an extended meditation on presence (we also have chickens)
No, really.
In Naked Economics, Charles Wheelan lists several factors essential to the growth and development of a national economy:
(N.b. Wheelan also notes that "natural resources matter less than you might think.")
Naked Economics, Charles Wheelan
Trump seems hell bent on destroying every single one of them.
According to Wheelan (and to my own anecdotal experience), many people in developing countries envy U.S. bureaucracy. No, really. Our neutral, rules-based government institutions make it possible for us to do things like start a business without paying a dozen bribes or needing to be the uncle's cousin's roommate of the petty functionary standing in front of us.
Trump's stated, overt goal - and much of the "work" he and DOGE have done since he took office - is to undermine the effectiveness of government institutions. He wants his own puppets in place, so he can control these institutions. Bribes and nepotism, benefiting the Trumps, are inevitable consequences of this course of action.
Wheelan notes that property rights play an essential role in developing an economy for a number of reasons, not least of which is that a right to property includes a right to leverage that property. If I own my house, I can take out a HELOC or a home equity loan and use that cash to start a business. If I don't, I can't.
I can also benefit from any improvements I make to my property. If I buy a lot and build a house on it, for instance, I can sell that house and pocket the increase in value.
Many developing nations have millions or billions of people who have lived on a plot of land for generations, who have made substantial improvements to it, and yet who cannot get value out of it - because they don't "own" it. They don't have a right to the value they have created.
As a real estate mogul, Trump seems like the type who would defend property rights. When it comes to real estate, I suspect he largely will. However, Trump has already expressed an interest in weakening or eliminating intellectual property rights so as to advance generative AI and similar tools. If he'll come for intangible property when it suits him, he'll come for tangible property, too.
Wheelan points out that a government regulating badly is just as bad for a national economy as a government that doesn't regulate at all. Every regulation changes human behavior. That's why they exist. Excessive, unevenly enforced, and/or badly-planned regulations hinder economic growth.
Trump took office in part on promises to cut regulations. Which would imply he won't have this problem. But the problem of "excessive" regulation isn't just having too many; it's also putting them in the wrong places and enforcing them in unpredictable ways.
Trump's attempt to prohibit states from regulating generative AI, for instance, is an excessive regulation - especially in a nation whose systems depend on the "laboratory of democracy" approach to state power. He's not at all afraid to regulate excessively when it suits him.
To date, only one "developed" economy has emerged between the Tropic of Cancer and the Tropic of Capricorn - a fact my husband once pointed out after having lived in Ethiopia as a teacher for a while.
My husband thought it had to do with the weather. No need to invent insulation when it never gets below 70F, for instance. Wheelan points to a reason I find more realistic - the tropics breed all kinds of nasty diseases for both people and livestock. Large parts of Africa, for instance, never developed widespread livestock farming because the tsetse fly makes it nearly impossible to keep large numbers of domesticated animals.
Trump isn't planning to float the US down to the equator, as far as I know (though, please, nobody suggest it to him). However, his insistence that climate change is a "hoax," his gutting of climate-related regulations, and his EPA's efforts to amputate the agency's ability to regulate CO2 emissions all point to a man who does not care if the climate of the US heats rapidly - nor if that invites all the pests and diseases that hinder economic growth in hotter regions.
Wheelan spends an entire chapter explaining how open trade makes the entire world better off. Tl;dr free trade allows geographic localities to specialize on what they can do well or what they have available. We build cars in Detroit because that's where the auto plants are; we import coffee and mangoes because the US doesn't have good growing conditions for those crops (yet). And so on.
Just like my neighbor and I are both better off when I trade some of my zucchini for some of his sweet corn, nations are better off when they trade with one another. Protectionism has nasty effects both on a country's economic growth and on the health of its money supply.
...Do I even need to mention what Trump's been up to as far as trade goes?
Sure, protectionism plays well to voters who have seen themselves replaced. Yet most jobs in the US have been replaced by machines, not workers in other countries. Meanwhile, an embarrassment of riches in consumer goods and cheap remote-based services have flooded into the US. Everyone who supports the tariffs is about to see just how much the strength of our economy depends on international trade.
Related to "effective government institutions" and "no excessive regulation," responsible fiscal and monetary policy from experienced, disinterested, non-corrupt officials is a must for any country that wants its economy to do well.
As bad as the 2008 recession was, it could have been far worse. That's not just me talking. Ben Bernanke, who was Fed chair at the time, said the same thing - and the man is a scholar of the Great Depression, so he knew what he was talking about. Meanwhile, peek Zimbabwe, which had both a central bank and a currency so inflated that neighboring South Africa had to warn people not to flush Zimbabwean dollars down the toilets - since they were cheaper than toilet paper.
Merely having a central bank isn't enough. A country needs a responsible central bank setting policy based on sound principles, not the national emotion.
Enter Trump. His attempt to take over the Federal Reserve and his demand for significant interest rate cuts both undermine the US's ability to set responsible fiscal and monetary policy. The mere suggestion that Trump might stack the Fed board with his personal puppets have already had significant effects on the US bond market and the value of the dollar in global markets. If he succeeds, things will get worse.
These approaches also suggest a desire to weaken the dollar. Weakening the dollar relative to other currencies can produce some advantages, since it gets cheaper to export goods (China has been suspected of weakening the yuan on purpose for years). But weakening the world's reserve currency is going to get problematic fast.
"Human capital" is shorthand for "the people you have and the skills they can put to work." Developed countries have highly skilled people. Highly skilled people can not only put their own skills to work; they can network with other highly-skilled people to build new, innovative, complex things. Meanwhile, many developing nations cannot hold onto the human capital they do have - if high mortality rates don't get you, a lack of other highly skilled people with which to collaborate will make moving to a more developed country sound like a better idea. A broadly educated workforce makes for a more productive economy, full stop.
Trump rode into office on a promise to eliminate the US Department of Education, despite the department's essential contributions to human capital throughout the country. The "Big Beautiful Bill"'s changes to student loans will make it far harder for US students to go to college, which will also hurt our human capital. His immigration policies are likely to erode our available human capital as well.
If you want an economy to do well, you invest in its people. Trump is dis-investing from ours.
Democracy, says Wheelan, plays an essential role in developing an economy because it provides a counterbalance to the worst excesses of corrupt leadership. When the people have a say, they will only put up with so much in the way of expropriation of wealth or property before Shit Goes Down.
Which is, of course, why corrupt rich leaders with lots of property dislike democracy and seek to undermine it at every turn. Whether that's insisting elections are "rigged," trying to wrest the power to run elections from effective institutions, or pardoning insurrectionists, undermining democracy is absolutely something someone would do if they wanted to undermine an entire economy.
"War is bad," is how Wheelan puts it - for a lot of reasons. War destabilizes all of society, making it hard to plant crops or build a factory or open a shop. How are you supposed to plan for an economic future if everything you've built could be set on fire overnight? Paying for war is also expensive; continuing to fund pointless military actions has a way of inspiring leaders to fire up the money printer. Enter hyperinflation. ('Sup, Zimbabwe.)
War doesn't have to be with other countries, either. Wheelan notes that some of the most economy-destroying wars in recent history have been civil wars and internal police actions - situations in which a government continues to overrun its own country with its own military, whether or not that military is actually required to maintain peace or keep the economy running. (Somalia, for instance, managed to run an economy despite a near-constant presence from its own military through networks of personal and clan affiliation.)
Trump's new hobby of deploying the National Guard and/or the Marines to various US cities for no apparent reason falls into this category. It's destabilizing to internal peace. We don't need to blow up another country to undermine our own economy.
Failing to educate half your population and/or barring them from maximizing their economic productivity and opportunities is a bad idea, says Wheelan. And that's not just a personal preference: the data shows again and again that when women have access to both education and economic opportunities, a country's wealth grows.
In fact, women are so much better at managing money effectively, on average, that most small banks and microloan organizations prefer to loan to women. They know that if they give the woman of the household some money, she'll spend it on her business, on clothes and food for the kids, and on improving the house. Give the same money to men, and they tend to spend it on liquor and smokes. (No, really.)
For all he's a straight man, Trump pretty obviously loathes women. Sure, his administration has been light on policies targeting women specifically - so far. To date, they've stuck to policies that either harm women along with other groups (his anti-"DEI" approach) or that target subsets of women (like trans women). The administration's approach to reproductive rights is likely to undermine a lot of women's economic power, however. The more obsessed this administration gets with declining (White) population levels, the more likely it is to attempt policies that knock women out of the workforce.
You don't have to target women to undermine them. Fail to educate your entire workforce, or to provide broad economic opportunities, and you hit the half of your workforce with the better track record in education, productivity, and investment. It's inevitable.
Reading this list in Naked Economics gave me the chills. If I were tasked with undermining the economy of a developed nation, I'd hit it on every one of these points as fast and as hard as I could. I would, in short, do everything Trump is currently doing.
Either Trump is grossly ignorant of the consequences of these actions, grossly indifferent to those consequences, or intends them. All three could be ruinous for the United States as a nation - and as a concept.
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