Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Give Credit Where It's Due Democratic Hysteria on Some Issues, like Tax Cuts, Could Bolster Trump

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Give Credit Where It's Due Democratic Hysteria on Some Issues, like Tax Cuts, Could Bolster Trump

Article excerpt

Apple's announcement on Wednesday that it will repatriate most of the estimated $274 billion that it holds in offshore earnings is great news for the United States. Uncle Sam will get a one-time $38 billion tax payment. The company promises to add 20,000 jobs to its U.S. workforce, a 24 percent increase, and build a new campus. Another $5 billion will go toward a fund for advanced manufacturing in America.

C'mon. What's with the long face?

In December this column warned that hysterical opposition to the Republican tax bill was a fool's game for Democrats that could only help Donald Trump. Yes, there were things to dislike in the legislation, from both a liberal and a conservative perspective.

But it was not the moral and fiscal apocalypse its critics claimed. And its central achievement - a dramatic cut in corporate rates to 21 percent from 35 percent - was an economic no-brainer that many Democrats, including President Barack Obama, had supported (albeit less steeply) just a few years ago.

Apple will not be the only multinational that will soon bring back gigantic profits to take advantage of new low repatriation rates. Microsoft holds $146 billion in overseas earnings, Pfizer $178 billion, General Electric $82 billion, Alphabet $78 billion, and Cisco $71 billion, according to estimates from the Zion Research Group. The total stash is about $3 trillion - by one measure nearly three times what it was just a decade ago.

Assume that just half of that money comes home to the United States. It's still the equivalent of Canada's entire gross domestic product. Not too shabby, especially considering all the hyperbolic predictions of economic doom that went with Mr. Trump's election.

"The global financial destruction that will happen under President Trump has already begun." That was a headline in London's Independent newspaper on Nov. 9, 2016. Those whom the gods will mock, first they make pompous economic forecasters.

It's worth thinking carefully about why Mr. Trump's critics have been so wrong about the economy, and of the damage their hubris does to the anti-Trump case.

Democrats entered the 2016 election cycle on what they thought was the back of a strong economy. It wasn't. Barack Obama presided over the weakest expansion in postwar history. The economy grew by 15.5 percent from the second quarter of 2009 to the second quarter of 2016. During the (slightly longer) Reagan boom of 1982-90, it grew by more than 38 percent. The failure to understand this meant a failure to appreciate the depth of American discontent. …

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