Reagan’s economic lessons for Trump’s second term

Donald Trump, together with former president of the United States, Ronald Reagan

Donald Trump was born in June 1946, the same year that John F. Kennedy He began his political career in the House of Representatives. In June 1962, while the Republican president-elect was attending the New York Military Academy, Kennedy gave an important speech at Yale University in which he listed the priority trilogy essential for his administration: “First, the question of size and the form of the government’s responsibilities; secondly, public fiscal policy; and thirdly, trust, business trust or public trust, or simply trust in the United States.”

These government premises listed a little more than six decades ago by Kennedy, a centrist Democrat who graduated with honors in International Relations from Harvard University, could be part of Trump’s second presidential term inauguration speech on January 25. Even more so since the designation of Elon Musk leading the new Department of Government Efficiency (DOGE).

In a recent post, the richest man in the world and owner of the social network X posted: “Excess government spending is what causes inflation! ALL public spending is taxation. It is a very important concept that must be taken into account.” During a campaign event last October, the founder of Space

A mirror of the inaugural speech of the first presidential term of Ronald Reagan when he pointed out that, to get out of the economic crisis in which the country was immersed, it was necessary to fully understand that “the government is not the solution to our problem. “The government is the problem.”

Alan Greenspanthe former chairman of the Federal Reserve between 1987 and 2006, recalls in his memoirs a central concept of Reagan’s economic policy (although in reality he had taken it from former President Harry Truman and added the mockery of Carter). “A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery comes when Jimmy Carter loses his!”

In his years of academic training Greenspan had been an enthusiastic student of the ultraliberal intellectual In Rand. The economist who graduated from Columbia University considered that protectionism, regardless of the guise it adopts, be it political or economic, affecting trade or finance, is a recipe for economic stagnation and political authoritarianism. The global economy – which must advance if we want global living standards to continue rising and poverty to fall – requires the safety valve of capitalism: democracy. Telephone for the future president of the Federal Reserve.

Alexander Haig He served as Ronald Reagan’s Secretary of State between 1981 and 1982. For this former general and disciple of Henry Kissinger The Soviet Union was for four decades “the only superpower (apart from the United States), and must remain the first concern of any North American administration.”

By simply exchanging the Soviet Union for China in the geopolitical estimation, and considering the particular relationship they maintain Donald Trump y Vladimir Putinit is not unreasonable to think that in the coming years there will be a new Cold War between both economic and military superpowers.

The statistics of Chinese advance in the global economy speak for themselves. Under the government of Xi Jinping Sales of electric and plug-in hybrid cars accounted for 65 percent of the global total between January and June of this year. It is estimated that in a few months China will produce 10 million electric vehicles, an increase of 34 percent over the previous year. During 2023, China signed more than 100 agreements within the BRICS framework with a value of more than 40 billion dollars.

Wang Huning He is the main political strategist of the Chinese Communist Party (CCP) and one of Xi Jinping’s closest collaborators on foreign intelligence matters. In his vision, in the United States “it is not the people who dominate the technology, but the technology that dominates the people.” And he concludes that, “if you want to overwhelm Americans, you must do one thing: surpass them in science and technology.” A great wake-up call for Donald Trump and Elon Musk, his top advisor on the matter.

The German philosopher Jurgen Habermas characterized Reagan’s political doctrine at the end of his first term in 1984 as a reaction to historic American frustrations, especially those that occurred since the late 1960s. This is how he expressed it: “The neoconservatives assimilated the defeat in Vietnam and the policy of distension of Henry Kissinger with the feeling that the North American resistance against international communism had been paralyzed due to a kind of moral disarmament.

Without a doubt, for the future Secretary of State Marco Rubio The ethical crusade will be a flag that will fly across the five continents. It will be necessary to see in this sense, what will be the political (and military?) strategy of the head of US diplomacy to try to put an end to the Bolivarian regime that he presides. Nicolas Maduro.

The historical balance of the Reaganomics It is the subject of disputes between historians and economists to this day. In March 1989, an intellectual located at the antipodes of Keynesianism wrote: “The Reagan administration, supposedly a defender of free trade, has been the most protectionist in North American history: it has increased tariffs, imposed import quotas and – as another example of creative semantics – has twisted the arm of the Japanese into imposing voluntary export quotas on cars and microchips.” The author of this lapidary judgment was Murray Newton Rothbardthe ultimate libertarian guru.

The general Colin PowellSecretary of State of the Republican government of George W. Bush Between 2001 and 2005, he periodically wrote to his closest collaborators: “Avoid letting your ego be too close to the position you defend, because if your position falls it can drag down your ego.”

Temperance and the power of self-criticism are the most durable fuels for the psychology of political leadership.

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