The Widespread Damage of a One-Party Autocracy Will Flow from Republicans' Bad Policies, Not Bad Procedures

Imagine that I am correct in predicting that Donald Trump will be reinstalled in the White House after losing the 2024 election.  For that matter, go ahead and imagine that he is declared the winner in November and that President Biden concedes.  Either way, Trump ends up back in the White House.  Once there, imagine further that I (along with others) am right that Trump and the Republicans will act on their stated goals of exacting retribution against Democrats, entertainers, journalists, and so on by prosecuting them, deporting them, or ruining them financially.

Imagining all of that, a person might think something like this: "American fascism would be an ugly thing, but millions of people have lived under totalitarian regimes throughout human history.  And while that's bad (perhaps even fatal) for targeted minorities and political opponents of the dictator's regime, life will go on for most people.  I happen to be one of the non-targeted people, and although I would be saddened to see my country turned into a murderous state beyond the reach of law, it would not affect me directly."  Of course, a person could also say something like this: "What do I care?  I don't like those uppity minorities and smarty-pants lefties anyway.  Let 'em fry."

Either way (and there are of course variations on these reactions), the point is that there are people who might reasonably think that they are not directly in the blast zone of the political explosion that will fundamentally change the US and the world later this year.  They are angry about prices having gone up, that the rent is too damn high, and so on.  They might even think that there is something in it for them to live in the world that the Republicans and Trump are frantically trying to create.  A relatively detached person might say, in essence: "What's the worst that could happen ... to me?"

I have been trying to answer that question in recent weeks, describing what we know about the Trumpist agenda for economic policy.  It is not good.  In two recent columns, I reacted to the plan floated by some Trump advisors to end the Federal Reserve's independence in setting interest rates and financial regulations.  Complementing those columns, I then wrote a column last week about an especially nefarious plan to allow the President to control all federal spending decisions.

Combined, those three columns covered both monetary and fiscal policy (the two subdivisions of economic policy), explaining how even "the boring stuff" could be quite bad for most Americans.  That is, although I tend to be most fascinated by the dramatic possibilities like political purges and internment camps, many more people could be hurt -- many fatally, though indirectly -- by Trump's terrible decisions about economic policy.  The title of my most recent column captured the idea: "Absolute Presidential Power that Is Not (Directly) Deadly."  Badly motivated, or simply incompetent, economic policy decisions could harm hundreds of millions of people.

Here, I want to address two further questions.  First, what would Trump do regarding monetary policy that would be harmful?  Second, what would he do regarding fiscal policy (taxing and spending) that would be harmful?  I ask these more specific questions because my previous columns were deliberately nonspecific when it came to Trump's likely actions.  On both monetary and fiscal policy, I basically said that absolute power is inherently dangerous and could lead to bad outcomes.  That is true, but what do those bad outcomes look like?  More importantly, I conclude that it is not the form but the substance -- the policies, not the procedures -- that will do the damage to Americans who think that they will be safe from Republicans' vengeance.

Shortly after news outlets reported the Trumpists' plans to pull the Fed's decisions into the White House, economics professor and former chief economist of the International Monetary Fund Maurice Obstfeld described how Trump's longtime policy druthers constitute "a potent inflationary cocktail."  Trump likes low interest rates and a weak dollar, not because of any sophisticated economic theory but in fact because his mind is stuck on "mercantilism," a discredited seventeenth-century idea that measures a country's economic strength by whether it is running a trade surplus (and how big that surplus is).  This, of course, fits perfectly with Trump's zero-sum thinking, where "we" can only win if "they" lose.

Obstfeld points out that Trump's preferred policies, both separately and in combination, would be inflationary.  In a fully employed economy like ours (Thanks, Biden!), cutting interest rates would tend to overheat the economy.  To be clear, I think that the Fed is currently being a bit too cautious about cutting rates, but the emphasis there is on "a bit," and the larger point is that the Fed's independence in setting policy allows the decision-makers there to resist political pressure to cut rates too quickly and too deeply.

In addition, Trump's desire for a weaker dollar is driven by the idea that a strong dollar makes imports cheaper to Americans and exports more expensive to foreigners.  This supposedly creates the trade deficits that Trump hates so much, and he thus believes that a weaker dollar will make America a net exporter again.  Obstfeld explains how this could only work if other countries agreed to coordinate their policies with Trump's, adding archly: "And good luck organizing a cooperative international effort while Trump is threatening to withdraw from NATO."  But of course Trump would insist on going it alone, which would lead to a race to the bottom.

The larger point is that even if Trump got his way, the results would be to increase prices to Americans as a one-shot deal through the weaker dollar (and, I should add, through his desire to impose enormous tariffs on imports) and to increase the rate of inflation through too-loose monetary policy.  Because Trump and his enablers are a combination of delusional and ignorant, this would not be merely a matter of making policy mistakes after having seized absolute power and not knowing how to wield it.  After all, unpredictable chaos could be inflationary, deflationary, or neither.

This, however, is predictable.  Trump thinks that he can make the US strong by adopting policies that will make Americans weak and poor.  This outcome would be especially poignant, given that so many Americans seem to be willing to vote for a would-be dictator because they are annoyed that consumer prices have gone up (even though wages and salaries are going up more quickly).  If they vote on that basis, they will soon live in a post-democratic country with high inflation and falling living standards.

Now turning to fiscal policy, my column last week focused on a top Trump advisor's plan to allow the President to cancel spending plans that Congress has passed.  Known as "impoundment," this essentially would act as a line-item veto on steroids, giving the President the ability simply to pick and choose how the federal government would spend money.  Trump would do what Nixon once tried to do; and even though the Trumpist plan purports to be merely statutory -- eliminating the Impoundment Control Act of 1974 -- it would in fact require the Supreme Court to allow Trump to violate core separation of powers requirements in the Constitution.  But why would we assume that this Supreme Court would say no to Trump?

In this situation, would Congress have any role?  As to new spending legislation, presumably the neutered national legislature would simply approve whatever Trump told them to approve.  If there were somehow a mini-rebellion, however, and congressional Republicans responded to public opinion by approving some kind of spending that the White House did not want, Trump could simply impound the funds.  As I mentioned last week, one possible response that might appear to be non-compliant with White House desires would be to pass a full-on Christmas Tree budget every year, with the President then playing the Grinch.  Given Trump's desire to play to adoring crowds, however, it seems much more likely that he would make it look like he was the generous one, either forcing Congress to spend on his priorities or simply moving impounded funds to pay for his pet projects.

In the end, however, all of this is merely a matter of arranging deck chairs, because one-party autocratic rule is one-party autocratic rule.  No matter whether the legislature maintains any real power vis-a-vis the executive, we know that both a Republican Congress and a Trump White House would gleefully cut spending on everything they hate: nutrition programs for the poor, public transit subsidies, environmentally friendly infrastructure, public schools, diversity programs, and so on.  They would also cut taxes for the rich and businesses, shifting everything onto the middle class and poor.

The damage in a post-democracy America in terms of spending and taxing, then, would happen whether or not Trump's people succeeded in repealing the Impoundment Control Act or pulling off any other steps toward an imperial presidency.  Most red states do not have serious legislative control of the governing agendas, and this also would be the case at the national level under Trump.  What about laws that were passed by previous Congresses?  It is actually the same analysis, with the power to repeal or amend earlier statutes in the hands of the one-party state that controls all branches of government.

On fiscal policy, then, because there is not even an independent agency like the Fed currently in charge, there would be no need for the Trumpists' to change any statutes to give the White House power to act unilaterally.  They could simply start doing their worst, harming everyone who is not among the very rich whose taxes would be cut.  Giving the White House the extra power to impound funds at will might matter in the occasional case of a minor policy dispute between Congress and the President, but the real damage would come from the simple fact that this Republican Party and their cult leader want to do things that are damaging to the majority of Americans.  And even though everyone is currently saying that Social Security and Medicare are safe, recall that both of those programs have long been in Republicans' sights for being "socialistic."

Would a Trump restoration harm most people -- including the people not directly targeted by Republicans bent on revenge?  Of course it would.  Even setting aside what would happen to people in Ukraine and elsewhere, the vast majority of Americans have plenty to lose on purely economic grounds from a Trump takeover.  And by the time they figure that out, it will be far too late to do anything about it.