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Economic counselors for each candidate hold a debate and (almost) resort to personal attack
Before the candidates took to the stage last night, their economic counselors—Gene Sperling for Hillary Clinton’s campaign and Peter Navarro for Donald Trump’s campaign—participated in a debate of their own. It promised to be a policy-focused, disciplined discussion moderated by Washington University economics professor Steven Fazzari. For the most part, it was.
If anyone was committing a personal attack, it was Navarro on Sperling, accusing him of poor policy decisions through his involvement with negotiations to incorporate China into the World Trade Organization. At the same time, however, Sperling was accused of going over the allotted time limit on several questions in a row—and so, on the question of which candidate further abided by expected debate protocol, it was easily a draw. Here are some of the highlights:
Economic platforms in a nutshell
Trump plans to cut taxes (especially for the top tier), reduce the government’s “regulatory burden,” focus on energy sources at home (oil, natural gas and coal) and renegotiate trade deals, cracking down on China specifically to enforce barriers against sweatshops, cheap labor, high tariffs and environmental violations.
Clinton plans to increase taxes for the wealthy, boost government spending to redistribute benefits to the middle class, provide paid family leave and expand social security.
A general theme of the debate: Navarro asserts Trump’s promise of 3.5 percent growth, and Sperling sarcastically claims that the Trump/Navarro plan is simply magical—in fact, he says, “Why not throw in 6-pack abs for me and a World Series win for the Detroit Tiger, while you’re at it?”
Trade
“You could ask Peter about the weather, and he’d tell you about trade,” Sperling said, after Navarro used a hard-hitting question on income inequality to talk about trade, blaming practically every economic issue facing our nation on “bad, bad trade deals.” It’s notable that trade is a recognized weak spot in Clinton’s foreign policy experience, as well as her current proposal.
The issue is that we have an $800 million trade deficit at the moment, which can be traced to a range of factors including other countries’ high import tariffs, cheap labor costs and rampant violation of environmental standards. Navarro calls the U.S. trade deal with China and China’s entry into the World Trade Organization examples of “gross incompetence.” We’ve given China “Most Favored Nation Status,” which means we get their exports for their lowest tariff and vice versa—the only issue being that our lowest tariff is 2 percent and theirs is 30 percent, which means we suffer from the agreement disproportionately. Navarro also points out losses from NAFTA, noting investment by large manufacturing companies in “Mexico instead of Michigan” as the issue at hand.
In an attempt to crack down on this type of unfair policy and bring jobs back to American soil, Trump proposes new trade deals all around. These are seen as both highly necessary by those who fear that America’s currently lax trade policies have caused the country to lose global predominance and highly controversial by others for their proposed efforts to reduce imports to zero.
Sperling counters well: he recognizes that we’ve been lax on China and notes Clinton’s determination to crack down, while calling out the danger in the above plan. If we decide to slap on a crazy high tariff (estimates in Trump’s plan range from 30-45 percent) in an effort to regain American status, we will eliminate imports—a plan Sperling claims “wouldn’t even earn you a B in a macroeconomics class.”
Education
Sperling was nice and comfortable on this one. It’s right in Clinton’s platform to expand lower and middle-class students’ opportunities to get a four-year college education (and she is generally seeking debt-free college across the board). The plan will work through a “College Compact,” whereby states and universities will receive funds directly from the federal government—a $500 billion investment (but at least this shows where her priorities lie).
Navarro’s thoughts on the matter? Well, we don’t all have to go to college in the first place. But besides that, the (hopefully not valid) reasoning that we will all “end up jobless in [Bernie Sanders’] basement anyway.” Unfortunate Sanders comment notwithstanding, Navarro’s focus was on the mismatch between the multiplicity of skills we gain as college students and the lack of opportunities available for employment post-graduation. While the reference to the benefits of vocational school in Germany may have resonated in a theoretical sense, the audience at the debate, comprised primarily of Wash. U. students, was simply not amused by the indifference shown toward the $60,000+-a-year choice we’ve made in attending a four-year institution to further our prospective career goals.
2008 economic crisis
The question for the candidates focused on the degree of government intervention in markets that should be applied to prevent a situation of excessive lending like the one we witnessed in 2008. While Sperling maintained the traditional democratic stance in his desire to maintain the Dodd-Frank Act, a law that allows for increased financial regulation by the federal government, Navarro argued for its repeal.
The debate on the subject also revolved around the degree of blame we might impose on the Community Reinvestment Act (CRA), which was intended to assist low-income minority individuals in securing housing. While Navarro was quick to blame the CRA, noting a potential credibility issue on the Clinton side, Sperling repeated a related statistic in opposition: The CRA only accounted for one in four subprime mortgages provided during the months leading up to the crash.
Along with differing opinions on who allowed the loan portfolio expansion of Fannie Mae and Freddie Mac (mortgage financiers who have since been taken under the wing of the federal government), Sperling was the one who proposed a solution: more power to regulators to break up banks that are “too big to fail” and eliminate individuals who are “too powerful to jail.”
Although Sperling honed in on Navarro’s personal attacks toward the end, putting himself on a high horse in avoiding the fight back, the debate generally stayed focused on policy questions—to a degree relatively unknown in this election year’s presidential debates. Whether Navarro’s plan, noted as pure “magic” by Sperling or Sperling’s plan, called “incompetent” and a representation of “defeatism” by Navarro, will prevail, only one last presidential debate and the final election vote will tell.