Presidential Election or Economic Illiteracy Contest?

The 2024 Presidential election appears to be a showdown between two major party candidates vying to display the most evident lack of understanding of economics. On one hand, Donald Trump advocates for hyper-protectionism and even entertains the idea of reverting to mercantilism, in addition to proposing that the President should have influence over setting interest rates at the Federal Reserve. Despite the glaring absurdity of the latter proposal, it does carry appeal with some in the accelerationist camp as it would make glaringly evident the collusion between the Federal Reserve Board and the executive and legislative branches. This could potentially agitate the public enough to demand reform of the system, although my own confidence in the American electorate’s willingness—or interest—in doing so is decidedly quite low.

Harris has recently proposed a plan reminiscent of Hugo Chavez to prohibit “price gouging” in the food industry and grant the FTC significant authority to establish prices and take legal action against businesses that defy the agency’s directives. This policy is guaranteed to result in widespread shortages and hoarding, as acknowledged even by some economists who support Harris. Her evident lack of understanding of fundamental economic principles extends to another proposal, wherein she advocates for a $25,000 subsidy for new homebuyers with the goal of stimulating the housing market. It is widely recognized in basic economic theory that subsidizing demand, despite its initial appeal, runs counter to the recommended approach in a situation where prices are already inflated. In such a scenario, subsidization will inadvertently exacerbate the issue by further driving up prices, contrary to its intended purpose.

In addition to the policies mentioned, it has been challenging to pinpoint more than a few specific policy prescriptions from the Harris camp, except for some lukewarm acknowledgment of the libertarian mantra “Mind your own damn business”—only regarding abortion and LGBTQ issues of course—and they also frequently emphasize the importance of preserving the Affordable Care Act, praise dying programs like Medicare and Social Security, and advocate for more government intervention in various aspects of the market, citing “greed” and “big pharma” or whatever buzzword happens to be the flavor of the day. When Harris pauses her relentless rhetoric on banning “assault weapons” and ensuring unrestricted access to abortion long enough to discuss economic policy, it’s almost enough to inspire a trip to her speaking venue just to throw a full-sized edition of Human Action—or any halfway competent economics textbook—at her podium, although she’d likely never read it.

Similarly, the Trump campaign lacks substantive economic policy solutions beyond a full-throated commitment to destructive trade tariffs and vaguely ambiguous promises to reduce taxes and government spending. When Trump momentarily shifts his focus from immigration—something he rarely does—and addresses economic policy, his proposals oscillate between laziness and vague ambiguity to outright absurdity, but there are a few bright spots. For example, his embrace of Ron Paul’s proposal to repeal taxes on tips and Thomas Massie’s plan to eliminate taxes on Social Security benefits.

In conclusion, the policy platforms of these two presidential campaigns often lack any sort of real clarity, hidden behind a barrage of buzzwords and slogans. When they do offer concrete proposals, the substance often leaves economically-informed observers questioning whether this is a serious election or merely a competition to see who can provoke more nail-biting among us. 

The only silver lining—particularly in light of Harris’s proposal for an overpowered FTC reminiscent of the Soviet Goskomtsen—is that the widely criticized Chevron deference has been effectively dismantled by the Supreme Court’s Loper Bright decision, ensuring that such a plan would be laughed out of the high court. While this offers some reassurance, it is painful to realize that the primary barrier between the United States and a descent into economic disaster akin to Venezuela could realistically be the judgment of nine aging lawyers in black robes.