By Mark Hemingway
Friday, May 25, 2018
In retrospect, there’s a really obvious reason Hillary
Clinton lost the 2016 election. Everyone was so focused on the drama
surrounding two larger-than-life candidates that no one paid enough attention
to what was once considered maybe the most fundamental indicator of success in
presidential elections. As Clinton’s own adviser James Carville memorably put
it: It’s the economy, stupid.
Obama was the first postwar president to never have a
single year of gross domestic product growth topping 3 percent. While Obama did
inherit a bad recession, after eight years and thousands of questionable
economic policies and regulations — including blowing through a trillion
dollars of taxpayer money dedicated to “economic stimulus” — the former
president has no one but himself to blame that the expected economic rebound
after the 2008 housing market crash was alarmingly anemic.
Hillary Clinton was the representative of the incumbent
party in the White House, and not only did she not promise a radically
different economic vision, she largely vowed to continue Obama’s legacy.
Analysts were also so busy deriding Trump’s message as demagogic and simplistic,
they rarely noticed he was relentlessly on-message about the economy.
This was not only good messaging, it was strategic. If
you’re looking at an electoral map, economically vulnerable voters in the
Midwest and Rust Belt who hadn’t particularly benefited from the transition
away from manufacturing to a global information economy were those most likely
to expand the map for Republicans. Sure enough, those same voters delivered a
decisive Electoral College victory to Trump after some news organizations laughably
forecast Clinton “has a 99 percent chance of winning.”
Trump’s Economy
versus Obama’s
Yet there’s been precious little reflection on the
economic failure of the Obama administration, especially in light of the
economic boom that has occurred since Trump took office. Fortunately, all this
is not lost on Andrew Puzder, the CEO of the Hardee’s and Carl’s Jr. fast food
chains, who has written a new book, The
Capitalist Comeback: The Trump Boom and the Left’s Plot to Stop It. Puzder,
you may recall, was also Trump’s nominee for secretary of labor before he
withdrew his name for consideration, but more on that later.
America’s center-left media and business establishment
are loathe to alternately credit Trump and blame Obama for the economy, but as
Puzder notes it was obvious almost immediately that the business sworld was
responding positively to Trump having his hand on the nation’s financial
tiller:
Literally from the day he was
elected, business confidence soared like a coiled spring let loose from its
restraints. The National Federation of Independent Businesses’ Small Business
Optimism Index ‘blasted off the day after the 2016 election and remained in the
stratosphere for all of 2017.’ By the year’s end, the NFIB Index reached the
highest monthly average in its history, exceeding the record year of 2004.
According to NFIB Chief Economist Bill Dunkelberg, ‘[w]e’ve been doing this
research for nearly half a century, longer than anyone else, and I’ve never
seen anything like 2017. The 2016 election was like a dam breaking. Small
business owners were waiting for better policies from Washington, suddenly they
got them, and the engine of the economy roared back to life.’
On election night, New
York Times columnist and Nobel Prize-winning economist Paul Krugman said
the stock market would never recover. Puzder, who had been a staunch supporter
of Trump during the election, notes in his book that the night of the election
he told the BBC he’d be buying into the market after Trump’s victory. The Dow
rose more in Trump’s first year in office than any other in its 121-year
history.
If anything, signs point to continued success. While the
Trump administration didn’t get the 3 percent GDP growth they were hoping for
last year, it was still a more than 50 percent increase over the anemic 1.5
percent of Obama’s final year. The GOP tax cut Trump signed into law last
December appears to be having very beneficial effects on employment and
business investment.
Puzder doesn’t stop at ticking off a few indicators. He makes
a pretty comprehensive economic case attributing the success thus far of
Trump’s economy to specific policies and political sentiments that represent
significant improvements over what the Obama administration did. If Puzder’s
book did nothing else, it would be a worthwhile contribution, considering how
little popular analysis has been done here.
It’s the
Regulation, Stupid
In reading The
Capitalist Comeback, it’s worth asking why Puzder was generally right about
Trump when so many of America’s increasingly politicized boardrooms made the
wrong political and economic calculation in 2016. Increasingly, American
business is defined and influenced by the outspoken visionaries of Silicon
Valley or Wall Street titans.
While these industries are impressive generators of
wealth, the tech and financial industries are increasingly downstream from the
immediate and practical effects of government meddling in the economy (or,
worse, they have entire lobbying shops dedicated to actually creating new
rent-seeking regulations designed to hamstring the competition). When you’re a
CEO in a more salt-of-the-earth industry such as fast food, you don’t have the
luxury of turning a blind eye to regulation.
It’s easy for Democratic politicians to propose feelgood
laws such as a $15 minimum wage or the requirement that anyone working more
than 35 hours a week must be given health insurance. But if you help employ
tens of thousands of entry-level workers, as Puzder does, you’re acutely
sensitive to payroll costs and understand all too well how regulatory
compliance often hurts workers in lost jobs.
As Puzder makes clear, “I believe it is important for
political leaders to hear from those of us who personally know the importance
of good jobs to working families, and who also know how government regulations
can discourage companies from creating jobs by making it against their economic
interests. I’d always been happy to support qualified candidates for office who
understood that.” This isn’t just a matter of protecting Puzder’s own
interests. It is well documented in Puzder’s book and elsewhere that needless
regulations cost American enterprise billions, and these regulations are
particularly costly for small businesses, which have historically been the
engines driving America’s economic growth.
Again, this is another reason Puzder makes the case that
supporting Trump was the smart move for American business. He cites a
Competitive Enterprise Institute study that concluded Trump is deregulating the
economy at a faster rate than any other president did.
“At a December 14, 2017 press briefing, Trump’s chief
regulatory officer, Neomi Rao, announced that for the 2017 fiscal year (which
ended in September), the Trump administration eliminated not just two but
twenty-two regulations for each new regulation that was issued,” Puzder notes.
The Political
Problem
Puzder evinces a surprisingly holistic grasp of
regulatory problems, which are ultimately a political, rather than economic,
problem. In observing why and how much the federal government is now meddling in
the affairs of private business, Puzder takes the book in a somewhat surprising
direction. He spends some time going through the political history of the last
100 years or so, and demonstrates how American conceptions of limited
government and constitutionalism have been undermined.
For professional political observers (ahem), some of this
feels like well-trodden ground. At other times Puzder exhibits a surprisingly
comprehensive insight into these matters, such as his discussion of the
negative impact of early-twentieth-century progressives. Puzder has clearly
educated himself, and besides, his target audience is likely not politicos.
In this respect, Puzder has done another valuable service
with The Capitalist Comeback. “Though
I have been a conservative since the 1980s (I voted for George McGovern on my
first trip to the ballot box), I am not, by nature, a ‘political’ person,”
Puzder writes early on in the book. “I preferred the business of business.”
The people most likely to benefit from Puzder’s book are
likely right-leaning businessmen and women, as well as local Republican
politicians and community leaders who, like Puzder, probably once thought they
could trust government authorities not to run the economy aground. By now it
should be abundantly obvious that they increasingly need to know how to make
arguments for limited government and its salutary contributions to the economy.
Puzder makes these arguments in an exemplary fashion, and
serves as a personal example. If he has the courage to start openly talking
about his beliefs in limited government, maybe more of America’s politically
conservative businessmen will come out of the closet and defend the need for
economic freedom. He persuasively argues that the time for courage on these
matters is now.
A Political
Vendetta
Speaking of courage, another aspect of this book
unrelated to economic matters might interest many people. Puzder was for a time
Trump’s nominee to be labor secretary, and he withdrew his name for the job
under a cloud of scandal. The media coverage of various Trump officials has
been overzealous and unfair, to put it mildly, and Puzder makes a good case
that what happened to him was no different.
Two basic matters sank his nomination. The first was that
Puzder had once employed a housekeeper who was an illegal immigrant. “I thought
that incident should have weighed in my favor, because once I realized her
immigration status, I discharged her and then offered to help her document her
status with the authorities,” Puzder writes. “In other words, over five years
before I had any thought of serving in public life, when it would have been
easy for me to ignore the unlawful status of a worker in my home, I acted when
that status came to light.”
Whether Puzder acted honorably or not proved irrelevant.
The media were obviously more interested in finding a way to present this as
hypocrisy, considering the hardline stances the Trump administration has taken
on immigration.
The second issue was more serious. Puzder’s ex-wife Lisa
accused him of abusing her in divorce proceedings decades ago. His ex-wife, who
he speaks glowingly of here, has since completely recanted the accusations and
says she was pressured into making them by her divorce lawyer. During his
nomination for labor secretary, she even wrote a letter to the Senate Committee
on Health, Education, Labor and Pensions overseeing his nomination, making all
of this clear and defending her ex-husband’s honor. In fact, she specifically
told the Senate committee her lawyer “was more interested in hurting Andy
because of a political vendetta than in representing [her] best interests.”
The source of that vendetta is also revealing about
Puzder’s character. “The ‘political vendetta’ Lisa referred to grew from my
involvement in the pro-life movement in St. Louis in the 1980s. As part of that
work, I had co-authored a law review article proposing pro-life legislation,
which Missouri adopted in 1986 as part of a larger bill,” he writes. “A St.
Louis–area abortion clinic challenged the law, and it was in the courts at the
time of our divorce. While Lisa supported my position on this issue, she had
hired an attorney whose wife worked at the clinic challenging the law. Lisa
admitted essentially the same thing to me in a 1991 letter after I had moved to
California.”
Again, exculpatory information didn’t matter. “Perhaps
the clearest example of media bias on the false and long-recanted abuse
allegations came after it was announced that I had withdrawn my nomination for
secretary of labor. A Politico reporter unabashedly tweeted that Politico’s
newsroom (which had regularly repeated the abuse allegations) broke out in
applause,” he writes. “The whole incident wounded Lisa deeply.”
Sound Opinions
It’s understandable that readers would approach this book
expecting to read about the political drama surrounding Puzder’s nomination,
and it’s difficult to begrudge Puzder the chance to tell his side of the story.
He also recounts other details about his nomination that provide some insight
into the tortuous aspects of entering into the political fray at the highest
levels. For instance, he amusingly recounts a series of meetings with
Democratic senators trying to sell them on his nomination.
In a nutshell, Bernie Sanders was convivial and
surprisingly receptive to Puzder’s attempts to find common ground on trade and
other issues. Al Franken started out their meeting needlessly cantankerous and
eventually warmed up to Puzder. Elizabeth Warren was incredibly condescending
and immune to acknowledging basic economic realities during their entire
interview. If you’re at all familiar with personalities on Capitol Hill, this
all sounds exactly right.
But if readers pick up Puzder’s book expecting to learn
about the drama of the Trump administration’s tumultuous first year, hopefully
they stick around long enough to hear what he has to say about economics and
politics. Puzder’s opinions are sound, his prior success testifies to his
capability, and his perspective on his unfortunate foray into politics even
shows some humility. In other words, Puzder is exactly the kind of businessman
politicians should listen to but don’t. We ignore him at our economic peril.
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