Apple’s announcement Wednesday that it will repatriate most of the estimated $274 billion that it holds in offshore earnings is great news for the United States. Uncle Sam will get a one-time $38 billion tax payment. The company promises to add 20,000 jobs to its U.S. workforce, a 24 percent increase, and build a new campus. Another $5 billion will go toward a fund for advanced manufacturing in America.
C’mon. What’s with the long face?
In December this column warned that hysterical opposition to the Republican tax bill was a fool’s game for Democrats that could only help President Donald Trump. Yes, there were things to dislike in the legislation, from both a liberal and a conservative perspective.
But it was not the moral and fiscal apocalypse its critics claimed. And its central achievement – a dramatic cut in corporate rates to 21 percent from 35 percent – was an economic no-brainer that many Democrats, including President Barack Obama, had supported (albeit less steeply) just a few years ago.
Apple will not be the only multinational that will soon bring back gigantic profits to take advantage of new low repatriation rates. Microsoft holds $146 billion in overseas earnings, Pfizer $178 billion, General Electric $82 billion, Alphabet $78 billion, and Cisco $71 billion, according to estimates from the Zion Research Group. The total stash is about $3 trillion – by one measure nearly three times what it was just a decade ago.
Assume that just half of that money comes home to the United States. It’s still the equivalent of Canada’s entire gross domestic product. Not too shabby, especially considering all the hyperbolic predictions of economic doom that went with Trump’s election.
“The global financial destruction that will happen under President Trump has already begun.” That was a headline in London’s Independent newspaper on Nov. 9, 2016. Those whom the gods will mock, first they make pompous economic forecasters.
It’s worth thinking carefully about why Trump’s critics have been so wrong about the economy, and of the damage their hubris does to the anti-Trump case.
Democrats entered the 2016 election cycle on what they thought was the back of a strong economy. It wasn’t. Barack Obama presided over the weakest expansion in postwar history. The economy grew by 15.5 percent from the second quarter of 2009 to the second quarter of 2016. During the (slightly longer) Reagan boom of 1982-90, it grew by more than 38 percent. The failure to understand this meant a failure to appreciate the depth of American discontent. It helps explain how Hillary Clinton lost her unlosable election to a man whose central claim to office was that he understood business.
More recently, Democrats have convinced themselves that Trump is merely the beneficiary of Obama’s economic legacy. But how can the critics who previously assured us that Trump’s election would cause certain calamity now explain that he’s nothing but a lucky bystander to forces beyond his control? Had the economy tumbled over the past year his critics would surely have blamed him. It’s ill grace to deny him all credit when it’s doing so well.
The truth is that it’s hard to account exactly for why the economy does well or poorly from one year to the next. But it’s also true that the president has been nothing if not aggressive in his efforts to remove regulations, cut taxes and promote American businesses (not least his own), and animal spirits on Wall Street have responded accordingly.
Also true is that Americans will generally give credit for a good economy to whichever president presides over it. Yet one gets a distinct sense that Trump’s relentless critics would rather bury the Apple news or look for the cloud within the silver lining. This is not a good look. If making confident but lousy predictions is one form of political malpractice, wanting things to fail is another.
The same goes for the government shutdown. Democrats are placing a large bet that it’s a political showdown they can win. But what they are mainly doing is wrecking their chances of retaking the House or Senate by appearing to put the interests of DACA’s immigrant “Dreamers” ahead of the rest of America.
How that helps Dreamers, Democrats, Americans or anyone other than the president and maybe California Sen. Kamala Harris is anyone’s guess.
Donald Trump is a profoundly defective person who nearly every morning does grave political self-harm with no assistance from his opponents. But he is also president, and normal Americans – that is, those who hold the outcome of the next election in their hands – do not want him to fail. They want statesmanship, not schadenfreude.
Wouldn’t it be smart of all of Trump’s opponents to show they are superior to him in the former? And wouldn’t a good way of doing that be to abjure the latter, even if it sometimes means giving him some credit?