Obamanomics was poisonous in that it made market profits harder to come by and government profits more plentiful. It denigrated the entrepreneur and empowered the lobbyist. It made it harder to do well on your own and made it easier to get by with a little help from your friends in Washington.
The state-led corporatism of President Obama bred business dependency on government, and now President Trump is doing the same.
Trump has launched a trade war against China—one which he said would be easy to win, but which we warned would be costly, like the shooting wars of his predecessors. China’s totally expected retaliation has harmed U.S. farmers. So Trump has responded by tapping into the Market Facilitation Program, a New Deal program that allows Trump to hand billions of dollars out to those farmers suffering when China taxes American soy.
The result hasn’t been pretty. The U.S. has paid out billions to farmers who can’t sell their soy. But USDA offices aren’t really equipped to handle the thousands of claims. So many claims have been paid out late that taxpayers are paying millions in late-payment fees. NBC News reported this sad scene:
“We had farmers waiting at the door from 7 o’clock in the morning to 7 o’clock at night,” one Agriculture Department official said.
Picture that. Farmers, who should be growing food and selling it, are standing in line outside a federal office in order to get a check.
Sadly, agriculture in the U.S. is already over-subsidized, through crop insurance, price supports, ethanol mandates, and protectionism. The last thing we needed was for Trump to make it worse. But that’s what his trade war has done: He’s made farmers more dependent on government.
They make less money from selling their crop to people voluntarily buying it, and more money from the U.S. taxpayer.
Thus Trumponomics repeats the vicious circle of Obamanomics. Obama would bail out companies, thus justifying his regulations, thus forcing his subsidies, thus justifying his taxes, and so on. Obama did this for health care, energy, and finance. It’s a pattern that saps the entrepreneurial spirit and breeds government dependence.
Now Trump is doing his own version. He’s hiking taxes (tariffs), which directly hurts consumers and indirectly hurts farmers, and so then he’s hiking subsidies. There’s less market profit and more government profit.
