By Paul Krugman
Opinion Columnist
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 Trump 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 G.O.P. 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.
And 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 actually 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 population 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.
And
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, by the way, 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, however, 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
thing is, 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.
More from Paul Krugman on rural America.
Opinion | Paul Krugman: What’s the Matter With Trumpland?
