Donald Trump’s presidency has been a mix of establishment and populist politics. In terms of policy, the president has combined standard Republican tax cuts and deregulation, with more restrictionist policies in trade and immigration. And while the president’s rhetoric has often been anti-elite norm-violating and sometimes inflammatory, he’s also won the support of the mainstream Republican Party lawmakers and voters alike. So, what are we to make of his presidency? Have President Trump’s economic policies been successful? If so, to what degree does populism deserve the credit? Going forward, what lessons should policymakers learn from this recent rise of populism on both the left and right? Casey Mulligan and Michael Strain recently discussed these questions, and many more, with me at an AEI web event, which has been adapted into an episode of Political Economy.

Casey Mulligan is a professor of economics at the University of Chicago, and he served as chief economist for the Council of Economic Advisers in the Trump Administration from September 2018 to August 2019. He is also the author of the recently released book, You’re Hired! Untold Successes and Failures of a Populist President. Michael Strain is the Arthur F. Burns Scholar in Political Economy and director of economic policy studies at AEI. He is the author of The American Dream Is Not Dead: (But Populism Could Kill It), released in February of this year.

What follows is a lightly edited transcript of our conversation, including brief portions that were cut from the original podcast. 

Pethokoukis: To start out, Casey will speak for about 10 minutes, and then Mike will offer a 10-minute response. And after that, we’ll have a panel discussion for a while. With that, please proceed, Professor Mulligan.

Mulligan: Good morning. I really appreciate AEI organizing this. I have some slides to share during my presentation. I’m going to economize your time today, but you can find a lot more in my new book. Readers have been having fun but also coming away, agreeing at least somewhat that populism has some real substance.

Let’s start with a definition of populism. In his book, Michael refers to, “Pitting the ‘people’ against the ‘elites.’” And the “people” and the “elites” are in scare quotes, so I take that to mean that he and others might be skeptical whether these groups actually exist. And as I explained in my book, the elites really do exist as a group and prove that it’s only a slight exaggeration to say that we all know each other. There’s one piece of data: Even in the Trump White House, the incidence of Harvard graduates is 100 times what it is in the general population.

Second, the word “pitting,” I think, suggests that the conflict is imagined or only manufactured by politicians. On the contrary, this is a real conflict. People have been suffering from significant policy mistakes, which the elites do not acknowledge, let alone fix. In a short time today, I’ll give you a couple of examples.

Drug overdoses tripled over about 10 years, but as various metrics in my book show, Washington remained as oblivious as ever. Federal policy was unwittingly fueling this epidemic, for example, subsidies up and down the prescription drug supply chain, but — at least in the years I showed you — illegal fentanyl did not loom large. During these years, and decades before, fentanyl would momentarily come into the US market, and at the time, people would say our drug supply was getting poisoned, but the Department of Justice every time would beat it back. Then, in 2013, without any acknowledgment of what was going on with opioids, the Attorney General did this [plays video]:

Eric Holder: I had these mandatory minimum sentences that I had to impose on people who had drug problems, and who were selling relatively small amounts of drugs in a non-violent way to support a drug habit that they had, and who had to go to jail for a five-year mandatory minimum or a ten-year mandatory minimum and I didn’t feel comfortable doing that.

Video Narrator: As Attorney General, Holder announced that he would no longer support mandatory minimums for a low-level drug crime.

Mulligan: Immediately, here comes the fentanyl. Immediately, surveys showed record increases in the number of people using illicitly manufactured opioids. The Trump campaign called out the opioid epidemic. This was a major part of the American carnage that Trump cited in his inaugural address, which of course, deeply offended the elites. I’ll go easy on Michael on this point. Let’s instead take Susan Rice’s new book, which she begins by talking about when she heard Trump say “American carnage” in his address. She says that was evidence “of his unthinkable cynicism and ugliness and how our president was saying farewell to the moral universe,” I quote her. She has 534 pages in that book, but not one of them has room to mention the opioid epidemic, drug overdoses, or any real substance behind populism.

Let’s look closer at the address and at the monthly data. What did the president say in his inaugural address? “The crime and the gangs and drugs that have stolen too many lives and robbed our country of so much potential. This American carnage stops right here and right now.” Very clearly, once we go back and look at what he actually said, he’s referring to the drugs and the crime that have stolen too many lives early before the natural death.

Now, I admit that the monthly data are noisy, but it sure looks like the carnage did stop exactly when our president said it would. The deaths did not go down to zero — and I’ll have more to say about that — but part of what happened in January 2017 is the new attorney general that the president put in rescinded the Holder memo. However, I am concerned that some US attorneys out there are still following the Holder approach.

Trump also campaigned loudly against Obamacare’s individual mandate specifically and excessive regulation generally. The individual mandate is a classic case where regular people had to suffer under a fundamentally flawed theory from the so-called experts. Another thing they tried to do is to force people with beer budgets to have wine tastes. I give many examples in the book, but let’s take small-dollar loans. As JD Vance explains in his best-selling book about flyover country, small loans can be a convenient and valuable product for poor people. They can pay $40 or $50 to get a small short-term loan that allows them to avoid hundreds of dollars in late fees and penalties from banks, landlords, collectors, etc. But the so-called Consumer Finance Protection Bureau puts that $40 in their annual percentage rate formula and concludes that nobody should be allowed to purchase such a service. Never mind that 600,000 consumers who wrote to CFPB begging to keep the loans that helped them pay, and I quote, “for rent, childcare, food, vacation, school supplies, car payments, power utility bills, cell phone bills, credit card bills, groceries, medical bills, insurance premiums and student educational costs.”

The last thing that I want to show you with the little time that I have is how FDA regulations protected generic drug manufacturers from competition. This is not a question of safety and efficacy, because the formula in any generic drug has been in use for many years. The companies rig the system so that they can charge brand name prices for generic products. President Trump ended that, beginning in 2017. This really hurt Chinese and other foreign companies who had previously secured themselves special favors. Israeli manufacturers stock crashed, and the analysts readily acknowledged that there was more competition in the market for generic drugs stemming from what the FDA began doing in 2017. Most importantly, consumers saw it too, as the consumer price index for prescription drugs became negative for the first time in 46 years.

Now, I understand that deregulation is a dirty word in certain circles that call themselves populists, and also that Jim called deregulation the standard Republican fare. Well, by itself, Trump’s FDA deregulation translates into ongoing savings of about 11 percent on prescription drugs, generally, which is a big deal, especially for low-income families. I don’t understand why any populist would want to reverse these savings and return to companies the privileges that excessive regulation created for them.

Trump’s many regulatory changes add up to real savings. These are my estimates of what it would cost to go back to running the regulatory state, the way President Bush and Obama were. I have broken consumers down into five income groups, and you can see that the lowest income group would face lower wages and higher expenses, such as the prescription drugs, that total 15 percent of their income. That would be like doubling their taxes. The way I see it, Trump has been a political entrepreneur who figured out how to ride populism into winning the world’s biggest elected position — and then achieving historic policy successes pursuant to some of his campaign promises.

There are failures too — the subtitle of my book is “Successes and Failures.” Maybe Trump is the political sphere’s version of the Blackberry: historical progress, but ultimately to be supplanted by something even better. What I can assure you is that people continue to suffer from significant policy mistakes, and they know it. Even while the elites continue failing to acknowledge and even hiding evidence — as I explained in my book — about their failures, populism is not going away, even when Trump does. Thank you.

All right, great. Now we have 10 minutes or so from Dr. Strain.

Strain: Thank you, Dr. Mulligan, for that thoughtful presentation, and there’s a lot there, for sure. And I would encourage everybody to buy Casey’s book. You can find it on Amazon and other places as well. It’s very thoughtful and certainly worth your time, and regardless of what happens next month, I think Casey’s point that populism may be here to stay — including other iterations of populism following President Trump — is certainly a thoughtful thesis and one that all people who are interested in politics, economics, and public policy should read. So I would strongly encourage you to buy Casey’s book.

My book is The American Dream Is Not Dead: (But Populism Could Kill It). I think you can tell by the subtitle that Casey and I have different views on this question. And so I’m delighted to be having this conversation today. And thanks to everybody for tuning in.

Let me just dive in here. What is populism? Casey touched on this and quoted me, and I didn’t hear Casey’s presentation before he gave it — I heard it for the first time with the audience. So you’ll see the scare quotes in here around the people on the elite side. If I had heard Casey’s presentation, I might have taken those out. But let me give a three-part definition.

First, a political stance, aggressively pitting the people against the elites, I think, is a key part of any definition of populism. This does not mean that the elites don’t exist, and the people don’t exist. But it does mean that I think that this dichotomy is overdone by populists and populism. The dichotomy is less strong than the populists would have you believe.

Second, emphasis on the decency of the people and the corruption of the elites is an important part of populism — that the elites are rigging the system against the people. That’s a common phrase you hear Elizabeth Warren and Bernie Sanders use, for example, as well as the president.

And then, finally, an embrace of pessimism, the notion that things are terrible and our trajectory is bad for the nation and for individuals, and an effort to close the country and turn inward. “Immigrants are the problem. Globalists are the problem. Globalization is the problem. We’re losing abroad.” This is a zero-sum mentality, we need to turn inward, focus on ourselves, and we need to do that because things are really terrible. So that I think is the way that I think about populism.

Let’s talk about Trumpian populism. I think it’s important to identify which of the president’s initiatives are populist and why. When the president orders scrambled eggs for breakfast, that’s not a populist act. Lots of people have scrambled eggs for breakfast. And certainly, not everything the president has done is populist, but there are quite a few things that are.

Looking at the best parts of the president’s agenda, Casey talked a lot about one in his presentation: deregulation. I think that’s been successful. There’s also the 2017 tax law, and particularly the corporate tax provisions in that law, which I think are very successful. These are the best parts of the president’s overall economic policy agenda, but I wouldn’t include those as populist. I think that reducing the corporate income tax rate is something that Mitt Romney would have done if he were elected. There would have been a lot of pressure on John McCain to do that if he were elected. And that’s been a standard goal of Republican conservative economic policy for quite some time, and the same thing goes for deregulation. Find me a Republican who doesn’t think that the US economy is too heavily regulated.

Those are certainly a part of the president’s policy agenda, and they are successful parts of the president’s policy agenda, but I wouldn’t call them populist. Instead, trade wars, attacks on domestic institutions, attacks on international institutions, attacks on basic norms, hostility toward immigrants and immigration — those components of the president’s agenda are populist and meet the definition of populism that I put out at the beginning. In addition, I would argue that the president typically enters the public debate and the discourse as a populist as well. And that’s a big part of his presidency.

The component of the president’s populist agenda that he’s made the most progress on, I think, is the trade war. And so let’s just take a look at that in a little more detail. I would argue that the trade war didn’t work, even on its own terms. The terms of the trade war are the standard terms that are used by Democrats and Republicans who support protectionism, which is that there’s this group of workers and these parts of the country that have been neglected by the elites. The elites are more interested in globalism and more interested in overall economic performance, which presumably will help them than they are in manufacturing workers and manufacturing towns. So we need some protectionist policies in order to correct that imbalance. And even if those policies increase consumer prices, slow investment spending, slow overall economic growth, they’re worth it because they afford special benefit to this group of neglected workers — in this case, manufacturing workers or certain neglected regions of the country.

Casey mentioned the president’s inaugural address’s phrase, “American Carnage.” The president spoke about hollowed-out factory towns — I think the phrase was scattered like tombstones across the nation. This is what we’re talking about. You’ll recall, when the trade war began, Commerce Secretary Wilbur Ross going on television holding up a can of Campbell’s soup and saying, “This can will cost you 1.5 cents or two cents more than it otherwise would.” The idea is that we can spread the pain of the trade war over the entire nation, and it’s really not going to be that bad — it’s just going to cost you an extra penny to buy your can of soup. But that’s going to allow significant benefits to flow to manufacturing workers, who again deserve special attention.

The best piece of evidence I’m aware of that looks at this hypothesis is a 2019 paper by Federal Reserve economists, Flaaen and Pierce. They do what seems to be a pretty careful job trying to identify the effect of the trade war on manufacturing. And they find that protection from import competition provided by the tariffs does, in isolation, increase manufacturing employment. So looking at that one component, protection from import competition, actually does increase employment by about 0.3 percent under the measure that they use. But that, of course, is not all that trade wars do. Trade wars also increase the costs businesses face to purchase the goods they need for production — intermediate goods in the production process. And Flaaen and Pierce estimate that this effect reduces employment by 1.1 percent.

So even there, the effect of the trade war on employment from increasing the cost of intermediate goods is significantly larger than the positive effect of protection from imports. And of course, trade wars don’t just happen. They’re wars. There’s a tit-for-tat. The president doesn’t just impose tariffs and then that’s the end of the story. Nations retaliate. And they also took that into account by looking at three factors: protection from imports, increases in the cost of intermediate goods to production, and tit-for-tat. And they find that overall manufacturing employment actually was reduced by 1.4 percent — again, as a consequence of the trade war.

So the trade war didn’t work, even on the populist terms. The question, has Trumpian populism succeeded? For the trade war, the answer has to be no. Because the trade war hurt manufacturing workers, which are the group that the president argued needed special attention. The trade war had other effects as well of course: a reduction in the varieties of imported goods that US consumers could enjoy, higher prices that consumers faced at the cash register, fewer exports which hurt export-intensive firms — particularly farms — lower stock returns, and higher default risk. Again, this must be a consequence of the tit-for-tat. Most of the items on this list are pretty well-established by existing economics research.

Policy uncertainty from the trade war slowed business investment, which worked against the president’s signature legislative accomplishment, which was the corporate tax reduction. The president encouraged investment with his right hand by reducing corporate tax rates, and then he discouraged investment with his left hand by starting trade wars. So when looking at the spillover effects, not only did Trumpian populism not work for the populist objectives, but it also reduced the president’s other objectives’ effectiveness.

A little example of this uncertainty: “We’re doing this for the Christmas season.” That’s a quote from the president. Let’s go back to the summer of 2019. In June, the US had been imposing a 25 percent tariff on $250 billion in Chinese imports, roughly half. Later in the month of June, the president agreed not to impose additional tariffs and to restart trade negotiations with China. Then, about five weeks later, the president abruptly changed his mind and imposed a 10 percent tariff on the remaining $300 billion of imports, effective September 1st. Then a few weeks after that, the president said, “Oh, we’re not going to do that until December.” When asked why, the president said, “we’re doing this for the Christmas season.” That’s a remarkable statement from the president, given that he had spent years telling the American people and telling businesses that the trade war would not have any adverse effect on them.

This is an example of the kind of climate created when you enter into a trade war. How are businesses supposed to make investment decisions when there’s so much uncertainty about what the trade policy regime would be? This, I think, undermined the success of the 2017 tax law, at least for now. But in addition, it undermined the argument that conservative analysts and economists put forward, which is that businesses will respond to these incentives. And if we have a President Biden, and he raises the corporate tax rate, people on the right and economists who are more in favor of free markets who want to reduce the corporate tax rate again are going to have a much harder time doing that because of the president’s trade war.

Let me just say a word about populism over the long-term. I think a key part of the president’s populism has been to stoke racial, ethnic, and religious animosity. This must have some effect on consumer spending on business formation, particularly if it’s sustained over the longer term. The president has supported protectionism and attacked the post-World War II liberal international order. That’s a direct threat to prosperity. Those institutions in that regime have been the bedrock of prosperity on both sides of the Atlantic for seven decades. By attacking it and by weakening it, the president risks threatening a key foundation of that prosperity.

And by weakening the rule of law — and the cultures and norms reinforcing it — the president has eroded the foundations of a strong economy by attacking institutions. By labeling the Federal Reserve Chairman as an enemy, the president has weakened confidence in the Fed. The president’s hostility toward immigrants threatens the United States’ place as the global destination for many of the world’s best, brightest, and most ambitious people, which, of course, has a significant longer-run economic effect.

The extent to which this damage occurred over the last four years, I think, is surprising and considerable. The extent to which it will be lasting, I think, is more of an open question. But all of this, I think, is problematic from an economic perspective. And all of it, I think, flows from the president’s populism. These are all manifestations of the populist impulse, and I think that they contribute to my verdict, which is that Trumpian populism has not succeeded.

The foundation of the president’s message, as Casey referred to the president’s inaugural address is “American Carnage” — that people have been doing terribly and many parts of the country are a wasteland. I think this is just at odds with the facts. It is not in line with the economic record of the past three decades, which is something I spend a lot of time on in my book. America is upwardly mobile. Wages and incomes aren’t stagnant. Workers do enjoy the fruits of their labor. The game is not rigged. Capitalism is not broken.

The president has argued on each of these points that I am wrong. And I believe the evidence suggests that the president and the populists are wrong. You hear exactly the same charges from populists on the political left as well, from Senator Sanders and Senator Warren. Populism is pessimistic, populism is inward-focused, and I think we should be optimistic, and we should be outward-focused. We are not in a zero-sum conflict with each other. We can be open to the world, and we can be confident in the future. And those aren’t just sentiments. We can be confident, we should be open, and we are not in a zero-sum conflict, because that is what the economic record shows. Thank you for tuning in. And I look forward to the discussion.

Thanks a lot, Mike. So Casey, is Mike, right? Are the successful parts of Trumpian populism — tax cuts and deregulation — actually just Republicanism and conservative economics?

Mulligan: Nope. I think if you look — and someone should do a word analysis of Trump’s speeches, he’s given a lot of speeches — you’ll find the individual mandate and prescription drugs coming in there, way more than trade. If you look at all four years together, there have been periods of time where he was emphasizing trade more. But every other day, he is bragging about getting rid of the individual mandate. Now, you want to say that’s a Republican thing? Okay. I think the mandate came from Heritage, but whatever.

As I explain in the book, the way Trump learned that the individual mandate was terrible and that he should get rid of it — as a leader of the people rather than the elites — was to ignore what the experts were saying about how it’s needed for adverse selection and all those really terrible analysis. He listened to the people, not Washington.

Same with the prescription drugs that you hear about in Washington. Again, he heard from the people. And those prescription drug regulations were there in the Bush administration, and he was a Republican last I checked. He had a brother that tried to run for this spot that Trump beat pretty handily.

The opioid epidemic, in fact, as I explain in the book, is a bipartisan failure. Those subsidies up and down the supply chain, a lot of them came in under Republicans. In fact, some of the people who worked for Bush on those issues are still in the Trump administration and are burying the evidence about this. So these are major things that the president has been doing, and if Republicans want to take credit at the end, that’s fine, but at least the people got what they wanted.

Regarding tariffs, I think, first of all, Michael’s way too focused on the tariffs. If you look at the amount of revenue involved with the tariffs, it’s like just one of these deregulations. It’s fairly small.

Now, do you remember the Reagan trade war? I don’t either. If you heard Reagan talk about free trade, it was so beautiful. It literally brings tears to my eyes to hear Reagan talk about trade. But I explain in the book that once I wipe the tears away and actually look at what Reagan did, Reagan was every bit as protectionist as Trump. Does that mean that protectionism is populist or Republican? I don’t know. Reagan is the iconic Republican. But he was so protectionist.

What he did differently and the reason there weren’t Reagan trade wars, is that he did quotas. He protected the industries with quotas rather than tariffs, which means that the revenue and extra money consumers pay goes to foreign companies rather than our Treasury. That’s the big difference. In those days, it was Japan, and today it’s China. But otherwise, it was the same thing with intellectual property problems in Japan and other places in East Asia.

Reagan was threatening tariffs, threatening protectionism, and delivered this number of quotas to try to deal with that. And in his second term, Reagan got the Japanese and some other East Asian countries to agree to some intellectual property protections, copyrights, and so on. The same thing is going on with Trump. In fact, Trump has a lot of the Reagan people. Lighthizer is the lead trade guy now, and he was the number two trade guy under Reagan. You have Kudlow there from Reagan. You have the speechwriter who worked on “tear down this wall.” So there’s a lot of the same people. Protectionism, I think, is a bipartisan affair that has been around long before populism.

Michael, I would recommend looking at the tariff list. Download Lighthizer’s tariff list and just take a look at what’s there. The stuff you’re talking about is tiny, even relative to that list. We have a number of outright import prohibitions that have been around my entire lifetime, when there’s been no populist president. You can’t make pickup trucks in a foreign country because there’s a massive tariff on it — that’s been there forever. And Obama and Bush never once dreamed about eliminating it. In fact, another import prohibition we have is the Jones Act. Bush, Obama, and Reagan all promised special interests that they were going to keep that prohibition on importing coastal shipping services. Trump is the first one who has not promised to that lobby that he will keep it. In fact, as I explained in the book, he has tried, and so far has failed, to get rid of it. But he is not telling the special interest that they can keep that.

So I think to settle this debate, we need to be grounded in what’s actually said, and what the actual policies are. And these are busy people, and they have lots of things they say and lots of things they do, but as quantitative social scientists, we have ways to bring them together, and I think you’ll see a different picture.

Mike, do you agree with Casey that the trade war may be good or bad, but maybe it’s not nearly as important as what you make it out to be? Particularly compared to what Casey cited as successes?

Strain: No, I don’t. Let me offer an area of agreement. I agree with Casey on the historical record that Republican presidents have imposed trade protections. There’s no question about that. President Bush did, and President Reagan did as well. But the general direction of US trade policy under both Republicans and Democrats has been toward greater openness, greater globalization, and fewer barriers to trade for decades. That doesn’t mean that there weren’t ever protectionist policies put in place. That doesn’t mean that we had a tariff-free world under President Bush and President Reagan, and then all of a sudden, all the tariffs popped up under Democrats. However, it does mean that dismantling the protectionist global trade system that was in place decades and decades ago has been a bipartisan project.

Now, I think that successive presidents, starting with President Bush and President Obama, were more aggressive toward China and their trade practices. That was wholly justified. And I believe that if Mrs. Clinton had won in 2016, she would have been more aggressive toward China than President Obama was and that she should have been. And if Mitt Romney were president in 2016, he would have been more aggressive toward China than President Obama was.

What makes the president stand out is his hostility toward that entire regime and his hostility toward free trade in general. Instead of rallying an international coalition of trading partners to isolate China and crack down on China’s genuine and legitimate trade abuses, the president imposed tariffs on European allies, imposed tariffs on our Canadian allies, and talked about pulling out of NATO and all these things. And so the president was left without allies. This has made his policies toward China much less effective than they could or should have been.

The president has a basic illiteracy about trade, not understanding what trade deficits are and what they are not. His adherence to a mercantilist view of trade that’s rejected by all economists, or nearly all economists, has, I think, been unique. And these are distinctly populist elements of the president’s approach to trade policy that I don’t think can be accurately characterized as being and keeping with the direction of trade policy under presidents of both parties. And that, I think, does represent an aberration from what we’ve seen previously.

Do you have a response to that, Casey?

Mulligan: I think, when we look at the numbers, I don’t think you’re going to see Trump being an aberration relative to Reagan. As long as you distinguish tariffs from quotas. Okay? If you go out and measure tariffs under Reagan, you’re not going to see a lot. He threatened some, but he didn’t do them. He implemented the quotas instead. But I don’t know an economist who’s like, “Oh, the quotas is much better than the tariffs, let’s give the money to the foreign companies.”

That’s why he didn’t get a trade war, by the way. Reagan was giving money to the Japanese companies while he was protecting our domestic companies. So of course the Japanese didn’t fight back. In fact, folks from the Reagan administration have told me that the Japanese companies came into the White House and asked for quotas, and Reagan gave it to them. And I applaud Trump for it. I don’t like protectionism. But if you’re going to do protectionism, at least do it in a way that brings revenue to the United States instead of the foreign companies.

Casey, what do you think about Trump’s immigration policies? Have they been good ideas, and would you like to see them continued in future administrations or even extended?

Mulligan: I don’t know if anybody was aware of what Trump’s immigration plan was when he announced it. His plan is essentially the Canadian and Australian plans, which is immigration should be legal rather than illegal, and based on the economic contribution of the immigrants. That was his plan. The president opened this Rose Garden ceremony by saying, “Citizenship is the most precious thing America has to offer.” Privately he said that too. He went to the next step, which really amazed and impressed me, saying, “We ought to be selling citizenship,” which, of course, was what Gary Becker called for in his radical proposal for immigration reform: a fee for immigration.

Now the president is a good politician, and he knows he’s not going to go out and try to sell that to Congress. Congress isn’t going to do anything that the president wants on immigration. So maybe you’d say this is not that meaningful. But this is his plan, and this would be his chance to do demonstrative acts rather than substantive acts. And his plan was the Canadian and the Australian plan, which is an approximation to the Gary Becker plan. So I was quite impressed with what the president does on immigration, in terms of policy. The rhetoric, that’s not my area. I’m a policy analyst. I’m not a speechwriter. But I look at the substance, and I’m pretty impressed.

Mike, are you impressed by the president’s immigration proposals or direction?

Strain: Well, I think in terms of the substance of that specific proposal, I think there were a lot of questions about the details of that proposal. But the basic idea that we should move a little closer toward a skills-based immigration system, and a little bit away from a family-based immigration system, I think, is completely sound.

My own view is, why not do both? Why not just have a significantly larger number of green cards for the highly skilled immigrants and just add that on top of what we’re already doing? But that is a reasonable policy goal. Again, I think the details of the proposal needed some work. But the overall architecture and philosophy behind that were reasonable. I agree with Casey about that.

I don’t think we should judge the entirety of the president’s work on immigration based on that one proposal. And again, going back to the question of whether Trumpian populism has succeeded or failed: A big part of the reason why that didn’t get any traction is that the president has no credibility on this issue because of his extreme hostility toward immigrants and toward immigration. The travel ban on people from some Muslim majority nations set the tone early in the administration on this. And that has continued all the way up to the pandemic, when the Trump administration attempted to say to people who are here on student visas that if you can’t attend class in person, you have to go back to your home country, which was just outrageous public policy. The last four years have really been littered with that type of thing. And that has stopped any momentum and any possibility of meaningful legislation on immigration while President Trump is president — even on issues where the 30,000-foot structure the president is advocating is completely reasonable, albeit also still debatable.

And so, has Trumpian populism succeeded on immigration? Has President Trump succeeded on immigration? No, he hasn’t. And a big part of that — or maybe even most of it — is because of the populist elements of his posture toward immigration.

Do you have a response Casey, or would you want to move on?

Mulligan: Yeah, I think we should move on. I mean, these are interesting subjects, but we should treat them proportionally, which is not disproportionately by spending the whole day on that.

Now, another definition of populism is a politics and policy that just doesn’t believe in constraints and trade-offs. Republicans used to be very concerned about budget deficits and entitlements, which has not been a big part of Trumpian populism so far. Will that continue to be a part of Trumpian populism — not worrying about debts and deficits and entitlements? That’s for the other party to worry about, I guess, when they get in power?

Mulligan: With respect to Trumpian populism, I think you’re right. I’ve heard the president say, “Oh, the government revenue machine, we just spin that massive wheel a little bit faster.” He’s not really concerned about the deficit.

Do you view that as a failure? The deficit’s gone up a lot.

Mulligan: Yeah, I view that as a failure. Now, ultimately, the fundamentals here are generational equity. That’s the fundamental thing. I mean, the problem with the big debt is you’re living off the children and the grandchildren. And so I’ve put on my Kotlikoff hat here, I would like to take a more holistic view of the generational policy here. So COVID would factor into that — how are we treating the children versus the older people? And those sorts of trade-offs. I don’t know that he’s that unusual in terms of generational inequity, compared to past presidents on the whole. But certainly, in that specific area of treasury bonds and bills, he would be putting the burden on future generations.

Has this been a problem, Mike, the lack of interest or concern in the national debt, which seemed to be a big concern when it was smaller?

Strain: Yeah, I think it’s been a problem. I mean, here, I guess I would let the president off the hook a little bit. I think that there’s bipartisan concern about the debt and deficit, but it’s just never the number one concern that either party has. Of course, it’s true that President Trump significantly increased the structural budget deficit, but he did that hand in glove with the House Speaker, Paul Ryan, who is a very establishment, traditional Republican. And there was not a whole lot of concern about that from the Republican Party at the time. The deficit went up significantly under President George W. Bush, who established an additional entitlement program without a funding mechanism. And of course, the deficit went up under President Obama as well. So this is a bipartisan issue.

I think where populism shows up in President Trump’s approach to the debt and deficit, which is, I think, an aberration among Republican presidents, is the president’s enthusiasm for not cutting projected future spending on Social Security and Medicare. The Romney-Ryan campaign back in 2012 had that on their campaign website as a goal. And of course, Speaker Ryan made his reputation in large part on restraining entitlement spending. And President Trump not only just ignored that and put it in the background, but actually was quite vocal that he would not reduce spending on Medicare or Social Security during the 2016 campaign. And then when he was actually in office in 2017, he continued to make it very clear that he just wasn’t interested in cutting future spending on those programs.

Maybe that’s populism, maybe that’s smart politics, maybe that’s just honesty. And I think that’s an open question. But I wouldn’t give President Trump a particularly harsh grade when grading on a curve on this, and I don’t view this as a major manifestation of his populism.

If President Trump is defeated, how will populism on the right change? Let’s start with Casey.

Mulligan: That’s like asking me, “We got the BlackBerry, what’s coming next?”I don’t know. It would be something better. But how will it be better? I mean, I would be a billionaire if I knew exactly how to improve on it.

But I think populism will remain. Politicians will look at Trump closely and try to figure out what he did well and what can be improved. It goes back to the fact that elites are making mistakes, and they’re not acknowledging those mistakes. And the people don’t have to tolerate that.

Most of Michael’s book I agree with. The progress has been great for wide swaths of the population. But that doesn’t mean that people have to tolerate these mistakes from the people they elect. They elected people to do a job, and if they’re not doing it well, they have a right to be angry. And they are angry.

My book is full of examples where they didn’t do a good job. The individual mandate was a terrible job. The opioid policies have been a terrible job and continue to be a terrible job. And people are going to be upset with that, and the next entrepreneur will figure out how to take on the elite and still try to do the job as president. It’s not easy, because the elite fight back. I mean, the elite aren’t stupid people. They’re not powerless people. So populism is not an easy product to invent. But I’m confident that somebody will invent a new and improved one.

Mike, how do you think populism on the right evolves? For instance, I’m a little confused about what Republicans think about trade. On one hand, they’re talking about decoupling the two economies, but the phase one trade deal, actually, in many ways, more firmly integrated the two economies and made China a better place to invest with more agricultural goods being shipped. So particularly on trade — but also any other issue you want to address — how does that populism on the right evolve in a post Trump era?

Strain: The first thing I would say is I think it does evolve, but I think it evolves a lot less than is commonly believed. I mean, I think the United States was on the cusp of extinguishing this populist flame when the pandemic hit. And I would note that the Democratic Party nominated Vice President Biden when it could have nominated Senator Sanders or Senator Warren, both of whom are populists. My guess is that if the Democratic primaries were held one year earlier, when the economy was still weaker, and when the gains from the recovery hadn’t reached everyone in the nation as strongly yet, that one of the populist candidates would have had perhaps more success.

There’s a pattern, and you see it over the last century, or even longer. You see this pattern across democracies: When you have a big recession that originated in the financial sector and results in widespread hardship, you get a surge in populism. And you can measure that by seats in the country’s legislature and parliamentary systems. We saw this in Britain with Boris Johnson, for example. Then, as the recovery continues from that recession, populism recedes. And populism was receding in the United States. But now, of course, we have the pandemic, and the economy is in terrible shape again.

So my first answer to your question is, I think as we recover from this recession, populism may surge again because we’re in terrible shape. However, when we get back to a healthy economy, its influence will diminish. But I do think there will be some lasting elements of this. Some of those elements are good. I think — and I hope — that the Republican Party, because of President Trump, will be more focused on providing economic opportunity to lower-income households and workers than it previously has been. That would be a good lesson learned. I hope it’s not just the white working class. I hope it’s the entire bottom 20 percent or bottom third of the income distribution. But I think that would be a positive, lasting legacy of the president’s populism.

I think a hawkishness toward China is going to be something that justifiably should continue to be a part of the political right. Hopefully, it’s executed better than the Trump administration has done. But I expect that will last. And then, unfortunately, I think that hostility toward immigrants and immigration is going to have some staying power on the political right. And I think that will be to the detriment of the United States.

Mulligan: Michael, is there something missing from your definition and mine? Because our definitions are about the elite versus the people, but then you were calling Sanders and Warren populists, but their whole policy agenda is to give more power to the elite over the people. So what gives?

Strain: Yeah, they don’t see it that way. But I understand your analysis of that.

Casey, when I hear a lot of these new Trumpian-populist policy people on the right — when they talk about the big elite policy mistakes — the two mistakes that come up, over and over again, are 1) giving China a most-favored-nation trading status and letting them be part of the global economy in 2000, and 2) the 1965 Immigration Act, which increased immigration to the United States from areas where we weren’t getting a lot of immigrants. Do you view those as failures of elites, letting more immigrants into this country and helping China become a more integrated part of the global economy?

Mulligan: Well, there were elements of failure. I mean, where was the fentanyl coming from? There was a report the Clinton administration did around NAFTA about what that did to the price of heroin, which is classified — you and I can’t see it. They buried those facts. So there were elements of real cost to some of these trade arrangements that weren’t acknowledged. That doesn’t mean there weren’t benefits. Maybe the benefits are bigger.

Do you think it’s still a net benefit to have China being a greater part of the global economy?

Mulligan: It’s hard for me to analyze. Well, Japan would be easy for me to say, yeah, because Japan’s a democracy, and it doesn’t have a military. There is a whole national security part of that which is not my expertise, so I really can’t weigh in, but it has to be weighed in.

On immigration, I’m coming from a university, so you shouldn’t listen to what I’m going to say. But the university sector has been given a lot of special favors around immigration. And you could understand why the people would say, “Academia hates us, and they hate this president. Why are we giving you these special favors?” And so that’s a problem.

Not that I’m against more immigration. But when the rights to immigration are doled out to special interests, I would question that. That’s what I see keeping the fuel going, even within Trump’s administration in terms of pushing against some of these old immigration plans and deals.

All right. We’re just at the end. Mike, any final comment?

Strain: Just to thank Casey for writing the book and to encourage everyone who’s tuning in to buy it, it really is very thoughtful. And these are complicated issues that admit quite a bit of reasonable disagreement. And so I would encourage everybody to read Casey’s perspective on this.

All right. Casey, I didn’t actually give you an official last comment, so this would be your opportunity.

Mulligan: No, I agree with Michael. And Michael, it’s interesting to have the two books side by side. I think you’ll learn a lot more. The sum is better than the parts. The sum is greater than the parts. So this issue is not going away. So it’s worth learning about it and invest in it.

This article was first published by the American Enterprise Institute.

Image: Reuters