Democrats make a bad bet on the Trump economy

Holman Jenkins:
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Every bit as hysterical, excessive and embarrassing was the countershow put on by Democrats. But they put themselves on the side of bad things happening. Nancy Pelosi, Chuck Schumer and their junior shadows danced around the maypole, lighted candles, burned effigies—in hope that you will lose your job in 2018, see your hours cut, fail to get an expected raise.

This probably is an ill-advised bet by Democrats. The world’s major economies are in a synchronized upswing. The world’s central banks are using the window to withdraw their histrionic and destabilizing monetary accommodations of the past decade. To the extent that “it’s the economy, stupid” still trumps, the GOP will benefit.

Democratic economists are reworking their “secular stagnation” models to say the Trump program is leading not to faster growth but higher inflation. They are likely to be disappointed. The Trump economy—which we’ve maintained since before Election Day is the economy you get when you take President Obama’s foot off its neck—seems predisposed to remain benign through next year’s congressional election.

Republicans and Democrats, including Barack Obama, have long said our corporate tax system was dysfunctional and needed to be fixed. The rest of the tax bill may be anticlimactic, but it broadens the standard deduction, cuts rates a bit, and slightly reduces itemized deductions, those corrupt and corrupting schemes by which Washington rewards you for redirecting your income to various lobbying interests (including state and local government).

From the Trump show we are getting steps in the direction of “good government” as that term has traditionally and reliably been understood for decades. And unless 250 years of economic thought is ready to be junked, increasing the after-tax return on business investment will lead to more investment.
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There is more.

The GOP bet that Obamacare was going to be a real loser for Democrats was a good one that led to huge gains in Congress.  The major difference between that bet and the one on the tax cuts is that Obamacare actually took money out of people's pockets and gave them less in return, while the tax cuts will put more money in their pockets and lead to increase investments in jobs that will also benefit them.

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