Elizabeth Warren simply emulates Donald Trump on economic policy

Elizabeth Warren simply emulates Donald Trump on economic policy
© Greg Nash

When Elizabeth WarrenElizabeth Ann WarrenWarren adds her pronouns to Twitter bio Biden leads, Warren and Sanders tied for second in new poll The Hill's Morning Report: Trump walks back from 'send her back' chants MORE unveiled her economic development agenda for her presidential campaign, she received plaudits from center left outlets such as Salon, the American Prospect, and New York Magazine for beating Donald TrumpDonald John TrumpCould Donald Trump and Boris Johnson be this generation's Reagan-Thatcher? Merkel backs Democratic congresswomen over Trump How China's currency manipulation cheats America on trade MORE at his own game. That is certainly one way to describe what is essentially a rebranding of his current trade policy to suit a more liberal audience. Some elements of her proposal seem to need no rebranding. They could have been lifted straight out of a Trump campaign speech.

The title of her agenda is “Economic Patriotism,” fully synonymous with “America First.” Warren also sounds similar to Trump in her claim that economists understate the effect of trade with China on manufacturing job losses. Warren points to a research report by Susan Houseman, a scholar with the Upjohn Institute who has for years been arguing exactly this. Yet a Ball State University study has found that 88 percent of job losses are attributable to automation, responding directly to concerns.

Where Warren vastly differs from Trump is in how she assigns blame for manufacturing job losses. Where Trump blames poor trade deals and other nations taking advantage of us, Warren blames greedy corporations for offshoring factories and shipping jobs overseas. You have to know your audience. Both Warren and Trump make the mistake that many people who misunderstand trade make by thinking the goal of trade policy is maximizing exports and minimizing imports. Warren claims she would manage the dollar to boost exports and domestic manufacturing. She would also like to see a more active Export Import Bank, a government organization that has historically acted as a piggy bank for corporations.

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But this relies on the faulty logic that trade deficits are a useful metric for measuring a successful trade policy. Most economists agree that trade deficits do not hold back growth. In fact, trade deficits tend to increase in tandem with growth. Exports are pointed to as supporting millions of domestic jobs, but imports support domestic jobs as well. Just look no further than the tens of thousands of domestic jobs lost to recent tariffs as businesses are forced to pay for higher prices along their supply chains.

In the end, much of the economic philosophy of both Warren and Trump relies on attempting to solve economic problems that plague all major developed nations, while at the same time arguing that uniquely American mistakes caused those problems. If greedy corporations are to blame for manufacturing job declines, why are all the “socialist” European nations seeing the similar trends? By the same token, if we keep getting hung out to dry by bad trade deals, why are other developed nations not enjoying the fruits of American “follies” in terms of manufacturing job growth?

Warren would also like to force the federal government to buy only goods made in America. While this may sound good, it means more cronyistic federal contracts being handed to corporations with little need to fear accountability or competition, and billions of dollars of taxpayer money wasted. On top of all this, Warren proposes creating a new government agency she calls the Department of Economic Development. This agency would subsume the Department of Commerce and be responsible for all trade policy, including creating a national jobs strategy every four years.

Warren may like to believe that her trade policy is substantially different from that of Trump, but the underlying mercantilist logic is still there. Americans deserve to have their president promote trade as a positive influence on the economy rather than demonize trade as a scapegoat.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit focused on tax policy education and analysis.