Trump’s Faux Populist Budget

“Money On My Mind” is a monthly column by Jay Mandle. The views expressed here are those of the author (not necessarily those of Democracy Matters) and are meant to stimulate discussion.



April 2017
By Jay Mandle

Markets are essential to a functioning economy. They are needed to coordinate the production and sale of goods and services. But their outcomes are often socially undesirable. A clear case in this regard concerns environmental protection. The normal functioning of markets allows polluters to escape responsibility for and also to profit from the damage they cause. Preventing or correcting such damage requires governmental action. That intervention can reduce corporate profits and thus trigger opposition. But without market controls and regulations, our environment would be even more choked than it is today.

Donald Trump’s budget proposals represent a radical effort to remove and reduce desirable market interventions. As such, they make it unmistakably clear that his claim to be a populist is a fraud. His proposals serve the interests of the elites who benefit from unregulated market outcomes, while damaging the rest of us. Conspicuous in this regard are Trump’s proposed cuts to the Environmental Protection Agency. But even more revealing about his intentions are his proposals to totally eliminate less well-known agencies. These agencies, without exception, were designed to help precisely those people who are harmed by market outcomes.

Take for example the proposal to do away with the Appalachian Regional Commission. Its mandate is to promote economic growth and job creation in a region that has been hard hit by job loss. This Commission’s demise certainly cannot be justified by its cost. Its current budget allocation of $146 million is hardly worth mentioning in a federal budget of more than $1 trillion. Indeed, more resources –  not fewer –  would be needed to achieve the Commission’s ambitious goal of bringing Appalachia into the economic mainstream. This betrayal of the people in West Virginia and Kentucky who supported Trump in the presidential election is hard to exaggerate.

A similar indifference to the victims of unregulated markets characterize other proposed shutdowns. Among them are the United States Interagency Council on Homelessness, the Neighborhood Reinvestment Corporation, the Legal Services Corporation, the Corporation for National and Community Services, the Chemical Safety Board and the Delta Regional Authority. In each case what is at issue is the need for the government to act to correct market failures by providing homes and legal services for the poor, producing community and regional economic development, and providing safety from chemical poisoning. These however, are market corrections that Trump would eliminate.

What Trump is intending to do is to place us under more market domination than ever before. Nothing could be further removed from a populist agenda. Instead of using the political process to reduce the power that accrues to the wealthy in an unregulated market economy, Trump moves radically in the opposite direction.

As the opposition to Trump builds and spreads throughout the country, the question that will ultimately arise and have to be answered is what the movement stands for, aside from resistance? Whatever the response, it will have to be built on the basic principle that unregulated markets cannot be relied upon to serve the needs of most people. That movement must affirm the desirability of governmental action to correct market failures.

The difficulty is that doing so will be fought out in a political environment that itself has increasingly come to resemble the very institution that needs to be curbed: an unregulated market. Today, more than ever before, wealthy political donors can without limitations purchase the “services” of office holders.

A study of the impact of recent Supreme Court decisions illustrates the extent to which this has occurred. A Demos study estimates that $1.3 billion additional dollars of private donations flooded the political system because of the Supreme Court’s Citizens’ United decision. On top of that, the Court’s decision in McCutcheon produced an additional $274 million. As Demos reports, the elite donors who made these contributions moved the political system to the Right, since they are “more sympathetic to domestic spending cuts, more likely to oppose taking action to mitigate climate change and less supportive of the Affordable Care Act.” Thus it is that Trump feels free to dismantle market interventions. He is moving the process in the direction that the unregulated political market has already embarked upon.

And so it is that a real populism – one that seeks to curb the privileges of elites – to be successful will have to insist that the regulation of market outcomes also extend to the political process itself. Political donors should not be able to use their wealth to buy political results. Wealth should not be allowed to produce political power. On the contrary, politics should represent a sphere of equality, irrespective of wealth. Authentic populism, in short, requires the public financing of political campaigns.

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