Economy & Business

Honest Politicians Finish Last

(Reuters photo: Jonathan Ernst)
You’ll never get elected by telling the truth about economics.

On February 1, 2016, Senator Ted Cruz (R., Texas) won the Iowa caucuses. That came as a bit of a shock to the political establishment, given that Cruz had not only touched the third rail of Iowa politics, he had grabbed it with both hands: Cruz openly trashed ethanol subsidies, payoffs to corn growers for the boondoggle of the corn-based fuel. Donald Trump, the second-place finisher, launched into one of his trademark rants: “He will destroy your ethanol business 100 percent — 100 percent. . . . Your ethanol business, if Ted Cruz gets in, will be wiped out within six months to a year, it’s going to be gone. . . . The ethanol folks like Trump, I’ve been consistent, I’ve been solid, I’m a supporter and will always be a supporter.”

Cruz had his moment, but Trump, of course, went on to win the nomination and then dominate Hillary Clinton in Iowa, winning a state Mitt Romney lost to Barack Obama by nearly 10 percent of the vote.

Trump also saw great success in the Rust Belt states, where he preached the false gospel of protectionism. “We’re being killed on trade — absolutely destroyed,” Trump repeatedly stated during the campaign. He explained, “Our politicians have aggressively pursued a policy of globalization, moving our jobs, our wealth, and our factories to Mexico and overseas.”

He hasn’t changed his tune after his election. In the aftermath of this victory, Trump blamed supposedly nasty companies for shipping jobs overseas; he called Rexnord of Indiana “vicious” for outsourcing. He pledged, “We’re gonna have a lot of phone calls made to companies when they say they’re thinking about leaving this country, because they’re not leaving this country. . . . They’re not gonna leave this country, and the workers are gonna keep their jobs.”

Meanwhile, Democrats continue to promote the idea that they’ll bring jobs back to hard-hit industries by raising taxes and redistributing income. Bernie Sanders won millions of acolytes while lying about basic economics, suggesting that greedy billionaires were bilking the working classes: “You can’t continue sending our jobs to China while millions are looking for work. You can’t hide your profits in the Cayman Islands and other tax havens, while there are massive unmet needs on every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America, if you refuse to accept your responsibilities as Americans.”

So here’s the question: Is it possible to have political success in America without blatantly lying to voters?

Because make no mistake: Both Trump and Sanders succeeded by lying about economics. Manufacturing employment hasn’t dipped in the United States because of trade — it’s dipped because of technology, and the jobs that Trump and Sanders promised to bring back won’t be coming back through government interventionism. Since 1994, manufacturing output has skyrocketed, but manufacturing jobs have leveled off — thanks to technology. Between 2006 and 2013, American manufacturing production jumped 17.6 percent. China, the nation supposedly crippling our manufacturing sector by stealing our jobs, has actually lost jobs in its manufacturing sector owing to technology in recent years. And most of the automotive jobs being created in Mexico aren’t coming from the United States — they’re coming from foreign automakers who would rather invest in Mexican workers than American ones, thanks to America’s trade policies.

Make no mistake: Both Trump and Sanders succeeded by lying about economics.

America’s not losing manufacturing jobs owing to trade deficits, either. Trade deficits actually have no correlation with economic success in a global marketplace: If a country like China takes in more U.S. currency as a result of manufacturing investment, for example, it can’t exactly spend U.S. dollars at home, so it has to reinvest in more productive American sectors. This is called a capital-account surplus.

If you’re actually concerned about American manufacturing, what’s the best way to grow that sector? By removing regulation. As Clark Judge wrote in the Wall Street Journal this week, “a new analysis confirms that the average industry’s regulatory risk has increased nearly 80 percent from 2010 — and that this burden particularly hurts manufacturing and small industry.”

To Trump’s credit, he has talked about removing unnecessary regulations. But he’s spent far more time demagoguing trade and businesspeople. There’s a reason for that: The easiest way to make political hay is to craft a narrative in which evil villains attempt to harm innocent victims out of pure malice. “Globalist” politicians attempting to screw hard-working union members in Michigan is an easier sell than fusty bureaucrats overreaching with emissions regulations and hurting factory margins. It doesn’t seem to matter that the first narrative is false and the second is true. It only matters that the first narrative has a clear moral line, and the second is a bit more blurry.

So the question becomes whether any politician can win without lying about economics. Only politicians with nothing left to lose will tell the truth about economics: In 2008 Barack Obama took the line that the government could stimulate manufacturing through redistribution, but in 2016 he admitted, “Some of those jobs of the past are just not going to come back.” What changed? This year he didn’t have to pay a political price for telling the truth.

#related#Here’s the problem: If politicians can win only by lying, they’ll continue to lie. But reality will remain reality. Manufacturing jobs will continue to disappear, and tariffs and regulations won’t make them come back. And free trade will continue to enrich rather than impoverish, no matter what Trump or Sanders says. Good politics may be bad policy, and Americans will pay the price.

Which means that we need a better class of voter and a better class of politician. We need voters who are capable of demanding something beyond pandering — who are willing to hear uncomfortable truths. And we need politicians willing to educate, not merely to pander. Most Americans don’t know much about basic economics. But politicians, who spend their lives investigating policy, should. And it’s a betrayal of public responsibility to tell Americans what they want to hear simply to win votes, knowing that those Americans will pay the price for the bad policies politicians urge them to embrace.

Mr. Shapiro is the host of the podcast The Ben Shapiro Show, the editor emeritus of The Daily Wire, and the author of How to Destroy America in Three Easy Steps and The Right Side of History.


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