To prepare for tonight’s debate, I decided to think through Donald Trump’s promise to deliver 4% annual economic growth. First off, if this is Trump’s goal, then his program is as much a fraud as his foundation or university. If anything, his proposals would slow our already modest growth. To be sure, no one has a silver bullet to raise the economy’s underlying growth rate. But that doesn’t mean we’re helpless, and Hillary Clinton’s program will almost certainly raise that growth rate.
Four percent growth is not unprecedented. Under JFK and LBJ, the economy grew an average of 5.2% per year; and Bill Clinton produced 3.8 % average growth over eight years, including five years of 4% growth or more. But they were exceptions: Ronald Reagan and Jimmy Carter each managed 3.4% average annual growth; George H. W. Bush and Barack Obama each achieved 2% annual growth, and George W. Bush eked out just 1.6% annual growth. Moreover, the Federal Reserve forecasts that the U.S. economy will continue to grow an average of 2% annually for the next decade. This forecast and the record under Obama and Bush II all suggest that strong headwinds are hampering America’s economic growth.
By the arithmetic, economic growth measures how much more goods and services the economy has produced in one year, compared to the preceding year. That tells us that two key factors for higher growth are how many more people have jobs producing goods and services, and how productive, on average, everyone is producing those goods and services. By the arithmetic, strong growth rests substantially on increasing the number of people with jobs and the productivity of the entire workforce.
One reason for the disappointing growth of the last 15 years is that the number of net new workers each year slowed sharply. For that, blame the decline in U.S. fertility rates that began 20 years ago, rising rates of retirement by aging baby boomers, the slowdown in immigration sparked by the Great Recession, and steady erosion in the labor participation rate (LPR). All told, the Bureau of Labor Statistics reports that the U.S. workforce is now growing .5% per year, down from 1.25% per year under Bill Clinton.
So, which candidate has proposed anything that would expand the number of Americans working? Both agree on spending more on infrastructure, but that will have modest effects on long-term growth. Beyond that, one striking feature of Trump’s immigration, healthcare and other proposals is their secondary effect of shrinking the number of people working in the U.S. economy.
To begin, Trump’s signature pledge to deport 8 to 11 million immigrants would reduce the workforce directly, for those caught and deported; and indirectly, by forcing millions to take cover outside the mainstream economy. Similarly, his promise to repeal Obamacare would increase the time that millions of Americans have to spend out of work for health reasons.
Nor should anyone believe that his $4.4 trillion to $5.7 trillion in tax cuts will somehow induce more people to work — that particular supply-side hokum is refuted by the rising labor participation rate (LPR) after Bill Clinton raised taxes, and the falling LPR after Bush II cut taxes.
By happy contrast, much of Hillary Clinton’s program would have secondary effects that increase the number of people in the labor force and working. Her path to legalization for immigrants will allow an additional eight million adult immigrants to participate fully and openly across the economy. Her plans to broadly expand access to child care and provide universal pre-K education would enable millions of parents to reenter the workforce or move from part-time to full-time jobs.
Moving along, her pledge to achieve universal healthcare coverage, once fulfilled, will lessen the number of people forced to stay home or even give up their jobs for health reasons. Her commitment to pay equity, once met, will encourage more women to enter the workforce or to increase their hours at work, as should her pledge to expand employment for 53 million American adults with disabilities. Finally, Hillary’s plans for expanding access to higher education will raise the labor participation rate, because that rate tends to rise with education.
The arithmetic of growth also depends on how fast productivity increases – and progress in productivity, which grew 2.8% per year in the later 1990s, has collapsed: From 2011 to 2015, productivity increased just 6% per year; and over the first half of this year, productivity actually fell at a rate of .6% per-year.
Three factors are mainly responsible. First, business investment in equipment and other technologies has slumped. In addition, the gap between the skills many workers have and the skills they need has widened. Finally, it appears that the development and use of new technologies, processes, and ways of organizing and running businesses — in a word, innovation — has slowed.
Here, too, Trump offers nothing. His huge tax cuts would balloon federal deficits, and so raise the cost for business borrowing to invest in new equipment and technologies. Trump also offers nothing to help workers improve their skills, and nothing to stimulate innovation and the broad use of new technologies.
By contrast again, Hillary’s agenda would actively promote progress in productivity. Her plans for tuition-free access to higher education will expand the skills of millions of young people, and her blueprint to reduce budget deficits will ensure that federal borrowing does not raise the cost for business borrowing to invest. Hillary also supports innovation by calling for expanded federal investments in basic R&D and promoting more public-private collaborations to commercialize that R&D. And since innovations often come from young enterprises, her program to expand bank lending for such companies is also well suited to promote innovation.
On economic growth, as on many other issues that will shape America over the next decade, Hillary delivers while Trump blusters.
This post was originally published on Dr. Shapiro's blog.
Debate season starts tonight, and many are writing about the questions they would like to see answered by the candidates. Here are the three I hope to see Donald Trump asked tonight, and put to other Republicans and their surrogates in the days ahead:
1. The Economy. You say things are worse today because of President Obama. Yet the employment rate and annual deficits are way down, the stock market is at record highs, the number of American without health insurance is at the lowest level ever recorded, and even median income is higher today than when Obama took office. Are Americans really worse off today?
2. Safety. You say Americans are less safe today. But compared to President Bush’s Presidency, only hundreds have been killed by terrorists not thousands; only thousands of Americans have been killed and wounded in war compared to tens of thousands; crime rates and the number of police killed in action are far below what we saw in the Bush years; and the net number of unauthorized immigrants coming into the country annually has plummeted from 400,000 a year to zero. What statistics can back up your claim that America isn’t safer today than during the Bush years?
3. Syria. Candidate Trump has blamed President Obama and Secretary for the Syrian civil war. Can you tell us how the war started, and what your plan is to end it? Feel free to discuss the role of Russia and Iran, and the regional sectarian struggle between Sunni and Shi’a, in your response.
So, yes, inferring from these questions I believe America is both better off and safer today. I am also anxious to hear GOPers continue to blame America for a war started and waged by Assad and his Russian allies, and for how they plan on bringing it to an end. No more secret plans please.
Our friends at Democracy Journal asked 18 of their contributors and allies to share their thoughts on the best way for Hillary Clinton to approach Donald Trump in their first debate. It is a thoughful feature, and well worth your time. Here is Simon's submission:
"Primary job in this first debate is to focus on telling your story. Make your case. Folks have their doubts about Trump, but they need to feel better about you. Smile, have fun, be optimistic and upbeat, talk about how great and good the country is, and how much better it can be.
Some time spent on political reform, how Washington itself will change during your tenure, would be welcome. And when he goes low, you go high. Do everything you can to ignore him, staying relentlessly focused on the people watching at home. He craves attention. Don’t give it to him."
“Monday Musings” is a new column looking at the 2016 elections published most Mondays. You can find previous editions here.
2016 Overview – Using our regular polling aggregator, Clinton leads this week 46/42. The race is clearly tightening, both across the country and in the 13 battleground states. This of course was to be suspected. Trump had been struggling for months to consolidate the Republican electorate, and is slowly, slowly doing so now. One should expect him to continue to do so until he is regularly polling at 45%. The question begs – can Clinton answer, regain some of the standing she’s lost in recent weeks, and put the race away?
To do so Clinton is now functionally running against three candidates – Trump, Johnson and Stein. Simply, if Clinton performs well at the debates, spends her time, particularly in the 1st debate, making her case, laying out her plans, conveying her optimism and can do spirit, she should be able to pull voters who’ve wandered over to Johnson and Stein. But the campaign would be wise now to start kicking around ways to create more excitement about this race for Democratic voters – inspirational videos, more Michelle Obama and Cory Booker, things that provide a lift and resist the deeply negative environment that I worry is indirectly suppressing our voters. We need more “for” to complement the very well articulated with hundreds of millions of dollars of the “against.” And count me in on the idea of having aging politicians lecturing voters why the vote for a Clinton alternative is “youthful” or a “waste” is itself a waste of time. Time now to focus on making our case. And as I wrote last week, we have a compelling case to make indeed.
On the new Democratic Coalition and turnout – In the last week we’ve seen a stream of stories about how Democratic voters are less enthusiastic about voting than Republicans, and emerging weaknesses with two of the pillars of the muscular new Democratic coalition, Hispanics and Millennials. Whether this is true or not is a bit hard to tell, but that is in some ways the point. Given how important this new electorate is to 2016 and the future of the Democratic Party, there shouldn’t be any confusion about what is going on with these voters at this point in the election cycle.
A decade ago NDN was among a handful of organizations and researchers who pointed out that American politics was in the process of going through a huge demographic transformation, one driven by the explosion of two emergent groups, Hispanics and Millennials. Perhaps more than any other organization in American politics NDN focused on these two groups in particular, capped by the major magazine piece Pete Leyden and I penned for Mother Jones in 2007 (yes prior to Obama winning in 2008). In our piece, and in the hundreds of presentations we’ve done on the subject, we argued that these demographic changes represented a big “opportunity” for Democrats if their politics could adapt to the sensibilities and the far different media consumption habits of these new potential voters. We do not and have never believed demography was destiny. It was an opportunity to be seized, and never guaranteed (Bush showed us this in 2000 and 2004).
In the last few elections we’ve seen the opportunity this emerging electorate offers, and the perils for Democrats in not getting it right. In part by surfing this demographic wave, Barack Obama received 53 and 51 percent of the vote in his two elections, the best showing for Democrats in back to back elections since 1940 and 1944. But at the same time, during this same period of historic success, we had two disastrous midterm elections. In a series of essays (here and here) and a major poll we did in the spring of 2010, NDN warned that these new voters were far less committed to voting in mid-terms and that left unaddressed we could see a very bad election ahead. My own view since 2010 has been simple: as Tip O’Neill said, we cannot expect someone’s vote unless we ask for it, and we just weren’t asking for the votes of this new electorate with the money and strategic intent we were with the rest of the electorate. This was a bit of an “old dogs new tricks problem,” and as Harry Reid says in today’s Washington Post, it is also expensive (and I would add hard, complicated and requiring the reinvention of the traditional 20th century campaign model).
So heading into 2016 it was conventional wisdom that a great deal of the Democratic Party’s success would ride on the ability to get this new Democratic Coalition (it is not Obama’s coalition, and I will leave that for another day) to be actively engaged in the election. This was particularly important, for given the growth of both Hispanics and Millennials, the electorate this year was projected to be about 2 percentage points more favorable to the Democratic nominee. Getting this part right, holding all other things equal, would make success far more likely.
Which was why I became loudly opposed to the Democratic debate schedule when it was first announced last summer. It was in many ways it was the exact opposite of what was required by the Party to address this strategic opportunity/challenge. Nothing was built in to appeal to Millennials, the Hispanic/Spanish part was TBD, and the choice of old school broadcast networks on the weekends was seemingly designed to create as few impressions with all voters as possible. Given the success of the Party and its 26 debates and highly competitive primary in 2008, it was hard to justify a big change in the debate strategy; it was impossible to justify the schedule the DNC committed to last summer. Look at the results: the GOP’s debates were seen by over 100m more people than the Democrats, an impression gap worth literally hundreds of millions if not billions of dollars. And we did nothing to address this core strategic challenge that we need to design and learn new ways to reach new audiences that are far more open to hearing from us than them.
The burden of re-inventing the 20th century broadcast model of American politics falls far more heavily on the Democrats, as our coalition is younger and has far more rapidly left the reach of a traditional 30 second spot. The DNC should have used these debates to have experimented with the model, bringing in new partners and models, showcased younger more diverse leaders, etc. Lots of things could have been tried, but instead we relied on media partners from the predigital age (incl PBS!!!!!!!!!!!) of media and few people watched. No Buzzfeed, Huffington Post, Snapchat, Twitch, Vice. Our clear message to this emerging electorate who remain episodic voters – our party is not speaking to you. It was one of the greatest mistakes by a major American political party in my lifetime.
Given the fear Democrats should have had about this new coalition not adequately showing up in 2016 literally everything the Party should have done these past two years should have been designed to engage these new audiences in new ways. And that’s why reading these articles – Spanish language ads starting 10 days ago (In May in 2012, March in 2004), the Millennial effort beginning today, no clear evidence of major Hispanic strategy at the DSCC – you just have to sit back and say WTF guys. Given both the promise and very real challenges of engaging the new electorate the only justifiable strategy would have been to spend more money and to have created more impressions (asking for their vote) than ever before.There is no strategic logic for less, particularly when there are as many as 20 million more Millennials and 4m more Hispanics in the electorate than in 2012.
In my mind, the Democratic Party had one truly significant strategic challenge this cycle – to have ensured that we had a tested, true and funded national strategy to ensure this emerging electorate did not underperform again. Sitting where I sit today, it is clear that we are not there yet. Democrats are still likely to win this year but man is it long past time for there to be a big national conversation about how are going to finally once and for all become the party of the digital age and this new electorate that offers us so much promise and opportunity.
P.S. Simon wrote about these matters extensively in his 2014 post-election memo, "A Wake Up Call For Democrats".
Simon Rosenberg's statement on Melania Trump's immigration letter:
“Without producing the actual visas or green card application this letter resolves nothing. If they have all the documents, then release them. It is the only way we can answer the fundamental question here which is whether Melania Trump followed immigration law. Failure to release them suggests that they are indeed hiding something, or the narrative they spelled out today is false. It also would have been far easier and quicker to release the actual documents then to have created an outside review. This letter is another case of “believe me” - which is clearly insufficient given that we are talking about possible criminal behavior by the potential First Lady of the United States.
There are additional problems with the letter:
Extraordinary Ability - The claim to have gotten an “extraordinary ability” green card seems improbable given this particular green card's requirements. They are intended for Nobel Laureates or others whose achievements are widely recognized as extraordinary in their field, not middling models. And the most important question remains unanswered by the letter– if she claimed to have a double degree from a university in her green card application she committed fraud, a crime against the United States Government which would put her entire green card/citizenship path becomes in doubt.
It should be noted that the lawyer who produced the letter today is also the one who said on the record in a recorded interview she received her green card through marriage. So one assumes he has recanted his previous public statement about her immigration path into the US.
Questions about the H1B - The reporting by Julia Ioffe and others that she had no regular employer and infrequent work in the late 1990s is again inconsistent with her having been granted a series of H1B visas, or suggests that there were misrepresentations and/or fraud in her applications. It is also not traditionally necessary to return to the home country to renew an H1B, once again calling into question her own recollection of how she lived and worked in the US in the late 1990s.
Finally, the claim that she was never in the US until Aug 1996 has obviously been contradicted by several different eyewitnesses and news accounts.
So, where are we? The letter was well executed and smart. But it resolves nothing. The only way to clear up the question of whether Melania Trump followed immigration law is by releasing her work visas, green card application and green card. Her refusal to do this implies guilt, and this whole episode should be treated as seriously as the Donald Trump’s coming appearance with Dr. Oz."
Additional Resources: Be sure to review Simon's tweets on the topic: here, here, and here as well as his piece, "4 Questions About Melania's Immigration Path Which Still Need Answers".
Overview – This report looks at the economic performance of the two American political parties when in the White House since the end of the Cold War. You can find the full report below, as an attachment.
We use 1989 as a starting point for comparison because when it comes to the American and global economies, the collapse of Communism and the non-aligned movement ushered in a new, truly global economic era, one very different from the one that came before. It is thus fair to see how the two parties have adapted to the enormous changes this new era has offered, and whether their policies have helped America prosper or struggle as we and the world changed.
As you will see from the following analysis, the contrast between the performance of the Democrats and Republicans in this new economic era is stark: 2 GOP Presidencies brought recessions, job loss, higher annual deficits, and struggle for workers; the 2 Democratic Presidencies brought recovery and growth, job and income gains, and lower annual deficits.
Based on these findings it is fair to assert that over the past generation the Democratic Party has been far more effective at crafting effective responses to a new economic era than the Republican Party. This case is bolstered, of course, when recalling the GOP’s spirited predictions of economic calamity when opposing both the 1993 Clinton economic plan and budget and the 2009/2010 Obama stimulus and “job-killing” Affordable Care Act.
The Republicans have gotten it wrong now in four consecutive Presidencies.
While it will not be the subject of this short report, our findings raise questions about whether the characterizations of the US economy as one not producing income and wage gains either over 40 years or over the past 15 years are accurate. It would appear that a more accurate description of the US economy in recent years is that with smart policies, Americans can prosper even in a more challenging and competitive global age.
Key Findings From The Report:
Job Growth: Over the Clinton and Obama Presidencies, more than 30m new net jobs were created. In contrast, during the two Bush Presidencies, approximately 3.5m jobs were created.
GDP Growth: Both Democratic Presidents saw the GDP rate rise during their Presidencies. The first President Bush saw GDP hold steady during his tenure. The second President Bush saw GDP decline.
Unemployment Rate: Both Democratic presidents saw more than a 3% point decrease in the unemployment rate during their terms. The Bushes saw increases in the unemployment rate by more than 2% and 3% points respectively.
Income: Both Bush Presidencies saw Americans experience decline in their median income, while during the Presidencies of Presidents Obama and Clinton Americans experienced gains. The newly reported 2015 increase in median income of almost $3,000 is the largest ever recorded since statistics began being kept in 1967.
Deficits: Both Democratic presidents saw dramatic improvements in the annual deficit during their tenures, with Clinton turning large structural deficits into annual surpluses and Obama cutting the annual deficit he inherited by one half. Both Bushes saw increases in the annual deficit on their watches, with the second President Bush seeing a more than ten-fold increase in the annual deficit during his presidency, one of the greatest explosions of debt in US history.
Public Opinion About the US Economy: Survey after survey finds Americans believing that things are far better, and improving. According to one new report, the President’s job approval on the economy stands at its highest mark since 2009. A new report from Gallup finds fully 80% of Americans are satisfied with their current standard of living.
Healthcare: The uninsured rate has plummeted, while the growth of health care costs – a significant driver of the US budget deficit – has slowed. Slower cost growth and healthier Americans are good for the American economy, businesses and the nation as a whole.
Energy: President Obama’s “all of the above” approach has a rousing success for the nation, increasing domestic production, lowering energy costs for American businesses, lessening our dependence on foreign sources of energy while giving the US a leg up on the new energy technologies of the future.
Again, you can find the full report, below, complete with lots of charts and graphs. Enjoy.
“Monday Musings” is a new column looking at the 2016 elections published most Mondays. You can find previous editions here.
2016 Overview – With fewer than 60 days to Election Day, according to our polling aggregate Clinton continues to hold a substantial 5 point lead in the race, 46-41. A few things to also note: 1) While Clinton retains this 5 point lead, a majority of public polls now have the race within 2 points. 2) Trump is still struggling to get out of the low 40s, and is only above 42% in a handful of either national or battleground state polls. 3) Clinton has successfully expanded the battleground to three new states – AZ, GA and NC. New polls from NBC this weekend should both AZ and GA to be a dead heat, and she leads in most North Carolina polls.
This last point is significant. A larger battleground allows the Clinton financial and organizational advantage to become magnified, as her resources – including powerful surrogates – are being deployed in more than just 10 states (the core battleground - CO, FL, IA, NV, PA, MI, NH, OH, WI, VA). This not only puts much more pressure on the under-resourced Trump operation, but it will mean more wins for Democrats down ballot in these additional states. For the Republican Party who has struggled so much at the national level in recent elections this expansion of the map is a very ominous development.
The move of Arizona into a pure toss up (two good polls out this week have the race dead even, Romney won by 9 pts in 2012) is one that should be particularly worrisome for the national GOP. For it means that soon Texas will start to be in play for Democrats, and not just statewide – Hispanics make up more than 15% of eligible voters in fully 15 Congressional seats held by Republicans in Texas, and 5 of those have more than 25% share. Dedicated, funded campaigns designed to get Hispanic turnout up in those districts could have a significant impact on the balance of power in the House in coming years. The last two public polls of Texas have Clinton up 1, and Trump up 6. Even assuming a 6 point spread, this is way way too close for the GOP to feel good about.
For those wondering about the state of play in the House, this Politico piece is well worth reading.
Trump and Putin – While Trump’s apparent admiration for Vladimir Putin has gotten a lot of attention of late, it is his embrace of Putin’s worldview that should be most alarming to Americans and to his fellow Republicans. Trump and his top supporters, including Governor Pence, have repeatedly praised Putin’s “strength,” admiring of his ability to prosecute his agenda on the world stage particularly in the Middlle East. But let’s look at that agenda a bit, and question whether it deserves praise and admiration.
In the Middle East, Putin is funding and protecting Syria's Assad, and is thus directly complicit in mass slaughter of civilians, the lengthening of the Civil War, and the massive refugee crisis in Europe that is doing so much to weaken establishment parties in Europe right now. Putin has also for years been Iran’s primary backer on the global stage, including at the UN. The ISIS insurgency is primarily a fight against the Iran/Shi’a aligned regimes in both Syrian and Iraq, and thus one could argue that it has been Russia more than any other global power who has been responsible for creating the conditions that have led to both the rise of Iran as a regional power and ISIS itself - something Trump blames Hillary Clinton for daily.
The distance between Putin's approach to the Middle East and the very public demonization of Iran we've heard from the GOP over the past few years could not be greater.
His “strength” has also led Putin to invade and occupy portions of a foreign neighbor, and like Trump, support Brexit, weakening of both Europe and NATO (see this piece for a longer discussion of this). His “strength” has also put him right in the middle of both the greatest sport cheating scandal in history, the FIFA scandal, and now the greatest Olympic cheating scandal in history. The level of cheating and corruption practiced by Russia on the global sports stage has no historic parallel, and is another sign of Putin’s utter contempt for a rules-based, international system.
Third, Putin is a leader of what has become the most pernicious political economy of the 21st century – the petro state. There is perhaps no system more antithetical to the American creed than petro states – unaccountable dictatorships, systems whose wealth and power is derived from mass pollution of the planet and the threat of global instability (which keeps oil prices high) rather than a commitment to the current global system.
Which brings me to my final point – that Trump, like Putin, has denigrated institutions and conventions which keep our democracy strong. He has broken from time honored bi-partisan tradition and refused to release his tax returns and his medical records, and has even failed to produce Melania’s basic immigration documents that he promised weeks ago.. He has refused to allow press to travel on his plane, and ended the traditiona of the “protective pool” that would travel with him at all times of day. He already said the election will be rigged and thus illegitimate, has encouraged the hacking of a major political party in the US by a foreign power to help disrupt our election and constantly calls the media and political elites dishonest and corrupt. He has questioned the efficacy of NATO and the European project, praised Brexit, and has said he will rip up trade agreements we have with other nations, violating international law and weakening the global trading system that has done so much to advance democratic capitalism around the world.
It would be one thing to praise Putin’s charm, but to praise his leadership and “strength” is praising a man who gets up every day fighting against time worn American values and the modern world we helped build. This is the very opposite of patriotism, and to me is the single most troubling manifestation of the new politics of Trump.
With nine weeks to go, the economic conditions for the election are set — modest growth, low inflation, and continuing job gains. A few Wall Street forecasters rate the odds of a 2016 recession at one-in-three; but unless a major shock wrenches the economy off its present course, bet with Janet Yellen and Ben Bernanke on the economic expansion continuing into next year.
The tougher question is what economic conditions will confront the new president and the rest of us in 2017 and 2018? Since the fourth quarter of 2015, the economy has grown at an annual rate of less than one percent, and business investment has declined at a three percent annual pace.
Consumer spending and home sales could lift growth and investment next year, if the healthy income growth of the last three years continues. But much of those income gains come from the unusually strong job growth of those years; and with unemployment now below five percent, job creation almost certainly will moderate soon.
If jobs gains lessen next year, healthy income gains will depend on a turnaround in the economy’s disappointing productivity record. A modern economy cannot stay strong indefinitely without strong productivity growth to fuel incomes, demand, profits, and investment. Its recent record explains our slow growth: Productivity gains averaged just .6 percent per year from 2011 to 2015, and even those small gains turned negative in the first half of 2016.
This represents a major change: Productivity increased at an average rate of 2.8 percent per year through Bill Clinton’s second term and remained strong at 2.6 percent per year from 2001 to the financial collapse in 2008. Moreover, it recovered quickly in 2009 and 2010, reaching 3.2 percent per year. Unless productivity recovers again in 2017, wages and incomes could stall and the economy could stagnate in the next President’s first or second year in office.
Yet, the economic debate this year has mainly focused on overall growth rather than productivity. Most economists — Ben Bernanke, Paul Krugman, Larry Summers and Kenneth Rogoff, among others — pin the slowdown in GDP growth on higher savings and the associated weaker spending. So, most economists have called for renewed fiscal stimulus here and for much of the world. They’re right; but the outlook for incomes and investment would be more encouraging if the fiscal stimulus focuses on recent meager, or even negative, productivity gains — and their impact on growth.
Americans are in luck — assuming the pollsters are right that Hillary Rodham Clinton will vanquish Donald Trump. While Clinton has not offered an explicit program to boost productivity, her economic and social policy proposals include the three essential elements of such a program. First, improve overall market conditions for all industries; second, promote innovation through the development and broad use of new technologies, materials, and ways of doing business; and third, give workers access to the skills they need to operate effectively in a more innovative economy.
The big play to improve the efficiency of all U.S. industries and businesses is Clinton’s commitment to expand public investments in infrastructure by $275 billion over five years. Unsurprisingly for Hillary, her program covers every conceivable form of infrastructure. There are new investments not only for roads, bridges, public transit, rail freight, airports, seaports, waterways, dams, and wastewater systems.
Her proposals also cover 21st century infrastructure networks, including a smart electric grid, advanced oil and gas pipeline systems, and universal access to 5G broadband and Next Generation wireless. Since virtually every enterprise and employee depends on these systems every day, her proposals should enable most firms and workers to carry out their business more efficiently.
As stimulus, these infrastructure improvements amount to $55 billion per year, or just three-tenths of one percent of GDP. Fortunately, Clinton’s program includes other measures that also should bolster productivity. To promote innovation, she pledges to scale up federal investments in basic research and development through the NSF, the NIH, the Energy Department and DARPA, across areas from high performance computing and green energy, to machine learning and genomics.
Always a pragmatist, Clinton also has plans to promote the commercialization of advances in R&D through grants for private accelerators and reforms to expand access to capital by the young businesses that play a prominent role in innovation.
Finally, Clinton has a serious program to help Americans upgrade their skills. Computer science training would be available for all high school students, and foreign-born students who complete a U.S. masters or Ph.D. degree in a STEM field would automatically receive green cards to stay and work in the United States.
However, the cornerstone is tuition-free access to public colleges and universities for all young people from families earning $125,000 or less, and tuition-free access to community colleges for anyone. To complete her productivity agenda, Clinton should expand her community college program and give all working adults the real ability to improve their skills, through no-cost access to two training courses per year at community colleges.
From the other side, Trump offers virtually nothing. He says that he, too, would increase federal spending on infrastructure. But his tax promises would balloon federal deficits by upwards of $700 billion per year, leaving no room to upgrade infrastructure, much less promote basic R&D or expand access to higher education and worker training.
His massive deficits also would crowd out business investments in new technologies and new enterprises. Trump’s program, in short, would virtually guarantee that the American economy stagnates, or worse.
This post was originally published on Dr. Shapiro's blog.