politics

PART 3

That enthusiasm for an active state coexists with a more conventional Republican programme of lowering taxes, coupled with a belief that well-intentioned efforts to cut poverty usually backfire. afpi’s policy book talks of making permanent the tax cuts in the Tax Cuts and Jobs Act of 2017, some of which are due to expire in 2025. afpi’s policy wonks also advocate attaching work requirements to Medicaid (health insurance for the poor) and other government benefits. In Arkansas, the only state to have implemented work requirements for Medicaid, a quarter of those enrolled in the programme lost their health insurance and there was no noticeable increase in employment. The reforms would at least save some money, but not enough to have much impact on the federal deficit.

Expensive industrial policy, lower taxes and only small reductions in benefits—in other words, less revenue and more spending—would not balance the books, much less trim government debts or refill the funds that pay for Medicare (subsidised health insurance for the disabled and the old) and Social Security (the state pension), which are due to run dry in the early 2030s. On past evidence the bond market is likely to continue to finance the growing gap between the government’s income and expenditure. Investors might become nervous, however, if the Federal Reserve’s independence were in question. Some Trumpists think it should be, since they do not like to cede so much power to unelected bureaucrats. That is a minority view, Mr Vought concedes, but could gain ground: “I guarantee that if that debate was in front of President Trump, that he wouldn’t just throw you out of the Oval Office.”

Another area in which a second Trump term could bend the arc of history is in environmental policy. In his first term emissions of greenhouse gases kept falling, even though he reversed many of Barack Obama’s policies to slow climate change. Investors assumed that government policy would soon revert to a greener norm and coal-fired power stations have lifespans of several decades, so the administration’s fondness for them was not enough to get new ones built. In this respect, too, a second Trump administration would be more methodical and better organised.

Whatever satisfies the soul is truth afpi’s policy book talks about ending “the war on fossil fuels” and makes untethered assumptions about how much bigger the economy would be without it. (afpi estimates that America’s gdp will be 6% smaller by the end of this decade than it would have been without the Obama administration’s emissions-reductions targets.) The argument is presented in both pragmatic and moral terms. Why should American oil stay in the ground while Saudi oil flows? And why should the use of fuels which can bring so much prosperity to so many be circumscribed? Never mind that Mr Biden’s administration has granted more permits to drill than Mr Trump’s did, that America is the world’s largest producer of oil or that it is in the national interest to limit global warming.

America Firsters like oil, gas and coal and the relatively well-paid, manly jobs for high-school graduates they bring. They are also opposed to the green transition, which they see as unnecessary government meddling that raises energy prices for ordinary Americans. Both Kevin Roberts, who runs Heritage, and Mrs Rollins, who started afpi, used to be senior figures at the Texas Public Policy Foundation (tppf), a think-tank which opposes the development of wind farms and solar plants.

Over a quarter of Texas’s electricity is generated by renewables, and tppf has helped to propagate the idea that this makes the state’s power grid unstable. Investors in renewables say Texas’s electricity regulator has become hostile to new projects. tppf, meanwhile, is battling renewables as far afield as New York, Rhode Island and Massachusetts, where it has initiated a lawsuit against a big offshore wind farm on behalf of fishermen. If the federal Environmental Protection Agency and Justice Department were run by people who shared these instincts, investors in renewables would face the same sort of political risks as owners of coal plants.

A third area which is likely to see great upheaval if Mr Trump becomes president again is foreign policy. Among America First types, there is deep disagreement about Ukraine. afpi’s policy book talks about facing the threat from Russia. Yet Mr Bannon says, “I don’t give a shit about Ukraine—what I give a shit about is the invasion of America’s southern border.” Mr Vought makes the same point in a more wonkish way: “Ukraine is being subsidised by our taxpayers to fight and not make strategic calculations that they would otherwise make if we weren’t subsidising it. And it’s not in our interest to subsidise that conflict.” Mr Trump himself says he would end the war. He may not be able to do that. But Ukraine and its other allies ought to take seriously the possibility that America may no longer be with them in 18 months.

Policy towards China is less contested. The Trump administration was more confrontational towards China than any of its predecessors. The Biden administration has continued in the same vein, albeit with less inflammatory rhetoric and more considered policies. “The difference between the Biden administration and the Trump administration on protectionism is that the Biden administration is competent,” says Dan Drezner of Tufts University. A second Trump term would be more likely to build on what the Biden team have done rather than, say, loosening export controls.

Heritage’s plan for 2025 foresees an immediate ban on TikTok and also on Confucius Institutes. American pension funds would be encouraged to divest from “problematic” Chinese entities. The government should be prepared “to employ punitive policy measures” to prevent American investment in sensitive areas in China and Chinese investment in America. American companies considering large-scale investments in anything deemed critical would have to submit information about counterparties and anticipated use of funds to the us government before investing, “under a presumption of denial”.

Whether Mr Trump would authorise the use of force if China were to invade Taiwan is hard to say. Some who worked in his administration note that whenever they were about to adopt tougher policies on China, the bosses of big American firms would call the White House and tell him that the move would alarm financial markets and he would back down. The same dynamic may apply in a second term. In a memoir of his time as Mr Trump’s national security adviser, John Bolton suggests the former president was not really committed to Taiwan’s security. Others claim he would be “stronger” than Mr Biden.

Other allies could expect the same peremptory treatment as in Mr Trump’s first term. He reportedly told aides he wanted to leave nato. Even afpi, which on foreign policy is closer to the old Republican orthodoxy, thinks that military support should be withdrawn from countries that do not spend at least 2% of gdp on defence, a level that neither Japan nor most countries in nato meet. The modern America First movement, like its namesake during the second world war, contains some true isolationists. But it also contains an influential clutch of people like Elbridge Colby, who served in the Department of Defence and believes in a muscular foreign policy. He thinks China is such a threat that America should pull back from its defence commitments in Europe and the Middle East to concentrate on the Pacific.

No matter how well-laid the plans for a second Trump term, nor how thoroughly vetted the people carrying them out, Mr Trump would still be in charge, which means there is a limit to how methodical it could be. But it would be altogether more formidable than the version of 2017-21. As for the candidate himself, he is aware of the plans being made on his behalf but has never been excited by the details of public policy. For the professional wonks in the movement, that is an opportunity.

“The Economist doesn’t think that populists can govern, right?” asks Mr Vought. “We believe we’re trying to be an answer to that viewpoint. So we’re trying to look systemically: how does someone who has an American First perspective, a populist perspective, govern credibly and effectively? Because they know the inner workings of government so well.” The winner of next year’s presidential election will be sworn in in 18 months. The institutions of the new right expect it to be Mr Trump, and this time they will be prepared.