Economic Issues Are Prevalent In This Year's Presidential Campaign
STEVE INSKEEP, HOST:
Somewhere over beyond the argument over who is fit to govern, there's a question of what the presidential candidates would actually do to the economy if they get a chance to govern. With us now in the studios are Jared Bernstein of the Center on Budget and Policy Priorities, former adviser to President Obama. Welcome back to the program.
JARED BERNSTEIN: Thanks very much.
INSKEEP: And he is once again - well, he's on my left. And on the right is Peter Morici of the University of Maryland, a conservative economist and columnist. Welcome to you, sir.
PETER MORICI: Nice to be with you.
INSKEEP: Glad you're both here. OK, decision is tomorrow. How different are the two candidates really on economic issues? Jared, you can go first.
BERNSTEIN: Very different - for one thing, Donald Trump's interpretation of the current economy is very, very negative whereas Hillary Clinton would argue that things are moving in the right direction. So he's very much wrong direction, she's very much we have to build on some of the progress we've made. I think an important - maybe this is a similarity is that Hillary Clinton recognizes there are definitely - a non-trivial corner of the economy that the recovery hasn't met - hasn't reached yet.
But the theory of the case in her camp is that the unemployment rate is below 5 percent, 70-plus months of job growth, wages beginning to pick up, median and low incomes beginning to grow, so this is a we have to build on the progress we've made whereas Trump is much more tear it down, start a very different process.
INSKEEP: Peter Morici.
MORICI: Well, I don't think Republicans or conservatives would deny that the economy has gone through some recovery, but it's been inadequate, and it's been about half the pace as the recovery we had after the oil crisis in the '70s and early '80s. And the focus would be on those corners of the economy that have not done well but in a very different way. I think the Clinton camp would have us go in with more government spending, more government programs, a lot of income redistribution - giving people fish as opposed to teaching them to fish.
The Trump people feel not only don't they know how to fish anymore but there's no water in the pond and they have to put the water back by dealing with issues like trade. If you go to communities like Reading, Pa., all the social programs in the world aren't going to help them if you don't reopen the factories.
INSKEEP: Let me ask about that, though, because Trump's economic program comes across as nostalgia essentially. We're going to bring all the steel jobs back, and actually, most of the steel jobs were lost to mechanization, not trade.
MORICI: That's not true. It's about half and half.
INSKEEP: About half and half - OK, so not all. But in any case, he seems to be looking backward. Is it a question of who's going to take the economy back versus who's going to take the economy forward? Is that a way to think of this?
MORICI: I think that's a good point of departure. My feeling is is the Democrats put too much faith in technology and progress and neglect the fact that about a third of the population is never going to be high tech, it is never going to be in finance and things of that nature. And we have to find reasonable employment programs for them other than say just government jobs 'cause we can't afford to employ them all.
BERNSTEIN: So I don't disagree with some of what Peter's saying. I think that he is kind of giving the Trump team a lot more credit than they're due in terms of what actual policies they've had to kind of unravel some of the problems we've been talking about. So for example, Peter suggests - and I agree - that there are people who need significant help to find work in today's economy. A displaced production worker from the factory line, you know, really probably isn't going to become a child care worker, you know, next month. And that takes resources. And one of the problems coming in for Donald Trump, if he were able to get his tax plan through the Congress, you'd actually be looking at adding literally trillions to the deficit over the budget right now.
INSKEEP: Oh because he's proposing widespread tax cuts OK.
BERNSTEIN: Because he's proposing these very large tax cuts. So this is the trickle down supply side stuff that never works. All it does is kind of screw up our fiscal accounts while exacerbating inequality (ph). And that means you don't have the kinds of investment dollars you need, whether we're talking about infrastructure, whether we're talking about human capital, whether we're talking about people who've been displaced by manufacturing. And I think that absence of a credible plan is problematic.
MORICI: Building roads to Reading, Pa., doesn't solve the problem that folks don't want stuff they make. What you have to do is create a market environment where jobs are created. It simply can't be done through training programs. Training people to be welders is of no value if buildings are not going up.
BERNSTEIN: So describe one Trump policy that does that, I guess, is where I'm coming from.
MORICI: I think that when we evaluate Trump, we have to look at him in terms of Obama. Obama came with a lot of generalizations...
BERNSTEIN: So you've yet to really nail down..
INSKEEP: Oh, no, no, no, wait a minute. Let's let him finish. Let him finish. It's OK.
MORICI: You're not being - you're not being reasonable when you do that, Jared. Trump is going to govern within the context, if he were elected, of a Republican Congress. And he's going to have to reach compromises with his opposition, which is going to be Ryan, not Pelosi.
INSKEEP: Paul Ryan, the speaker of the House.
MORICI: And in that context, we're not going to have these trillion-dollar tax cuts. We're going to have a flatter tax structure which provides more incentives for capital to invest, which has been not - which has been missing in this recovery. And we're probably going to have a tougher trade policy. Hillary Clinton's for a tougher trade policy when she's running for office and she's not so tough when she gets in. I think that with Trump, we are not going to have this big wall with Mexico. That's an absurd thing. But what we are going to do is renegotiate with the Chinese, something this White House and Hillary, as secretary of state, was unwilling to do.
BERNSTEIN: Look, I don't want to - I don't want to be unreasonable, but again, I just - I never hear anything concrete that I, as an economist who care about those who've been left behind or, for that matter, a voter who's trying to figure out what is this guy talking about, has to latch on to. So Hillary Clinton has an infrastructure plan, which, by the way, regardless of whatever particular town is dealing with manufacturing constraints, we definitely need infrastructure investment, and she has a way to pay for it. She has a college debt plan. She has a way to pay for it.
She wants to preserve the Affordable Care Act. She has a way to pay for it. Now, there's a very good question of how you get any of that stuff through Congress. But it is a very concrete set of ideas designed to help reconnect people who've been left behind to a growing economy.
INSKEEP: Peter Morici.
MORICI: I don't think they would work. Frankly, I do not think building roads through Reading, Pa., will solve the problem. You need to create demand for what people work in, and in this global economy, one-third of our population is uncompetitive, and we have to figure out why and fix that.
INSKEEP: Last week, we were in the poorest county in North Carolina, a big swing state - $29,000 median household income, agricultural area, most jobs, or a lot of jobs, are taking care of senior citizens - don't pay a lot. What would either candidate do for that? Very briefly, a few seconds.
BERNSTEIN: OK, so first, increase the minimum wage. Secondly, increase the earned income and the child tax credit. These are two work-support tax credits that you don't get unless you work, so they're pro-work, and they help raise the incomes of the very folks you're talking about.
INSKEEP: Peter, you get the last word.
MORICI: A tougher - a tougher policy on trade would bring some manufacturing jobs back to those areas. There wouldn't be as many before because of mechanization, but some would come back. We'd see more furniture factories, textile factories, things of that nature. Merely giving people fish doesn't solve the problem in the long term. You've got to put some water in the pond.
INSKEEP: Peter, thanks very much for coming by, really appreciate it. That's Peter Morici of the University of Maryland, conservative columnist; also Jared Bernstein of the Center on Budget and Policy Priorities. Thanks to you as well.
BERNSTEIN: Thank you.
MORICI: Thank you.
INSKEEP: Gentlemen, it's been a pleasure to have your analysis at different points during this election year.
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