Quote:The basics of the U.S. economic debate are really very simple. The federal government, as often noted, is an insurance company with an army: aside from defense, its spending is dominated by Social Security, Medicare and Medicaid (plus some ACA subsidies). Conservatives always claim that they want to make government smaller. But that means cutting these programs — and what we know now, after the repeal debacle, is that people like all these programs, even the means-tested programs like Medicaid. Obama paid a large temporary price for making Medicaid/ACA bigger, paid for with taxes on the wealthy, but now that it’s in place, voters hate the idea of taking it away.

So what’s a tax-cutter to do? His agenda is fundamentally unpopular; how can it be sold? One long-standing answer is to muddy the waters, and make elections about white resentment. That’s been the strategy since Nixon, and Trump turned the dial up to 11. And they’ve won a lot of elections — but never had the political capital to reverse the welfare state. Another strategy is to invoke voodoo: to claim that taxes can be cut without spending cuts, because miracles will happen. That has sometimes worked as a political strategy, but overall it seems to have lost its punch. Kansas is a cautionary tale; and under Obama federal taxes on the top 1 percent basically went back up to pre-Reagan levels.

So what did Trump seem to offer that was new? First, during the campaign he combined racist appeals with claims that he wouldn’t cut the safety net. This sounded as if he was offering a kind of herrenvolk welfare state: all the benefits you expect, but only for your kind of people. Second, he offered economic nationalism: we were going to beat up on the Chinese, the Mexicans, somebody, make the Europeans pay tribute for defense, and that would provide the money for so much winning, you’d get tired of winning. Economic nonsense, but some voters believed it.

Where are we now? The herrenvolk welfare state never materialized, in part because Trump is too lazy to understand policy at all, and outsourced health care to the usual suspects. So Trumpcare turned out to be the same old Republican thing: slash benefits for the vulnerable to cut taxes for the rich. And it was desperately unpopular.

Meanwhile, things have moved very slowly on the economic nationalism front — partly because a bit of reality struck, as export industries realized what was at stake and retailers and others balked at the notion of new import taxes. But also, there were very few actual voices for that policy with Trump’s ear — mainly Bannon, as far as I can tell.

Quote:For years, China manipulated its currency to give its exporters an advantage over foreign competition. It demanded foreign companies turn over technology to access China's vast market, and its firms rampantly stole the intellectual property of foreign companies. Government subsidies and cheap loans encouraged Chinese factories to overproduce steel, aluminum and other products, driving down global prices and putting U.S. and other firms out of business. But Washington hasn't ignored violations. The Obama administration, for instance, filed 16 WTO cases against China. The U.S. has almost completely blocked steel imports from China. The Peterson Institute for International Economics found in a report this year that more than 9 percent of Chinese imports face trade barriers in the United States, versus less than 4 percent of overall imports. And China stopped manipulating its currency a few years ago.

Quote:Mr Bannon talks about economic nationalism as the antithesis of “globalism”, which he characterises as a governing creed which has put the economic interests of multinational firms and a wealthy international elite above those of ordinary working class Americans.

Quote:Economic nationalism should be understood as a set of practices to create, bolster and protect national economies in the context of world markets. The rise and institutionalisation of economic nationalism in the 20th century was a product of economic crisis, nationalist movements and enlarged states.