with little regard for the U.S. Constitution, vote for Hillary. It’s all outlined in the platform, which makes 10 references to the right to unionize, but not a single word about the need for tort reform.
While there’s no guarantee that if Donald Trump is elected president the economy will grow again, the Republican platform at least doesn’t abandon the free-market capitalism and Constitutional rights that have made this country the freest and most prosperous country in history.
The Republican platform isn’t perfect, of course. It includes, for example, the construction of a wall along the U.S.-Mexican border, which has been a key issue of the Trump campaign. It’s a nutty idea and it’s never going to happen, but it’s no nuttier than free college or some of the other key planks in the Democratic platform (designed, of course, to appeal to the young, naïve voter, who thinks the 1% should foot the bill for everything).
We’ve also voiced concern about protectionism, as Mr. Trump has been outspoken about trade issues. Both party platforms talk about the need to stand up for America in trade agreements and to act tougher toward China. But if Mr. Trump is still planning 40% tariffs on Chinese goods, it’s not in the party platform.
“We need better negotiated trade agreements that put America first,” according to the Republican platform, which adds, “We envision a worldwide multilateral agreement among nations committed to the principles of open markets, what has been called a ‘Reagan Economic Zone,’ in which free trade will truly be fair trade for all concerned.”
Both candidates have proposed spending that would greatly add to the federal debt, but the Republican platform, like the Republican candidate, have also talked about controlling and even reducing the debt, which we see as the greatest threat to our quality of life, no matter what your income bracket may be.
“Currently, our total debt exceeds $19 trillion,” U.S. Senator Ron Johnson (R-Wisc.) wrote in The Wall Street Journal. “According to the Congressional Budget Office, the projected accumulated deficit over the next 30 years—the baby-boom generation’s retirement bubble—is $103 trillion. To put that into perspective, the net value of all assets held by American households and businesses today totals $121 trillion.”
The Democratic platform makes 16 references to debt—13 to student debt and only three to the federal debt, including two accusing Mr. Trump of trying to raise it. While the Dems fall short of forgiving all student debt, the platform says everyone should be entitled to a college education without incurring debt.
Conversely, the Republican platform says, “Our national debt is a burden on our economy and families. The huge increase in the national debt demanded by and incurred during the current Administration has placed a significant burden on future generations. We must impose firm caps on future debt, accelerate the repayment of the trillions we now owe in order to reaffirm our principles of responsible and limited government, and remove the burdens we are placing on future generations. … A strong economy is one key to debt reduction, but spending restraint is a necessary component that must be vigorously pursued.”
Helping the Middle Class
Overall, the Democratic vision seems in need of cataract surgery, while the Republicans make suggestions that would help, rather than hurt, the economy and the middle class.
For example, during the Obama presidency, many U.S. companies have merged with foreign companies and moved their headquarters abroad, because the U.S. tax code creates an incentive for them to do so.
“American businesses now face the world’s highest corporate tax rates,” according to the Republican platform. “That’s like putting lead shoes on your cross-country team. It reduces companies’ ability to compete overseas, encourages them to move abroad, lessens their investment, cripples job creation here at home, lowers American wages, and fosters the avoidance of tax liability—without actually increasing tax revenues.”
Lower corporate taxes would spur economic growth and business investment, which would increase productivity and create jobs. As the economy grows, competition for talent will be restored and employees will be paid higher wages.
The Democratic platform also proposes more government and more regulations. The Republican platform recognizes that, “Over-regulation is the quiet tyranny of the ‘Nanny State.’“
Noting that the Environmental Protection Agency, the Department of Health and Human Services, the Department of Labor, the National Labor Relations Board, the Federal Communications Commission and others have vastly expanded their regulatory reach under the Obama administration, the platform seeks to curtail government control.
The platform correctly points out that, because of overregulation, more businesses are failing than are forming today.
As one example of how government is driving small businesses into bankruptcy, the platform cites the Consumer Financial Protection Bureau (CFPB), which the Republicans seek to either eliminate or put under the control of Congress.
The CFPB has little to do with consumer protection and a lot to do with harassing small businesses and community banks. An independent agency with no accountability to anyone, the CFPB was “deliberately designed to be a rogue agency,” according to the Republican platform. “It answers to neither Congress nor the executive, has its own guaranteed funding outside the appropriations process, and uses its slush fund to steer settlements to politically favored groups.
“Its Director has dictatorial powers unique in the American Republic. Its regulatory harassment of local and regional banks, the source of most home mortgages and small business loans, advantages big banks and makes it harder for Americans to buy a home. Its one-size-fits-all approach to every issue threatens the diversity of the country’s financial system and would leave us with just a few enormous institutions, as in many European countries.”
Among other things, the CFPB has charged lenders with racial bias in lending by guessing which borrowers are black based on their last names and addresses. It has also cracked down on “payday lenders,” which serve low-income borrowers. As The Wall Street Journal notes, “In its short, unhappy life, the Consumer Financial Protection Bureau has compiled a record of abuse rivaling that of Washington’s most entrenched bureaucracies.”
Republicans also note that state regulations are strangling American entrepreneurship with licensing regulations that stifle competition. For example, according to the Institute for Justice, the average cosmetologist is required to spend 372 days in training compared to 33 for the typical emergency medical technician.
Throughout the Obama administration, economic growth rarely exceeded 2%. It was just 0.8% in the first quarter of 2016 and in the second quarter, the economy grew by just 1.2%.
If much of the Republican platform is implemented, growth could return to its pre-Obama level of an average of 3.3% a year. The chances of a continuation of Obama’s policies, as Mrs. Clinton is proposing, resulting in higher economic growth are nonexistent. It’s not going to happen, no matter what Paul Krugman says.