Economists, reports Politico, are fleeing the Agriculture Department's Economic Research Service. Six of them resigned on a single day last month. The reason? They are feeling persecuted for publishing reports that shed an unflattering light on Donald Trump's policies.
But these reports are just reflecting reality (which has a well-known anti-Trump bias). Rural America is a key part of Donald Trump's base. In fact, rural areas are the only parts of the country in which Trump has a net positive approval rating. But they're also the biggest losers under his policies.
What, after all, is Trumpism? In 2016 Trump pretended to be a different kind of Republican, but in practice almost all of his economic agenda has been GOP standard: big tax cuts for corporations and the rich while hacking away at the social safety net. The one big break from orthodoxy has been his protectionism, his eagerness to start trade wars.
All of these policies disproportionately hurt farm country.
The Trump tax cut largely passes farmers by because they aren't corporations and few of them are rich. One of the studies by Agriculture Department economists that raised Trumpian ire showed that to the extent that farmers saw tax reductions, most of the benefits went to the richest 10 percent, while poor farmers saw a slight tax increase.
At the same time, the assault on the safety net is especially harmful to rural America, which relies heavily on safety-net programs. Of the 100 counties with the highest percentage of their populations receiving food stamps, 85 are rural, and most of the rest are in small metropolitan areas. The expansion of Medicaid under the Affordable Care Act, which Trump keeps trying to kill, had its biggest positive impact on rural areas.
These programs are crucial to rural Americans even if they don't personally receive government aid. Safety-net programs bring purchasing power, which helps create rural jobs. Medicaid is also a key factor keeping rural hospitals alive; without it, access to health care would be severely curtailed for rural Americans in general.
What about protectionism? The U.S. farm sector is hugely dependent on access to world markets, much more so than the economy as a whole. American soybean growers export half of what they produce; wheat farmers export 46 percent of their crop. China in particular has become a key market for U.S. farm products. That's why Trump's recent rage-tweeting over trade, which raised the prospect of an expanded trade war, sent grain markets to a 42-year low.
It's important to realize that the threat to farmers isn't just about possible foreign retaliation to Trump's tariffs. One fundamental principle in international economics is that in the long run, taxes on imports end up being taxes on exports as well, usually because they lead to a higher dollar. If the world descends into trade war, U.S. imports and exports will both shrink--and farmers, among our most important exporters, will be the biggest losers.
Why then do rural areas support Trump? A lot of it has to do with cultural factors. In particular, rural voters are far more hostile to immigrants than urban voters--especially in communities where there are few immigrants to be found. Lack of familiarity apparently breeds contempt.
Rural voters also feel disrespected by coastal elites, and Trump has managed to channel their anger. No doubt many rural voters, if they happened to read this column, would react with rage, not at Trump, but at me: "So you think we're stupid!"
But support for Trump might nonetheless start to crack if rural voters realized how much they are being hurt by his policies. What's a Trumpist to do?
One answer is to repeat zombie lies. A few weeks ago Trump told a cheering rally that his cuts in the estate tax have helped farmers. This claim is totally false; PolitiFact rated it "pants on fire." The reality is that in 2017 only about 80 farms and closely held businesses--that's right, 80--paid any estate tax at all. Tales of family farms broken up to pay estate tax are pure fiction.
Another answer is to try to suppress the truth. Hence the persecution of Agriculture Department economists who were just trying to do their jobs.
The assault on truth will have consequences that go beyond politics. Agriculture's Economic Research Service isn't supposed to be a cheering section for whoever is in power. As its mission statement says, its role is to conduct "high-quality, objective economic research to inform and enhance public and private decision making." And that's not an idle boast: Along with the Federal Reserve, the research service is a prime example of how good economics can serve clear practical purposes.
Now, however, the service's ability to do its job is being rapidly degraded, because the Trump administration doesn't believe in fact-based policy. Basically, it doesn't believe in facts, period. Everything is political.
And who will pay the price for this degradation? Rural Americans. Trump's biggest supporters are his biggest victims.
Paul Krugman, who won the 2008 Nobel Prize in economics, writes for the New York Times.
Editorial on 05/11/2019
Print Headline: Trump and rural America