Reason Podcast

How Obama Killed Economic Growth—And Why Trump May Be Even Worse! [Reason Podcast]

Gene Epstein of Barron's explains why economic freedom is the best way to improve living standards and why trade barriers are Donald Trump's "worst idea."

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Reason.tv

As Barack Obama leaves the White House, his supporters point to low unemployment rates and low inflation as proof that his economic policies were a smashing success that saved the United States from another great depression.

Gene Epstein, columnist at Barron's and the author of Econospinning: How To Read Between the Lines when the Media Manipulate the Numbers, is having none of it. Pointing to historically low economic growth for the entirety of the 21st century, Epstein says, "I believe what explains the slowdown in economic growth since the year 2000—that is, under George W. Bush and Barack Obama—has been the fairly steady decline in the economic freedom index in the U.S. The bipartisan story in the '70s, '80s, and '90s is that economic freedom…generally rose. And those were eras of generally strong growth."

Since 2000, he stresses, Democrats and Republicans have "layered on" all sorts of restrictions on and interventions in economic activity, from major regulations such as Sarbanes-Oxley and Dodd-Frank to TARP bailouts (where bondholders were stiffed at the expense of labor unions) to massive borrowing. Every time the government intervenes or restricts economic freedom, says Epstein, market forces are dampened or frozen, resulting in less activity and innovation. As the United States drops in freedom (as defined by the Fraser Institute), it's no mystery why economic growth is shriveling up.

In a new Reason podcast, Epstein tells Nick Gillespie that he doesn't think Donald Trump will be much better, either. Despite deregulatory gestures in some areas (such as energy policy and finance), Trump is full-square in favor of trade protectionism and keeping immigrants out of the country. Free trade and a growing population, especially of immigrants who are ready, willing, and able to work and take economic risks, are vital to a flourishing economy, says Epstein. As important, he explains his (and Barron's) "prescription for U.S. economic growth" is built around cutting almost $9 trillion in planned government spending on the next decade.

Born in 1944 and raised in the New York area, Epstein talks about his early years as a socialist who worked for progressive economist Robert Heilbroner at The New School before encounters with the work of Noam Chomsky and Murray Rothbard turned him toward libertarian thinking on economic, foreign, and social policy.

Epstein also runs The Soho Forum, a monthly debate that meets in Manhattan's East Village. The next event takes place on January 17 and features Reason's Matt Welch debating Obama's presidential legacy with New York magazine's Jonathan Chait. For details, go here. In November, I debated economist Walter Block about whether libertarians should vote for Donald Trump (go here for a podcast of that).

Produced by Ian Keyser.

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  1. Fifth Column is better. There. I said it. *cringes waiting for attack from the Jacket

    1. Any podcast that’s produced with the assistance of alcoholic bevvies is entertaining. Even if you can’t figure out what the Hell the ‘cast is about.

      1. The Fifth Column is mostly about how much money Kmele Foster has.

        1. Wait, I thought the Fifth Column was about how Kmele Foster spends his vast fortune.

          1. We listen to the Fifth Column because we’re all waiting to hear Kmele do Blackcent.

            1. Kmele ain’t in no ways tard.

              1. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link,

                go? to tech tab for work detail,,,,,,, http://www.foxnews20.com

          2. Spoiler alert: mostly on Kanye West-endorsed swag.

        2. I enjoyed that Kmele shamelessly solicited donations in the last ep. He truly is a libertarian giant.

    2. They’re all beautiful in their own way.

    3. How can you just dismiss irrelevant 30 year old pop culture references that Dennis Miller would blush at?

  2. Trump says a lot of foolhardy and dangerous stuff but how on earth could he be worse than Obama?
    Even if he does half of his bs protectionist stuff and his insane trade war crap, he would still slow the train to hell for a while longer than more of obama’s and clonton’s sychosis. This is not a best of two evils argument. It is just a reach to say almost anyone on earth could be worse than Obama.

    1. Yeah, Obama brought us nationalized healthcare, remade the investment banks in his own image (mostly out of concern for executive pay), and renegotiated two separate trade agreements (with Colombia and South Korea) so that the terms were acceptable to the UAW specifically.

      “The [renegotiated South Korean Free Trade Agreement] was supported by Ford Motor Company, as well as the United Auto Workers, both of which had previously opposed the agreement. Remarking on the UAW’s support, an Obama administration official was quoted as saying, “It has been a long time since a union supported a trade agreement”

      http://tinyurl.com/zylv5ut

      I should add, in 2008, both Hillary Clinton and Barack Obama campaigned on opting out of NAFTA.

      http://www.factcheck.org/2008/…..afta-gate/

  3. Speaking of economic gloom, I just read an article that says that “Millennials are worse off than their Boomer Parents”.

    My first question: Do millennials have boomer parents or do they have Gen X parents?

    Second, for lulz, the article’s first example had a high paying job, but quit because long hours and stuff are hard.

    Andrea Ledesma spreads sauce on pizza dough at Classic Slice restaurant in Milwaukee. The 28-year-old has a four-year degree and quit a higher paying job because it made her miserable. Ledesma thought she would be making more at this point in her life and she’s not alone.

    And this:

    The generational gap is a central dilemma for the incoming presidency of Donald Trump, who essentially pledged a return to the prosperity of post-World War II America.

    Is this the media quietly admitting that under Obama, people are worse off than before?

    Median income for black millennials has fallen just 1.4 percent to $27,892. Latino millennials earn nearly 29 percent more than their boomer predecessors to $30,436

    Hmm, wonder why that is.

    1. The declining fortunes of millennials could impact boomers who are retired or on the cusp of retirement. Payroll taxes from millennials helps to finance the Social Security and Medicare benefits that many boomers receive ?

      THAT’S CALLED A PYRAMID SCHEME, BOYS!

    2. Hmm, wonder why that is.

      2nd or 3rd generations typically have more wealth than 1st generation immigrants?

      1. They’re supposed to, but the white kids aren’t? Hmm, wonder why that is.

    3. Unless a majority of millenials were born to teen parents or come from very large families they are the spawn of gillespie.

      1. Yeah, I guess so. I’m on the early end of Gen X so I could (I don’t, but I could) have a 30 yr old kid. If you were born in 1976 (late end of Gen X) you could have a 20 yr old kid– if you had a kid at 20.

      2. Actually I’m having some trouble with this. Most of my friends (gen x) had boomer parents. None of them had ‘greatest gen’ (wwii) parents.

        1. I’m an early millenial, born in 1987. Both my parents were boomers, born in 1949. I think that is outside of the norm though.

          1. I’m a gen-x/millennial cusp (early 1980) with 1934 and 1943-born parents, so I can vouch that generations are indeed odd.

  4. clonton’s sychosis

    Best FAKE! disease name EVAR!

    1. Getting rid of that uppity “p” is what makes it.

  5. fair trade vs free trade
    legal vs illegal immigrants

    you writers , pundits, intilectuals know that but continue to blur the lines which only harms your arguments and people begin to ignore you no matter how valid some parts may be just like we ignore CNN and the CIA.

    1. Is there anything better than righties whining about fair trade? I ask you.

      1. I don’t know, you incoherently babbling on and trying to join the conversation can be pretty entertaining.

        1. Oh snap.

  6. Free trade and a growing population, especially of immigrants who are ready, willing, and able to work and take economic risks, are vital to a flourishing economy, says Epstein.

    My Official Narrative meter is twitching at the “especially”. Why are immigrants who are ready, willing, etc. more of an economic driver than Americans who are ready, willing, etc.?

    1. Reason gives total short shrift to reducing the regulatory state here. The key to prosperity is not stopping the EPA and OSHA and the rest of the alphabet soup of federal agencies from making war on commerce. No, the key to prosperity is importing more low skilled labor from Mexico.

      They can’t possibly believe that nonsense. It just makes me think they are hacks doing the bidding of their donors.

      1. Increase that supply of labor so libertarians can get their lawn cut cheaper.

      2. It just makes me think they are hacks doing the bidding of their donors.

        Of course, being hacks not doing the bidding of the people robbed to pay their salaries would be fine.

        1. Oh Mary, you shouldn’t be so angry. You already incoherent but being angry just makes it worse.

      3. Epstein’s the one doing the real talking in the podcast. I haven’t been able to listen, but there’s multiple mentions in the article alone about regulation, so it seems you’re just looking to take jabs however you can.

        1. They mention regulation and then immediately talk about how immigration and free trade are more important.

      4. “No, the key to prosperity is importing more low skilled labor from Mexico.”

        I think there’s a lot of topic shifting on this issue. When we’re talking about Trump’s immigration policy, what exactly are we talking about?

        Question 1: Are we talking about staunching the flow of illegal immigrants?

        Question 2: Are we saying that 11 million illegal aliens needs to be rooted out and sent back home?

        Those are two different questions, but I keep seeing people talk about Question 1 as if it were Question 2.

      5. To be fair, there’s a lot of that on both sides. According to what I hear from the anti-immigration side, the key to prosperity is not stopping the EPA and OSHA and the rest of the alphabet soup of federal agencies from making war on commerce – not to mention repealing the regulatory train wreck that is Obamacare. No, the key to prosperity is cracking down on illegal immigration from Mexico, shutting down H1B visas and clamping off immigration in general.

    2. OK, treat for the office-comrades this afternoon.

      Fresh bottle of Quinta Ruban (Beekman Liquors was out of Lasanta 12 year old) sittin’ on the credenza!

      1. I wish you worked in my office. Excellent choice.

    3. Re: R C Dean,

      Why are immigrants who are ready, willing, etc. more of an economic driver than Americans who are ready, willing, etc.?

      Because Americans have families and friends they can mooch from when the going gets tough, so their incentives are much different than the incentives driving immigrants.

      There’s NOTHING special about the hardhatted “American Worker(TM)”, RC. It’s a mythical creature invented by protectionists to justify their predilection for targeted tariffs.

      1. Because Americans have families and friends they can mooch from when the going gets tough, so their incentives are much different than the incentives driving immigrants.

        Ah, so you are saying “Americans are lazy, although some, I’m sure, are good, hardworking people.”?

        1. Pretty much. There is the self selection factor though; unrelated to race, I imagine that people willing to jump the border to find work want jobs pretty badly and won’t make trouble about which bathroom their employer expects them to use (or whatever).

  7. Trump is going to be worse only if you think a few restrictions on trade and perhaps some significant restrictions on immigration will do more harm than the good that his reducing the regulatory state will do.

    Now it might be that Trump doesn’t make any headway in reducing the regulatory state but does manage to restrict immigration and engage in protectionism. In that case, he will be worse than Obama. That however seems unlikely. More likely is he uses his executive powers to make real reduction in the regulatory state but is unable to get much protectionism through Congress and does nothing on immigration beyond enforcing the law.

    Ultimately, it is really hard to see protectionism and immigration control as a bigger threat to the economy than the regulatory state. The regulatory state affects every part of our economy costs us conservatively two trillion dollars a year in economic growth. In contrast, the US exported 250 billion dollars in goods and services last year. Trump could destroy all of that through protectionism and still not come close to the damage done to the economy by the regulatory state. Of course Trump won’t do that. At most he will hit at the edges of exports and imports. And at most get rid of the worst excesses of the regulatory state. But when you consider the difference in size of the potential lost growth at stake between the two issues, he likely will do less harm with protectionism than he does good by reducing the regulatory state.

    1. Re: John,

      Trump is going to be worse only if you think a few restrictions on trade and perhaps some significant restrictions on immigration will do more harm than the good that his reducing the regulatory state will do.

      Because it’s an either/or thing to you, isn’t it?

      This is why we can’t have nice things. By the way, every time someone talks about “a few restrictions” here and there, I always compare that saying “raped, but just a little bit”, because the person seems not aware of the implications of what he or she is talking about.

      Ultimately, it is really hard to see protectionism and immigration control as a bigger threat to the economy than the regulatory state.

      Because if you can’t import the materials you need to produce and labor becomes more expensive all of a sudden, especially for things that do not require High School graduates, how in carnations do you think that is not at the very least as destructive as filling paperwork?

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      1. Pittance. That wouldn’t buy an askance glance from a hooker on Tverskaja Ulitca, much less one willing to soil a hotel bed.

        1. Doc,
          Glad you’re here, I’ve got some venison now. Do you remember where/when you posted your Borscht recipe?

          1. You do! YUMMY!

            I’ll look for it later, since I don’t have my personal bookmarks handy (still at office dictating, burning the midnight oil). My MIL’s recipe does call for reindeer meat, but any venison should do.

            You can also shoot me an email, since I do have a favour to ask of you…

            1. Email sent. I’m off Reason for today, the ice storm cometh in Illinois so I’m going home early. Later all.

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  10. Please print the transcript afterwards.

  11. Reason’s anti-Trump screeds are now so trite and formulaic that even the comments don’t redeem them.

    1. The same is true of your mother.

      1. Winston’s mom has classier comments.

    2. I don’t know why they just can’t tell the truth which is that Trump is going to be a mixed bag for Libertarians and that is likely to be better than the almost all bad that Obama was. You don’t have to have some unrealistically good view of Trump to admit he isn’t going to be all bad and will likely exceed the very low bar Obama has set.

      I know reason gets ripped on for leftist social signaling but sometimes they seem very determined to earn that criticism.

    3. You take your comment bashing somewhere else, sir. You have violated the n.a.p., I challenge you to a duel of your choice. *slaps Homple with a soft white glove and breaks out the Risk board in anticipation

      1. You made the challenge; I choose the weapons: Speed Parcheesi at dawn!

    4. I think they’re getting more objective about Trump all the time.

      Making fun of the emperor is always an appropriate thing for a libertarian to do–certainly in using ugly pictures of him.

      Poisoning the well is another matter.

      Trump is not the worst thing that could have happened to libertarians. If he signs a repeal of ObamaCare and signs a repeal of Dodd-Frank in his first 100 days in office, from a libertarian perspective, that will be a vastly superior outcome to anything we could have expected from Hillary Clinton.

      Also, the social justice warrior, politically correct version of the Red Scare coming to an end is a libertarian outcome–that Trump’s win represents. It used to be that if you said something stupid, they might make you sell your basketball team. But if you can say you hate marijuana more than the Klan and still be confirmed as Attorney General or that you like to grab women by the pussy and still be elected POTUS, then the PC police have been kicked off their perch.

      And that is a libertarian outcome on “free minds” grounds.

  12. homple’s right. and he’s not commenting on the comments.

    1. Yes. But he belittled the comments. Don’t get cute. *Drops gloves and picks up Risk

      1. I did not intend to belittle the comments. The comments are the best thing about Reason dot com.

        1. The tyranny of low expectations, indeed.

    2. Bacon is not afraid to stab you in the eye with wee little plastic men.

  13. Despite deregulatory gestures in some areas (such as energy policy and finance), Trump is full-square in favor of trade protectionism and keeping immigrants out of the country.

    Because ‘fair trade’ (the Marxist trope that somehow infected the Trumpista mind) and DEM IMMIGRUNTZ TAKUM ER JEBZ!

    It’s all so simple. Because Trumpistas are simpletons.

    1. It’s not being a simpleton to note that supply and demand applies to labor, too. Flooding the country with cheap labor will lower its price. This is basic economics. The “take our jerbs” trope is as simple-minded as the “trickle-down economics” sneer.

      In our welfare state, immigrants cost huge amounts of money. The data is out there, no time for links. In SF, I know we have immigrants in public housing, in public schools, using food stamps, and a lot of them in jail. It’s arguable whether their overall benefits exceed their overall costs. And even if they do, overall, there’s no reason to not have higher standards, and enforce current immigration law by kicking out the criminals and welfare cases.

      1. Re: PapayaSF,

        It’s not being a simpleton to note that supply and demand applies to labor, too.

        Yes, it is being a simpleton. Labor is not a single commodity.

        In our welfare state, immigrants cost huge amounts of money.

        That’s a lie. The only statistic thrown around by anti-immigrant zealots comes from a report by the Heritage Foundation which was shown to be seriously flawed by the CATO Institute, and another fraudulent report from the anti-immigrant Center for Immigration Studies. The highest consumers of welfare are actually the elderly. Immigrants make a miniscule part of the total welfare spend per year considering greencard holders are eligible only after 5 years or residence.

        there’s no reason to not have higher standards,

        What’s with this [implied] “we” business, Kemosabe? The previous attempts at “higher standards” by force gave us drug and alcohol prohibition, with the consequences that are perfectly known. This appeal to “legality” is nothing more than an intellectually dishonest cop-out.

        1. Yes, it is being a simpleton. Labor is not a single commodity.

          Still doesn’t mean it isn’t subject to supply and demand, just that different strata of the labor market tend to respond independently of other strata. Increasing supply in one strata will reduce price in that strata, even if it doesn’t affect price elsewhere.

          The highest consumers of welfare are actually the elderly.

          No kidding. We just don’t call it that.

          I vaguely recall that the usual argument on this is that the study on welfare use by illegals is “refuted” by data on welfare use by all immigrants.

          Here’s the other part of the immigrant/welfare nexus, though. A large pool of low-skill immigrant labor crowds out low-skill native labor, some of which, wait for it, winds up on welfare. To some extent, the size of the welfare pool reflects the oversupply of low-skill labor, and it doesn’t really matter, that much, whether the welfaristas were born here or came here.

          With that in mind, why would we want to grow the pool of low-skill labor?

  14. I agree with many of the comments above. Also note about Trump on trade: again, he is a negotiator. People act as if he is just itching to add tariffs. No, he is itching to negotiate better trade deals. Two different things. Granted, he does not have the distant, ideological libertarian perspective on free trade. He would not see the advantage of having an American factory close so that we can get cheaper Chinese spatulas. But I think that isn’t entirely stupid, and is certainly outweighed by his other plusses.

    The idea that we need an endless stream of cheap Third World labor to be prosperous is absurd. And Muslim immigration is just more work for the surveillance state.

    1. Re: PapayaSF,

      The idea that we need an endless stream of cheap Third World labor to be prosperous is absurd.

      It’s not about what “we” need, Kemosabe. It’s about what the MARKET needs.

      Most of those who use the pronoun “we” use it as a convenient cloak to cover their own prejudices. Yours is clear by how disdainfully you talk about “Third World labor”. It’s NOT up to you to decide which labor is adequate for employers. It’s THEIR money to spend, not yours.

      Mind your own business.

      1. I’m genuinely curious, OM. What, if any, restrictions on immigration would you support?

  15. In a new Reason podcast…he explains his (and Barron’s) “prescription for U.S. economic growth” is built around cutting almost $9 trillion in planned government spending on the next decade.

    Well, at least limited government ideals have gained a foothold in the younger generation of Trumps. We can only hope we live long enough to see him defeat Chelsea’s kid.

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