Trumponomics 101: 3 Reasons Why Trump’s Economic Policy Will Work

donald trump & trumponomics

What to Expect in the New Era of Trumponomics

Many mainstream economists and pundits don’t like Trump, or “Trumponomics” (Trump’s economic policy).

That’s because they’re either ignorant, or they’re liars.

It’s harsh, but it’s true.

Economists have tricked themselves into believing their theories, even when they conflict with reality.  They rely on complex models, as opposed to raw data and historical fact—they don’t care about America, or its people.

In short, they don’t get out much.

The truth is that President Donald J Trump’s economic policy is just what America needs right now—we must bring our industry, jobs, and wealth home again.  That’s game plan:

America needs “Trumponomics”.


America’s economy is bad, and it’s getting worse.

Trumponomics“, the pejorative meaning aside, is a combination of:

1.  Economic protectionism (tariffs to stop companies from offshoring).

2. Infrastructure investments (Trump’s planning to spend $1 trillion on new roads and airports etc.).

3.  And cutting taxes and regulations (to improve America’s economic freedom and competitiveness).

All of these help treat the root cause of America’s economic decline, which is offshoring, and the problems it entails.

In short, Trumponomics will make America rich again.

Trump Gets It—America’s Economy Is Collapsing

If you opened your eyes and looked outside, you probably realized that America’s economy isn’t so hot.

If so, skip ahead.  You don’t need any more convincing.

If not, buckle up—this is a wake-up call.

Here are the 3 biggest problems with the US economy:

1. America’s Economic Growth Is (Painfully) Slow

America’s economy, as measured by Gross Domestic Product (GDP), has been slowing since the 1970s—falling from 4% per year, to ~2%.

That’s bad, but it gets worse.

GDP doesn’t really matter all that much—countries with small GDPs, like Denmark, are much more prosperous than those with big GDPs, like India.  What matters is GDP per capita (person).

When you account for population changes, America’s economic growth has basically stopped—economic growth averaged 0.147% per year since 2012.

For context, it averaged 0.34% during the Great Depression—twice as fast.

President Obama dropped the ball.  So did Bush.  And Clinton—all of them.

GDP growth chart

2. US Workers Face Bad Wage Stagnation

Most American’s haven’t got a real raise in 40 years.

Real earnings (what you make relative to the cost of living) peaked in 1973, and it’s been downhill ever since.

This graph shows the real (inflation-adjusted) vs nominal (the number on the bill) wages for average American workers.

Yes you have iPhones and other fancy gadgets today, but that’s because of better technology, not because of increased relative prosperity.

If incomes rose like they used to, an ordinary American family would make $16,509 more—every year.

real vs nominal US wages

3. The Real Unemployment Rate Is Sky High

Most American’s done have jobs.  That’s not hyperbole, it’s a fact.

Only 148 million people (out of 320 million) work—many of them work part time, or have crappy jobs given their skills (think PhD’s working at Starbucks: it happens).

True, not all of these people could work: some are children, some are in jail, others are retired.  But, lots of people would work if they could.

Officially, the unemployment rate is 5.5%, meaning 8.3 million Americans are unemployed.

But that’s crap.  We all know it.

The real unemployment rate is 13.3%—almost 23 million Americans are unemployed.

The government hides 14 million people by dropping them from the labor force—for example, they hid 1.5 million people in a footnote.  Read more about that here.

Not only that, but the labor force participation rate is only 62.7%—the worst it’s been since 1977.

It’s bad out there folks.

labor force participation chart

Trumponomics 101: What Is Donald Trump’s Economic Policy? Will It Work?

Despite what the mainstream media says, President Donald Trump’s economic ideas has been remarkably consistent.

As far back as the 1980s he is on record as voicing concerns over economic globalization, and the impact it has on American industries (it destroys them).  He was right.

But how does he intend to fix it?  What can American citizens and businesses expect in the new Trump era?

Judging from his speeches, tweets, and official platform, we can determine the meaning of Trumponomics.  It has 3 main policy pillars.

Here’s what they are, and why they’ll work.

1.  Trumponomics Is Economic Nationalism (Protectionism & Tariffs)

Economic nationalism is at the heart of Trump’s policy.

He consistently derides the fact that American companies face no consequences for moving their factories (and jobs) to places like Mexico of China—despite selling their products in the US.

He’s right to call them out: all offshoring does is concentrate wealth in the hands of the elites, at the expense of America’s middle and working class—at the end of the day, global free trade doesn’t always work.  It has has winners and losers, and America is one of the losers.


Basically, companies move their labor-intensive jobs abroad to somewhere cheaper, but retain the capital-intensive portions.  For example, Apple offshores iPhone assembly factories, but retains the designers.

However, there are many more industrial workers than knowledge-workers (Apple may fire 10 factory workers, and only hire 1 new designer).

This means that most Americans lose out—for a detailed explanation of how offshoring works, and how it impact America, please read this comprehensive article.

Furthermore, although the imported stuff is nominally cheaper, the only people who actually benefit are those at the top—for everyone who loses their jobs, or don’t get a raise because there’s more labor competition, the stuff isn’t cheaper.

For most Americans, the real cost of goods (its price vs how much you earn) has actually increased—remember the wage stagnation from earlier?  Here’s what that looks like when it comes to our standard of living:declining middle class chart

As you can see, although average discretionary spending (spending on wants, as opposed to needs, like food, clothing, shelter) stayed the same, median spending declined proportionally—this means most people got the shaft.

Protective tariffs (taxes on imports) will stop offshoring, by penalizing companies that leave America—if you sell it here, you make it here.

This will ensure America’s economy works for everyone—that’s how it used to be when America embraced protectionism.  It’ll be that way again.

The “Trump Effect”

And FYI, Trump’s tweets and threats have already forced big multinational companies like Ford, IBM, and General Motors to reshore over 1 million prospective full-time jobs.

Economists are calling it the “Trump Effect“.

Say what you like, but just the threat of protectionism is already working—we can expect more to come in the Trump era.

2. Trump Will Invest $1 Trillion In America’s Infrastructure

Trumponomics is broader than shepherding American businesses so that they work towards the common goal of making our nation prosperous—it’s also about improving our overall economic efficiency.

Trump plans to do this by investing $1 trillion into America’s crumbling roads, bridges, and airports.

His chief strategist, Steve Bannon, told the Hollywood Reporter that:

With negative interest rates throughout the world, [right now’s] the greatest opportunity to rebuild [our country].


He’s right.  With America’s economy in such bad shape, we could get lots of bang for our buck.

This isn’t optional, it has to be done.

Increasing efficiency is the key to growing the economy: the more work that gets done in an hour, the more stuff (or free time) we have—it’s how we improve our quality of life, and how we, as a society, get richer.

One of the easiest ways to improve productivity (for years to come) is to make our infrastructure more efficient.

Good infrastructure is key to a good economy—everything depends upon it.  This is because every business and individual benefits from having efficient airports, adequate bridges, and roads etc.  Good infrastructure lowers transportation costs and minimizes time wasted travelling, or waiting for products.

Furthermore, because infrastructure benefits everyone, but is so expensive for an individual to build, it’s usually the government’s responsibility—even ardent libertarian philosophers like John Stuart Mill recognize this.

America’s government’s done a terrible job maintaining our country.

In fact, the American Society of Civil Engineers gave the US a D+ on their 2013 “report card”.  They also said $3.6 trillion would be needed just to maintain our current roads, bridges, dams etc.

$1 trillion might not even be enough, but it’s a good start.

Trumponomics is needed to repair America's crumbling bridges
Investments are needed to repair our crumbling bridges, like this one on the Mississippi River.  It’s both an economic and a safety issue.

3. Lowering Taxes & Regulations

What else can we expect in the new era of “Trumponomics”?  Lower taxes and fewer regulations—not just for big corporations, but for everyone.

For example, for people making $50,000 or less, you will only pay 5% in federal income tax. Taxes are going down, you can read about them here.

These lower rates, combined with incentives to bring back money held in offshore accounts (estimated to be roughly $2.5 trillion), should give America’s economy the jolt it needs, and will go a long way to improving our competitiveness—you may not know this, but American companies pay some of the highest taxes in the world.

It’s no wonder they’re scrambling to get out.  A combination of lowering domestic taxes, and imposing protective tariffs, will keep them here.

Also, America is plagued by excessive, and often incomprehensible regulation.

Ever try reading an “omnibus bill”?  It’s impossible.  No one, not even the best lawyers, know the law anymore.

Trump vows to slash regulations, and a type of sunset clause, where any new regulations would need to simultaneously scrap a different regulation.

Cutting taxes and regulations will improve economic and intellectual freedom in America.  This will help us grow the economy in the long run.

Trumponomics Will Fix America’s Economy & Make America Rich Again

Donald Trump’s economic policy will work.  Don’t worry.

All 3 of its main elements are historically tried and true methods—you just wouldn’t know it because mainstream economists are so wrapped up in their theories, and completely ignore data and history.

For example, high tariffs (over 50%) were one of the main causes behind Britain’s Industrial Revolution: we owe the modern world to economic nationalism and protectionist measures.

America too, experienced its most rapid economic growth under protectionist policies.  In fact, George Washington’s second piece of legislation was the Tariff Act of 1791.

I urge you to read this article on how economic growth actually works.  Once you understand that, it’ll all make sense.

Select Sources:

Chao, Elaine L. 100 Years of US Consumer Spending, Data for the Nation. New York: US Department of Labor, 2006.

Bureau of Labor Statistics. “Civilian labor force participation rate by age, gender, race, and ethnicity.” Accessed June 5, 2016.

Desilver, Drew. “For Most Workers, Real Wages have Barely Budged for Decades.” Pew Research Center (2014).

Federal Reserve Bank of St. Louis. “Average Hourly Earnings of All Employees: Total Private, Jan 1964- Oct 2016.” Accessed Nov 20, 2016.

Maddison, Angus. The World Economy: Historical Statistics. Paris, OECD Publishing, 2003.

United States Census Bureau. “Income and Poverty in the United States: 2014.” Accessed May 28, 2016.

About Spencer P Morrison 160 Articles
J.D. B.A. in Ancient & Medieval History. Writer and independent intellectual, with a focus on applied philosophy, empirical history, and practical economics. Author of "Bobbins, Not Gold," Editor-In-Chief of the National Economics Editorial, and contributor to American Greatness. His work has appeared in publications including the Daily Caller, the American Thinker, and the Foundation for Economic Education.