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Trump’s Fantasy Capitalism

How the president undermines Republicans’ traditional economic arguments

Illustration by Anastasia Vasilakis

After suffering one humiliating failure after another this year, Republican lawmakers are attempting to get their agenda back on track with a campaign to cut taxes. But once again, they may find in Donald Trump a less-than-effective advocate for their goals. Not because Trump’s views are inconstant—though they are. Not because Trump is a fair-weather friend—though he is. No, Trump may prove a liability on tax reform because he exposes, more clearly than ever before, the fantasy that undergirds the Republican approach to the economy. Indeed, not since Teddy Roosevelt has the GOP had a leader whose views are more corrosive of the virtues of money and the value of markets.

Already, Republicans have all but abandoned one of their traditional hobbyhorses: the need to reduce the debt and the deficit. Despite the fact that the GOP tax plan would add some $2 trillion to the national debt, Republicans have barely batted an eye. The truth is, being in the red is something the GOP raises concerns about only when Democrats are in power, as an argument against spending on social programs. “It’s a great talking point when you have an administration that’s Democrat-led,” GOP Representative Mark Walker said recently. “It’s a little different now that Republicans have both houses and the administration.”

The other justification Republicans offer is what John Kenneth Galbraith called “reactionary Keynesianism.” Cutting taxes, the argument goes—particularly at the high end—will put money into the hands of the investor class, who will use that money to create jobs and grow the economy. Today, it’s harder than ever to swallow this argument. The main effect of tax cuts since Ronald Reagan has been to increase inequality, not growth. Capital is now swimming in capital; were an influx of cash to the one percent all that the economy needed to grow, we’d have seen a massive increase in GDP over the last decade. Even figures like Bruce Bartlett, who helped promote the idea of supply-side economics as a domestic policy adviser to Reagan, has since renounced the theory. “Virtually everything Republicans say about taxes today is a lie,” Bartlett asserted recently.

But there may be an even deeper problem with this argument: Trump himself. The reactionary Keynesian believes government should put cash into the hands of the investor class because they are the most talented, visionary, and worthy. We know they are worthy because they are rich; the market wouldn’t have rewarded them if they weren’t deserving of reward. Markets discipline everyone, the idea goes, imposing obstacles and challenges that only the very best can overcome. But Trump tells a completely different story.

Trump, it hardly need be said, is no critic of capitalism. He champions property and profit, and celebrates wealth—especially his own. Capitalism is more than an economic system for Trump. It is a space of revelation, the place where men announce and disclose who they are—winners and losers, successes and failures. “The dollar always talks in the end,” Trump writes in The Art of the Deal, still a kind of Rosetta Stone to Trump’s rise and rule. What men make of themselves in the market, and what the market makes of them—these are the things that matter about capitalism. It is the consummate mode of identity politics, the ultimate truth-teller.

What is the truth that it tells? In contrast to what the reactionary Keynesian would have us believe, men of great wealth aren’t really all that. Trump likes to deal, he writes, with “the sharpest, toughest, and most vicious people in the world.” But men with money, he’s come to realize, aren’t actually so sharp, tough, or vicious. Rich people “have a very low threshold for even the mildest discomfort,” Trump writes. They’re like the son of Conrad Hilton. Conrad was a bruiser who built an empire. His son, by contrast, is “a member of what I call the Lucky Sperm Club.” He inherited wealth and power; his ascension “had nothing to do with merit.”

Because so many men of the market are wimps and weaklings, competition doesn’t yield the best results. In a competitive market, firms and entrepreneurs are forced to offer their best wares at the best prices. But when so many men are so mediocre, the deck is stacked in favor of operators who can manipulate consumers, giving those buyers the illusion of finery rather than the reality of quality—operators like, well, Trump. “The final key to the way I promote is bravado. I play to people’s fantasies,” Trump writes. “A little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole.” There is no stable or credible reality in Trump’s economy. It’s all spectacle, diversion, exaggeration, make-believe, daydream, pipe dream, imagination.

Even when it comes to his own fortune, Trump’s economy is built almost entirely on wish and whimsy. Consider this remarkable exchange between Trump and an opposing attorney in a 2006 lawsuit:

Trump: My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings....

Attorney: Let me just understand that a little bit. Let’s talk about net worth for a second. You said that the net worth goes up and down based upon your own feelings?

Trump: Yes. Even my own feelings, as to where the world is, where the world is going, and that can change rapidly from day to day. Then you have a September 11, and you don’t feel so good about yourself.... So yeah, even my own feelings affect my value to myself.

Attorney: When you publicly state what you’re worth, what do you base that number on?

Trump: I would say it’s my general attitude at the time that the question may be asked. And as I say, it varies.

Ronald Reagan, champion of our current market order, wasn’t immune to fantasy capitalism. At the height of the worst recession since the Great Depression, Reagan said, “You know, there really is something magic about the marketplace when it’s free to operate. As the song says, ‘This could be the start of something big.’ ” The market was magical for Reagan because it turned wish into fulfillment, fantasy into reality, nothing into something.

Trump’s market, by contrast, begins with nothing and ends in nothing. “If you ask me exactly what the deals I’m about to describe all add up to in the end, I’m not sure I have a very good answer,” he writes in The Art of the Deal. There’s an emptiness, even nihilism, to Trump’s market order. It’s not efficient, productive, or meritorious. It’s just a game in which the object is to have fun. “If it can’t be fun,” Trump writes, “what’s the point?” Profit-making is like gambling; the only difference is that businessmen “dress in blue pinstripe suits and carry leather briefcases.”

Trump’s final vision of capitalism, then, comes perilously close to what John Maynard Keynes warned against in 1923: “No man of spirit will consent to remain poor if he believes his betters to have gained their goods by lucky gambling.” Any suggestion to that effect, Keynes concluded, would “strike a blow at capitalism.”

That doesn’t mean we should expect a socialist uprising anytime soon—particularly not from Trump’s supporters, who are now the target of his “truthful hyperbole.” In fact, the latest fantasy Trump is selling is that the GOP’s economic agenda will actually benefit anyone other than the one percent. “Tax reform will protect low-income and middle-income households, not the wealthy and well-connected,” Trump vowed. “It’s not good for me, believe me.” This despite the fact that 80 percent of the proposed tax cuts would benefit the wealthiest Americans.

Still, it would be a mistake to see Trump’s cynical approach to the economy as entirely peculiar to him. Since the end of the Cold War, there’s been a steady drumbeat of dissatisfaction on the right with the culture of capitalism. Usually it was confined to the margins—failed candidacies like that of Pat Buchanan—or to the utterances of intellectuals. “The trouble with the emphasis in conservatism on the market,” William F. Buckley Jr. told me in 2000, “is that it becomes rather boring. You hear it once, you master the idea. The notion of devoting your life to it is horrifying, if only because it’s so repetitious. It’s like sex.” Irving Kristol, the godfather of neoconservatism, complained to me that conservatism “is so influenced by business culture and by business modes of thinking that it lacks any political imagination.”

With Trump’s victory, that boredom and impatience, that refusal to believe that capitalism is the alpha and omega of the good society, has arrived in the White House. “A country’s more than an economy,” Steve Bannon has insisted. “We’re a civic society.” Trump is happy to enrich the one percent—himself included. Not because he truly believes that the rich are the most deserving, or because he believes they will create jobs and drive economic growth. But simply because, to him, the economy is a game, and he likes to win.