Advice for the Aspiring Autocrat

August 14, 2024

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Having just discussed Anne Applebaum’s Autocracy, Inc., I was planning to relate that book to Donald Trump. Then I decided not to take on the task of trying to list his many autocratic tendencies and violations of democratic norms. Instead, I will discuss the more general issue: How does one go about becoming an autocratic ruler within a democratic society? Trump is so vain that he will probably think this post is about him anyway, but I can’t help that.

Suppose you are aspiring to become the closest thing to a dictator the United States can produce. You will need to take a good look at yourself and see if you have what it takes. A narcissistic personality is a plus. Be so much in love with yourself that you place yourself above everybody else, believing that you alone can solve the country’s problems. If you are a really good candidate for psychotherapy, you can actually hate yourself deep down, but be sure to disguise that feeling with bluster and braggadocio.

You will also need an obsession with wealth and power. You are probably a product of authoritarian parenting, with a much greater emphasis on control than emotional support. This left you with a craving to be the one in control yourself. You also like capitalism more than you like democracy, because of the opportunities it offers to amass wealth. You are rather contemptuous of rules and regulations that would get in your way.

This being a formal democracy, your success in becoming an autocrat probably depends on being elected president. Unless you want to finance your own campaign, which would seriously cut into your wealth, you will need to appeal to some American oligarchs for large campaign contributions. The best strategy there is to assure them quietly that you will cut their taxes or free them from some inconvenient regulations.

You will also need a lot of popular appeal, for votes and smaller contributions. Since you have devoted your life to personal success rather than public service, you are probably a political outsider with little policy-making experience. That can work to your advantage however, since you can claim to represent “ordinary Americans” instead of those educated “elites” who run Washington. You can also present yourself as a culture warrior defending the dominant race and religion against the inroads of cultural minorities. Be sure to blame the problems of the country on alien influences, especially immigrants from nonwhite and/or non-Christian countries.

The next thing to do is claim such a strong popular mandate that winning elections is only a formality. Declare that you cannot possibly lose unless the election is rigged. That suits your personality anyway, since you cannot stand not coming out on top, and you love putting others down. You have little to offer as far as creative policy proposals, so you will have to run a negative campaign, playing on the fears of your supporters. Smear your opponents as dishonest and incompetent, especially if they are more honest and competent than you are. Douse the electorate with a “fire hose of falsehoods” to undermine honest debate and informed voting, two of the hallmarks of democracy.

Once in office, concentrate as much power in your own hands as possible. Appoint judges who have a broad view of executive power. Reclassify non-partisan positions as political appointments, so you can replace policy experts with loyalists to yourself. Weaponize the Justice Department and Congressional investigative committees against your opponents. Try to remain in power as long as possible, preferably for life. Win elections by whatever means you can, legal or nonlegal. If you appear to have lost, try to overturn the result. If you are impeached, rely on party loyalists to acquit you. If you are prosecuted for crimes, rely on friendly judges to grant you immunity.

The more autocratic you become, the more the resources of Autocracy, Inc. are at your disposal. Admire and support other autocrats, overlooking their own violations of democratic norms or human rights. Do your best to weaken democratic alliances such as NATO. Accept the assistance of other autocrats who want to help you get elected and remain in office. They can help by running their own smear campaigns or hacking into your opponents’ accounts. In a pinch, you can always accept a large campaign contribution from a foreign dictator, but that’s illegal, so be sure to launder that money well.

I am sorry to have to warn you—actually, I’m relieved—that the institutions of democratic society may hold, and your bid for autocracy may ultimately land you in jail.

I wish I could claim that I am just exercising my fertile imagination about all this. On the contrary—all I’ve done is follow the news.


Autocracy, Inc.

August 12, 2024

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Anne Applebaum. Autocracy, Inc.: The Dictators Who Want to Run the World. New York: Doubleday, 2024.

Pulitzer Prize-winning journalist and historian Anne Applebaum has written a short but insightful book about the form that many undemocratic regimes are taking in the world today.

After the Soviet Union collapsed and the Cold War ended, many Western politicians and commentators became optimistic about the spread of democracy from West to East. Global communication and trade would lead more countries to adopt the political and economic institutions of the “free world.”

Everyone assumed that in a more open, interconnected world, democracy and liberal ideas would spread to the autocratic states. Nobody imagined that autocracy and illiberalism would spread to the democratic world instead.

Many countries have seen the rise of new autocrats who use international connections to strengthen their own positions. Unlike the autocrats of an earlier era, they are less ideologs than deal-makers, less interested in joining a bloc of nations than making self-serving connections wherever they can, even within more democratic countries. They seek wealth and power for themselves and their friends as much or more than for their own nations. “Autocracy, Inc.” refers to the networks of connections that support such leaders both within and among countries.

Often the cooperation among autocratic forces is economic, as when countries like the United Arab Emirates are available to launder or invest stolen wealth. Sometimes it is military, as when Russia and Iran helped Syrian dictator Bashar al-Assad put down a popular uprising.

Applebaum encourages us to stop thinking of autocrats as local leaders, too isolated to pose much threat to the democratic West.

A world in which autocracies work together to stay in power, work together to promote their system, and work together to damage democracies is not some distant dystopia. That world is the one we are living in right now.

Kleptocracy

After the breakup of the Soviet Union, Vladimir Putin led Russia to create a new kind of government, which Applebaum calls an “autocratic kleptocracy.” It exists not just to govern but to siphon off national wealth for personal gain. Even when he was mayor of St. Petersburg, Putin was profiting from his authority to issue export licenses, diverting income from the sale of commodities “into the bank accounts of an obscure group of companies owned by Putin’s friends and colleagues.” After becoming president, Putin created an autocratic form of capitalism:

Russian “capitalism” was, from the very beginning, designed to favor insiders who knew how to extract and hide money abroad. No “level playing field” was ever created in Russia, and the power of competitive markets was never unleashed. Nobody became rich by building a better mousetrap. Those who succeeded did so thanks to favors granted by—or stolen from—the state. These were the true beneficiaries of this system: the oligarchs whose fortunes depended on their political connections.

Putin benefited from his background in intelligence, since the KGB was experienced in money laundering to cover up its funding of terrorists and agents in other countries. He also took advantage of the “amoral world of international finance,” in which Western banks and other institutions were happy to see money flowing in their direction, whatever the source. The interconnected world of the global economy provides many places to hide money. Some US states—Delaware, Nevada, South Dakota, and Wyoming—have made it especially easy for crooked autocrats and their cronies to invest anonymously.

In her chapter, “Kleptocracy Metastasizes,” Applebaum focuses on Venezuela and Zimbabwe as other examples of corrupt autocracies. She emphasizes how much their leaders—Chavez and Maduro in Venezuela, Mugabe and Mnangagwa in Zimbabwe—benefited from the assistance of other autocracies to remain in power, such as Russia, China, Iran, Cuba and Turkey. She says little about financial dealings elsewhere, so I was not entirely clear on whether she considers a leader like Xi Jinping of China a kleptocrat as well as an autocrat.

Anti-democracy

Today’s autocrats are less likely than Adolph Hitler or Joseph Stalin to embrace a particular ideology, whether right or left. They do, however, have an interest in undermining democratic thinking, both at home and abroad. They may offer no utopian vision, no promise of a better world just over the horizon. They are more likely to tear down the promise of democracy, depriving their people of any alternative to autocratic rule, with all its flaws. Applebaum gives the example of China after the Tiananmen Square protests of 1989:

To prevent the democratic wave then sweeping across Western Europe from spreading to the East, China’s leaders set out to eliminate not just the people but the ideas that had motivated the protests: the rule of law, the separation of powers, the right to freedom of speech and assembly, and all the principles that they described as “spiritual pollution” coming from the democratic world.

Autocrats have learned how to use new information media to wage disinformation campaigns, exaggerating the problems of democratic countries and denying their accomplishments. A “fire hose of falsehoods” leaves people not knowing who to trust or what to believe. These campaigns are international as well as national. If autocrats can get media in other countries, especially more democratic countries, to spread their propaganda, so much the better. “Information laundering” is the analog of money laundering. Since the invasion of Ukraine, Russian agents posing as Americans have spread the idea that the war is none of America’s business, and some American right-wing media have reinforced the message.

When Putin helped Assad remain in power in Syria, he got the added benefit of creating a problem for European democracies. Syrian refugees flooded into Europe, aggravating domestic conflicts and encouraging isolationist sentiment. Russia then reinforced those trends by spreading anti-immigrant propaganda in European media.

Autocratic governments have also campaigned to change the language of international diplomacy, removing references to human rights. They accuse Western governments of an imperialist effort to impose their own values on the world. Instead they offer the ideal of “multipolarity.” Countries ought to respect one another’s sovereignty, even when a sovereign government is practicing autocratic kleptocracy at home and exporting it abroad.

Nonviolent warfare

In his 1993 book, Dictatorship to Democracy, Gene Sharp recommended a wide range of nonviolent tactics that people could use to fight authoritarian regimes. Unfortunately, autocratic governments also became more skilled in the use of nonviolent methods, especially propaganda campaigns to discredit opposition leaders. Governments accused of corruption confuse the public by leveling similar charges against their accusers. They use violence too, but not the mass violence associated with Nazis or communists. They find that “targeted violence is often enough to keep ordinary people away from politics altogether, convincing them that it’s a contest they can never win.” Sophisticated surveillance systems, often purchased from Western technology companies, help identify and target dissenters.

Smear campaigns cross borders more easily than armies. After Secretary of State Hillary Clinton spoke out against Russian human rights violations, Putin retaliated with an online smear campaign to help defeat her 2016 bid for the presidency. A casual reader of Facebook or Twitter would have little idea of where the attacks were coming from.

Countermeasures

In her Epilogue, Applebaum suggests a few ways that citizens of democracies can fight back. Again, she encourages us to bear in mind that this is not mainly a war between countries or blocs of countries. Autocratic movements cross national lines, and so must the countermeasures. We should “think about the struggle for freedom not as a competition with specific autocratic states, and certainly not as a “war with China,” but as a war against autocratic behaviors, wherever they are found.”

One goal is to fight international kleptocracy and money laundering by making property ownership more transparent. Foreign oligarchs should not be able to hide their ill-gotten gains by buying property in Wyoming.

To counter authoritarian ideas, advocates for democracy must do more than just compete with autocrats in the “marketplace of ideas.” That marketplace is too easily dominated by big spenders who finance massive disinformation campaigns, and by “social media companies whose algorithms promote emotional and divisive content.” Express an interest in one conspiracy theory about the “Biden crime family,” and you will be treated to a dozen more. Democratic governments and their supporters are starting to expose disinformation campaigns and call for more regulation of social media platforms.

Political leaders were naive to think that free trade with undemocratic countries would make those countries more democratic. For one thing, free trade carried the risk of becoming too dependent on autocrats for strategically important goods, such as European dependence on Russian oil before the invasion of Ukraine. Applebaum wants trade relationships to be more selective, avoiding dependence on “anything that could be weaponized in case of a crisis.”

Autocracy here?

The ultimate danger is that Autocracy, Inc. will extend its tentacles so far into democratic countries that they will become autocracies themselves. Writers like Levitsky and Ziblatt have observed that most breakdowns of democracy have occurred not through military coups, but through the democratic election of leaders who used the powers of their office to promote authoritarian rule. Applebaum’s book adds another dimension to this warning. The threat to democracy from would-be autocrats is only heightened when existing networks of accomplished autocrats and their enablers are available to assist them. I will relate that point to Donald Trump’s bid for another presidential term in my next post.


Trump’s Criminal Conviction

May 30, 2024

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Now that Donald Trump has been convicted on all counts by a Manhattan jury in the hush-money case, let’s be clear on the crimes he committed.

Falsification of business records

Trump was found guilty of falsifying business records—specifically invoices, ledger entries and checks relating to the reimbursement of Michael Cohen for paying hush money to Stormy Daniels. The law does not require that Trump falsified the paper work personally. He can have caused someone else to do it.

The underlying conspiracy

What makes the falsifications felonies rather than misdemeanors is that they were done to cover up another crime. According to the jury instructions:

Under our law, a person is guilty of falsifying business records in the first degree when, with intent to defraud that includes an intent to commit another crime or to aid or conceal the commission thereof, that person: makes or causes a false entry in the business records of an enterprise.

The underlying crime Trump was found to be covering up was conspiring to promote his 2016 election by illegal means.

The People allege that the other crime the defendant intended to commit, aid, or conceal is a violation of New York Election Law section 17-152.

Section 17-152 of the New York Election Law provides that any two or more persons who conspire to promote or prevent the election of any person to a public office by unlawful means and which conspiracy is acted upon by one or more of the parties thereto, shall be guilty of conspiracy to promote or prevent an election.

Trump entered into a conspiracy with Michael Cohen and David Pecker of The National Enquirer to suppress stories that might damage his candidacy, especially after the Access Hollywood recording revealed his demeaning attitudes and sexually aggressive behavior toward women. Cohen advanced that conspiracy by paying hush money to Stormy Daniels. Then the Trump Organization reimbursed him for that payment, but falsified the business records to disguise the nature of the payment.

Unlawful means

Promoting Trump’s election, even by paying someone to buy their silence, would not have been illegal in itself. The jury had to agree that the conspirators used some unlawful means to carry out their objectives. They did not have to agree on the specific means used. The jury instructions gave them several possibilities:

In determining whether the defendant conspired to promote or prevent the election of any person to a public office by unlawful means, you may consider the following: (1) violations of the Federal Election Campaign Act otherwise known as FECA; (2) the falsification of other business records; or (3) violation of tax laws.

Here are specific acts that fall into those categories: (1) The payment to Stormy Daniels was allegedly an illegal campaign contribution both by Michael Cohen and the Trump Organization. (2) Michael Cohen allegedly falsified bank records when he applied for a bank loan and wired funds to Stormy Daniels’ lawyer. The Trump Organization allegedly falsified another business record when it issued a phony 1099 to pass off Cohen’s reimbursement as taxable compensation for legal services. (3) Cohen allegedly filed fraudulent tax returns when he over-reported his taxable income for the same reason.

This part is a little confusing, but the smoking gun that revealed the falsification of records was that the organization did not just write Cohen a check to reimburse him for the $130,000 he paid Stormy Daniels. That would be too obvious. They doubled the amount to cover the taxes he would have to pay when he reported it as taxable compensation instead of a reimbursement. Then they generated phony invoices to make it appear that he was earning the higher amount as legal fees.

With all these alleged “unlawful means” to choose from, the jury probably had little difficulty agreeing that some unlawful means had been used to carry out the conspiracy. That’s all the law requires.

Does it matter?

Like most observers, I regard the hush-money conspiracy as less important than the other crimes for which Donald Trump has been indicted:

  • trying to overthrow the results of the 2020 election by recruiting fake electors to cast uncertified state votes
  • encouraging the assault on the Capitol
  • stealing classified documents from the White House

I do think it matters though, since the 2016 election was settled by a small number of votes in a few states. In the wake of the Access Hollywood scandal, when many voters were reconsidering their support for Trump, the successful conspiracy to silence Stormy Daniels could have provided the margin of victory. If the 2024 election is just as close, clearly identifying Trump as a convicted felon may matter to at least a few voters. For most public offices and many other positions of responsibility, it would be automatically disqualifying.


The Power to Destroy (part 4)

May 29, 2024

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Since the late 1970s, a powerful antitax movement has advocated a reduction in the portion of national income that goes to fund government. What has it accomplished?

Tax cuts, then and now

To answer that question, I found that I had to distinguish between two very different periods of tax-cutting. The first began with the Reagan tax cuts of 1981, and the second with the Bush tax cuts of 2001.

Most tax-cutters wanted to both reduce tax rates and shrink the size of government by cutting spending. (A few argued that reducing the federal budget would not be necessary, because the tax cuts would pay for themselves.) What is interesting about the period from 1981 to 2000 is that the antitax forces succeeded a little more in cutting spending than in lowering taxes. Government outlays went down from 20.7 percent of GDP in 1980 to 17.5 percent in 2000, while government revenue went up from 18.1 percent to 19.8 percent. As a result, the budget went from a deficit of 2.6 percent of GDP to a surplus of 2.3 percent. Why? Because when faced with the high deficits resulting from the Reagan tax cuts, political leaders got serious about balancing the budget. They accomplished this both by raising taxes and cutting spending.

The fiscal trends in the second period, 2001 to 2023, were the opposite: The Bush and Trump tax cuts really did bring federal revenue down, while federal spending went up. That’s because the country cut taxes in both good times and bad, while also spending to address the national emergencies of the War on Terror, the Global Financial Crisis, and the Covid pandemic. The budget went from a 2.3 percent surplus in 2000 to a 6.2 percent deficit in 2023.

For much of the nation’s history, taxes were increased to fund wars and new entitlement spending, such as for Social Security and Medicare. In the twenty-first century, however, commitments not to raise taxes meant that massive spending to fund the wars following the terrorist attacks on September 11, 2001, to add prescription drug coverage to Medicare, to keep the economy afloat during the global financial crisis, and to respond to the Covid pandemic all went unfunded.

Low taxes and the economy

The effect of low taxes and federal deficits on the economy is a difficult and controversial topic. A tax cut is not a controlled experiment, since the economy is changing in other ways all the time. Some ideas do stand the test of time. The old Keynesian idea that tax cuts and deficit spending can stimulate the economy during recessions remains alive and well, thanks to the experience of the Great Recession of 2007-2009 and the Covid recession of 2020. The idea that low taxes accelerate growth any time finds less support, since the economy grew faster in the high-tax postwar era and in the 1990s than in the recent period of lower taxes. Graetz says that “the most robust economic growth since 1978 occurred during years following Bill Clinton’s 1993 tax increases. Tax reductions at the top have spurred neither great increases in domestic investment nor bursts of increased productivity.”

Lower taxes have been a contributing factor to economic inequality. The main beneficiaries of tax cuts have been the wealthy, who are disproportionately impacted by cuts in income taxes, estate taxes, capital gains taxes, and corporate taxes (as shareholders). They also have ways of living off their existing wealth while paying hardly any taxes at all.

Rich Americans borrow cheaply against their stock and bond portfolios to fund their lifestyles without paying any income taxes. Increases in the values of assets are not taxed as income until the assets are sold, and the tax law forgives any income tax on a lifetime of gains if assets are held until death.

Low taxes and government

Low taxes and high deficits may hamper the government’s ability to respond to new crises, such as climate change, global political threats like Russian or Chinese expansionism, demographic changes increasing the costs of Social Security and Medicare, economic dislocations caused by new technologies, and new demands for human capital development. The national debt is now so large that the country spends about as much on interest payments as it does on national defense.

This year’s presidential election is, among other things, a choice between two different fiscal approaches. President Biden wants to raise taxes on individuals with incomes over $400,000, raise the corporate rate from 21 percent to 28 percent, and create a wealth tax on people with over $100 million in assets. Former President Trump wants to make permanent his 2017 tax cuts favoring the wealthy.

I began with John Marshall’s observation, “The power to tax involves the power to destroy” and Graetz’s addendum, “So, it turns out, does the power not to tax.” I agree with Graetz’s suggestion that low taxes may now be a bigger threat to national greatness than high taxes.


The Power to Destroy (part 3)

May 28, 2024

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In 2000, George W. Bush won the presidency by the narrowest of margins in the Electoral College. Graetz calls this “a fateful turning point for antitax advocates.” They would not achieve their most radical goals of abolishing income taxes or replacing the progressive income tax with a “flat tax” where all incomes were taxed at the same rate. But they would succeed in lowering tax rates again, especially for the wealthy.

Bush—from surplus to deficit

“Bush and his team designed his tax plan to include an across-the-board reduction in income tax rates that provided the greatest benefits to the top but also cut income taxes for everyone.” Two tax bills accomplished Republican aims, the Economic Growth and Tax Relief Reconciliation Act of 2001, and the Jobs and Growth Tax Relief Reconciliation Act of 2003. Together they lowered the top bracket rate from 39.6 percent to 35 percent, reduced the lowest rate from 15 percent to 10 percent, further reduced estate taxes, increased the child tax credit and extended it to higher-income families, reduced capital gains taxes, and taxed dividends at the low capital gains rates instead of ordinary income rates. The projected cost of the tax cuts was reduced by scheduling some of them to expire at the end of 2010.

The Bush administration was not deterred in its tax cutting by having to spend money on homeland security and Middle East wars following the September 11, 2001 terrorist attacks. The administration also added an unfunded prescription drug benefit to Medicare. By 2004, federal revenue had fallen to 15.6 percent of GDP, the lowest since the 1950s. The surplus that existed when Bush took office had turned into a deficit of 3.4 percent. This time, deficits would turn out to be a normal feature of federal budgets.

Near the end of Bush’s two terms, the Global Financial Crisis and ensuing Great Recession led Congress to enact economic stimulus legislation, which helped the economy but made the deficit worse. The measures included tax rebates of $300 per individual taxpayer and $300 for children, which phased out for higher-income taxpayers. The Keynesian idea of boosting the economy from the bottom up was coming back in style, but Republicans still preferred tax breaks to new domestic spending programs.

Obama—economic stimulus and resistance

Barack Obama became president in 2009 during the worst economic recession since the Great Depression. His American Recovery and Reinvestment Act tried to stimulate the economy with tax cuts, aid to the states, and infrastructure projects. It included the “Making Work Pay” credit that temporarily reduced taxes for working families by up to $800 in 2009 and 2010. In those two years, the deficit soared to about 9 percent of GDP.

Obama also wanted to fulfill his campaign promise of making health insurance more affordable. In 2010, Democrats narrowly passed the Patient Protection and Affordable Care Act (popularly known as Obamacare). It required taxpayers to carry health insurance, expanded Medicaid coverage, and subsidized insurance for other low-income taxpayers. It relied for funding on a combination of taxes on high-income individuals, health insurers, pharmaceutical companies, and medical device manufacturers.

Republicans steadfastly opposed Obama’s fiscal agenda. Their priority was extending the Bush tax cuts.

The antitax movement entered a new phase with the emergence of the Tea Party. The triggering event was Obama’s proposal to assist homeowners facing foreclosure. The collapse of the housing market had left many homeowners owing more than the market value of their home. Critics revived the old claim that Democrats were spending the money of hard-working taxpayers to assist undeserving deadbeats.

In the 2010 midterms, Republicans gained 63 seats in the House, the largest increase in over sixty years. They had a lot of bargaining power too, because Obama needed their cooperation to raise the debt ceiling to accommodate the growing national debt. In return, Obama had to agree to cut spending.

The Bush tax cuts were scheduled to expire at the end of 2010, but allowing taxes to rise was politically very difficult in the face of Republican opposition and a struggling economy. The Bush cuts were extended for two more years. Then in 2012, the American Taxpayer Relief Act made most of the cuts permanent, except those affecting the top 1% of taxpayers. The top tax rate was raised from 35 percent back to what it was under President Clinton, 39.6 percent. The government gave up most of the revenue it could have had by letting the tax cuts expire. Instead, it relied on austerity on the spending side to bring down the deficit to around 3% by the end of the Obama administration. Graetz concludes, “Despite Republicans’ moaning, they had won the war over taxes. Republicans remained steadfast against tax increases at any time.”

Trump—another round of tax cuts

Donald Trump was an unconventional Republican who appealed more to “America first” nationalism than to traditional free-market economics. His most well-known goals were restricting immigration, reducing foreign imports and bringing back American manufacturing jobs. Nevertheless, he followed the new Republican orthodoxy that called for tax cuts regardless of fiscal and economic circumstances.

Donald Trump’s calls for tax cuts were common for a Republican president but were exceptionally large for a growing economy facing large deficits. Singing from the classic antitax songbook, Trump insisted his tax cuts would not add to federal deficits or debt.

Trump claimed publicly that his tax plan would raise the taxes of wealthy people such as himself, while privately assuring his rich friends that he would lower their taxes. When he revealed his actual tax plan after taking office, neither economists nor the general public were enthusiastic. Since the Republicans now held majorities in both houses of Congress, he could pass it entirely without Democratic votes, and he did. The Tax Cuts and Jobs Act of 2017 cut both personal and corporate taxes. It also doubled the amounts exempt from estate taxes. The bill held down the projected cost by making the personal tax cuts “temporary” (from 2018 to 2025), but Republicans were confident that a future administration would be compelled to continue them. Wealthy taxpayers got the largest cuts, both in absolute dollars and as a percentage of income. The top bracket rate was cut from 39.6% to 37%.

President Trump tried to create American jobs by putting tariffs on certain imported goods, especially from China. These had two downsides that made them unpopular with economists: Importers passed along their increased costs to consumers; and China retaliated with tariffs on our agricultural exports. “Trade experts estimated the steel and aluminum tariffs cost American consumers and businesses about $900,000 for every job they saved or created.”

Under Trump, the deficit increased from 3.1 percent of GDP in 2016 to 4.6 percent in 2019. That was before a new national economic crisis induced a new spurt in federal spending. This time it was the Covid epidemic, which brought much of the country’s economic activity to a halt.

Biden—tax benefits for the non-rich

Like Obama before him, Biden inherited a distressed economy, which he tried to stimulate with both tax rebates and new spending.

With narrow control of both houses of Congress, Democrats managed to pass the American Rescue Plan Act of 2021. It contained new spending to fight Covid, especially to fund vaccinations. It also included tax credits, 70% of which went to families with less than $91,000 of income. It raised the child tax credit from $2,000 to $3,600 for each child under six, and to $3,000 for older children. Congressional Republicans, who for forty years had rarely met a tax cut they didn’t like, unanimously opposed this bill.

The Inflation Reduction Act of 2022 also passed without any Republican support. Its main goals were to promote clean energy production and hold down the costs of health care and health insurance. It was funded mainly with a 15 percent minimum tax on corporations (aimed at corporations that had been paying little or no taxes at all), and additional revenue expected from an increase in IRS funding. (Better enforcement of the tax code with more agents and auditing normally brings in more money than it costs.) Republicans especially hated the IRS funding, and tried unsuccessfully to repeal it.

Biden wanted to raise taxes on the wealthy, but never succeeded in doing so. The deficit spiked to 12.1% of GDP in 2021, but went down to 5.3 percent after the American Rescue Plan’s temporary spending and tax credits ended. As of now, expenditures have exceeded revenue every year since 2001.

In my last post on this book, I will offer some reflections on what the antitax movement of the last half century has accomplished, and what it has meant for the country.

Continued