AEI Scholar and Director of Economic Policy Studies Michael R. Strain contributed to the Dispatch’s Symposium titled Economic Policy Experts: Doom, Thy Name Is Populism, as a group of experts outlined the many ways in which either potential administration’s populism could lead to poor policy and worse economic outcomes. Below is a section from Michael R. Strain contribution.
Donald Trump has promised to lead the “largest deportation” effort in U.S. history if voters return him to the White House in November, and his advisers are reportedly hard at work drawing up plans to execute this goal. But an abrupt and intrusive effort to deport hundreds of thousands (or even millions) of undocumented immigrants would significantly disrupt businesses. The labor shortages it would create would put upward pressure on the prices of many goods and services—fresh produce, hotel rooms, restaurant meals, etc.—and could potentially spark an inflationary wage-price spiral that the Federal Reserve would have to stop, putting at risk the longevity of the current economic expansion.
The long-term consequences of Trump’s posture toward immigration could be even more damaging. The former president has consistently demonized immigrants, even declaring in recent months that they are “poisoning the blood of our country.” Trump is effectively hanging an “immigrants need not apply” sign on the Statue of Liberty. But diminishing America’s status as the destination of choice for many of the hardest working, most risk-tolerant, and most ambitious foreign-born people in the world is an act of significant economic self-sabotage.
By attacking the integrity of elections and international alliances, Trump chips away at the foundations of long-term prosperity. This is of heightened concern following the events of January 6, of course, and also because the next president will take office with land wars raging in Europe and the Middle East, as well as growing geopolitical tensions in East Asia.