Economic Policy: Putting “Magic” in the Campaign

The Oct. 9 debate between the economic advisers to Trump and Clinton may have lacked allegations of sexual harassment, threats of jailing the opposing party’s nominee, and a television audience numbering in the tens of millions, but it did contain allegations of “magic” and plenty of wild hand gesticulations.

Early in the afternoon on Oct. 9, before the big ticket event of the night, top economic advisors from the Clinton and Trump campaigns held an opening act of sorts: a debate about economic policy and the state of the economy. Gene Sperling, who served as the Director of the National Economic Council under Presidents Bill Clinton and Barack Obama, represented the Clinton campaign, while Peter Navarro, a business professor at the University of California, Irvine, represented the Trump campaign. The debate was hosted by the Weidenbaum Center on the Economy, Government and Public Policy at Washington University in St. Louis.

The debate was certainly more civilized than the presidential and vice presidential debates that came before it. Both debaters generally respected the time limits set by moderator and professor of Economics Steve Fazzari, and the interlocutors refrained (for the most part) from interrupting one another. The debate also dove much deeper into substantive economic issues than either of the presidential debates. After each debater gave an opening statement, Professor Fazzari posed in-depth questions about international trade, entitlement programs, income inequality, financial regulation, and monetary policy.

However, the most striking aspect of the economic debate wasn’t the (relative) depth at which Navarro and Sperling explored the issues, but the extent to which their mannerisms and styles of debate mirrored those of the candidates they represented.

Navarro was loud, energetic and at times bombastic. He roamed the front of the room, accentuating his points with emphatic hand and body gestures. At times he took to the offensive, attacking Mr. Sperling’s service under Presidents Clinton and Obama. Throughout the afternoon, Navarro’s constant refrain was international trade. In his view, everything bad about the economy can be traced to either the trade deficit, “bad deals” such as NAFTA and the 2001 accord that brought China into the World Trade Organization, or both. Perhaps unsurprisingly, this is the same diagnosis that Trump makes to explain the “dreadful” state of the economy.

While Mr. Navarro’s analysis of the economy was quite unambiguous, the solutions he proposed were far less clear. On trade agreements, he claimed that “Trump will get a good deal for you,” and referenced Mr. Trump’s bestselling book about negotiations, The Art of the Deal. What exactly this “good deal” would look like went unexplained, although Navarro  did propose instituting a 30 to 45 percent protective tariff on imports that would purportedly protect American jobs from overseas competition.

The Trump campaign’s overall economic plan hews closely to the Ronald Reagan’s supply-side ideas. The overriding theme of Navarro’s pitch was that Trump is a change candidate. The economic adviser to the Republican nominee  promised that, if elected, Trump would cut taxes, slash regulations, open up the energy sector, and eliminate the trade deficit. Although Trump has pointed to his outsider status throughout the campaign, his proposal—at least in the way it was described by his top economic adviser—fits neatly within a conventional Republican supply-side economic agenda.

In contrast to Mr. Navarro and his high energy performance, Mr. Sperling was comparatively subdued; he remained behind his podium for the entire debate. Unlike Mr. Navarro, who focused on creating a narrative over specific details, Mr. Sperling took a much more wonkish approach. Throughout the debate, Mr. Sperling cited academic economists and well-respected think-tanks. His references included Emmanuel Saez and Thomas Piketty’s work on income inequality, Tax Policy Center analyses of each campaign’s economic proposals, and a Federal Reserve report authored by Ben Bernanke about the causes of the financial crisis. In this detail-centered approach, Mr. Sperling resembled Clinton, who is known for speaking at length about her specific policy ideas.

Mr. Sperling characterized Trump’s economic plans as “magic,” and stated that independent analysts predicted that Trump’s top-heavy tax cuts would add approximately $5.6 trillion to the deficit, while Clinton’s proposals would only add $200 billion. Mr. Sperling asserted that Trump’s plan relied on boosting economic growth as a panacea for all economic issues, but offered no concrete proposals to create that growth. According to Sperling, merely wishing for growth does nothing to make that growth a reality.

During the debate, Mr. Sperling laid out specific policy proposals on a wide variety of issues. He advocated for Clinton’s “College Compact” plan, and emphasized the importance of apprenticeships and certification programs as alternatives to four-year college degrees. He also supported an expansion of the scope of the Dodd-Frank financial sector regulations.

Clinton’s platform, according to Mr. Sperling, emphasizes investment in a wide variety of areas design to help the middle class. Mr. Sperling laid out plans to invest money in infrastructure, manufacturing and education, as well as a goal of raising the minimum wage. The intention of these initiatives, he said, is to both create jobs and boost wages in the short term, and to promote sustainable economic growth in the long term as the investments pay out dividends to society in terms of increased economic efficiency and a better educated workforce.

At the bottom line, the economic advisers’ debate, like the candidates themselves, came down to a stark difference in perspectives about the problems facing the economy. Each surrogate laid out the proper policy prescription he believed would make the economy work for as many people as possible.