Donald Trump's Latest Economic Speech Was Another Muddled Mess

As usual, Donald Trump avoided specifics while talking a big game, making promises that experts say won't pan out.
August 8, 2016, 8:03pm

Donald Trump's much-ballyhooed speech on Monday was supposed to be a chance for him to flesh out the details of his plan to improve America's economy. It was also a chance for the alleged billionaire to get people talking about something other than his struggling campaign and to appear more presidential than he usually manages. So onstage at the Detroit Economic Club, Trump read from the teleprompter like a 70-year-old on his best behavior. Even when protesters interrupted him—over and over again, he simply made a few wisecracks and waited until they were escorted out.

But while it was billed as a substantive address, the speech oddly—but perhaps predictably—contained little, well, substance. Trump did announce that he was revising his proposed tax rates upward and would allow childcare to be tax deductible. But mostly, the speech was a mishmash of Republican boilerplate, vague promises Trump has made many times before, and statements that were outright misleading.

Take the childcare issue: Allowing people to deduct the cost of childcare—which generally amounts to hundreds of dollars a month—from their taxes seems like a decent way to help the working class. But poor people often don't make enough money to pay federal income taxes in the first place, making that deduction largely irrelevant to their bottom lines.

"A lot of people will not be able to make use of [the deduction]," William Gale, an economist at the Brookings Institution and co-chair of the Tax Policy Center, told VICE, "and the people who would are probably higher income."

According to Gale, a refundable tax credit, which would allow people to get reimbursed by the government for some or all of their childcare costs, would be a more effective way of easing the burden on working-class households. "[The Trump campaign] designed it as a deduction specifically because they don't want the benefits to go to lower-income people," he said.

Then there was Trump's claim that his Democratic opponent, Hillary Clinton, has explicitly said she would raise taxes on the middle class if elected. This apparently comes from a video in which it's not clear whether Clinton said "we are going to raise taxes on the middle class" or "we aren't going to raise taxes on the middle class." Both the transcript of her remarks and Clinton's stated policies make it pretty clear that she was saying "aren't." But Trump is apparently advancing the idea that Clinton is secretly out to screw over everyday Americans and revealed this insidious plot when she didn't properly enunciate a "nt."

In his speech Monday, Trump said he would cut taxes on middle-class Americans, but the scant specifics he gave about his tax plans seemed to make it clear that his reforms would be tilted in favor toward the wealthy. Most notably, he's in favor of abolishing the "death tax," a.k.a. the estate tax—a policy that would only alleviate the tax burden only for those making more than $5 million.

Trump also proposed a moratorium on all new financial regulations and promised to eliminate those existing regulations that "are not necessary, do not improve public safety, and which needlessly kill jobs." He didn't provide examples of any such regulations, or explain how lifting those regulations and cutting taxes—the GOP's longstanding solution to everything—would help workers in cities like Detroit, which have been ravaged by complicated decades-long economic trends having to do with globalization and new technologies, not just government policies.

"The forces determining the evolution of manufacturing are pretty powerful… the problem isn't taxes," said Gale. "Basically he's selling the notion that his tax plan is going to create a huge increase in growth, and it's just not."

Trump's appeal to everyday Americans rarely rooted in policy, though. As he headed into the home stretch of Monday's speech, he trotted out the same protectionist talking points that he's been using for months: China is breaking the rules and stealing American jobs; free trade is hurting regular workers; Trump will bring back old-fashioned jobs in the coal and steel industries; the country's low unemployment numbers are "one of the biggest hoaxes in American politics." The system, in other words, is rigged, and only Trump's cocktail of tariffs and tax breaks can unrig it.

The candidate also made sure to link his economic policies to the more red-meat rhetoric of his campaign: He emphasized that "without security, there can be no prosperity"; implied that money spent settling refugees could have gone toward infrastructure instead; and even found the time to mention crime, noting that "our police in this country are really unrecognized for the job they do."

The basic arc of the speech was the same one that Trump employs for virtually all of his campaign speeches: That real America—cops and steelworkers, every character in every Springsteen song, white people, pretty much—are being betrayed in favor of the Chinese, immigrants, and a global-banking elite. Even in a "serious" speech, he can't avoid the whiff of conspiracy, promising that "Americanism, not globalism, will be our new credo."

Trump did get the basic premise right. Detroit and lots of other parts of America are doing badly. But diagnosing rips in the country's fabric is not the same thing as mending them. And throwing tax cuts at a struggling economy, said Gale, isn't going to magically fix those problems. "If that were the case," Gale added, "we would have solved this a long time ago."

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