Trump’s economic instincts are Jacksonian (and that is bad)

How would Jackson feel about his number one fan?
How would Jackson feel about his number one fan?
Image: Reuters/Kevin Lamarque
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President Trump’s economic ideas can be hard to label. Often he sounds like your basic neoliberal, denouncing taxes and regulations as unnatural burdens on market magic. Hence his first budget and fresh attacks on Obamacare. On the other hand, he won much of his Rust Belt support by condemning free trade and just pulled out of the Paris Climate Accord, citing the need to protect blue-collar jobs and American “sovereignty” from international norms.
We might see these positions as in conflict, but Trump does not. For this President is less moved by economic ideas than he is by economic instincts. Even compared to the last Republican in the White House, he avoids theory and evidence, shooting and tweeting from the hip and the gut. He knows what he knows and acts accordingly.

Oddly enough, Trump has made clear that some of those deep convictions come from Andrew Jackson, the President from 1829 to 1837.We thank you for your service,” Trump wrote in a beyond-the-grave message this March. “We honor your memory. We build on your legacy and we thank God for the USA!” He has literally surrounded himself with images of Jackson, re-arranging the portraits in the White House so that no one can escape Old Hickory’s hard stare.
What, then, were the economic instincts—and legacies—of Andrew Jackson?

Born poor and fatherless along the Carolina frontiers, Jackson cut his teeth imposing the unpopular rules of Atlantic commerce over remote places. As a lawyer and judge during the 1790s, one of his major tasks was to enforce the Contracts Clause of the U.S. Constitution (Article I, section 10), which forbade (and still forbids) states from helping debtors against creditors. He spent much of his time serving Tennessee settlers with court orders: pay up, or else we sell your farm at auction. For him, economic “justice” meant prompt repayment, period.

In this sense, Andrew Jackson was a frontier version of Alexander Hamilton, the Federalist wunderkind whose stock keeps rising on Broadway. Both sought to reassure the “capitalists” of the world—they used that word—that the United States was a safe business environment, not a radical republic. But Hamilton paired these conservative rules with larger plans for economic development, helping the United States emerge as a semi-coherent nation. A generation later, the more patriotic (that is, anti-British) John Quincy Adams pushed for domestic advances in education and science while also cooperating with British-led efforts against the slave trade.

Jackson would have none of it. Any effort to soften micro-economic rivalry or foster macro-economic outcomes was “corruption,” he believed. Any regulation on “enterprising commercial adventures” was a betrayal, an insult, an intolerable burden on his very own “sovereignty.” Just before the War of 1812, which made everyone forget his economic views, Jackson threatened to burn alive a federal agent who required him to obtain a passport for any slaves he was transporting through Choctaw lands. “Are we free men or are we slaves?” he seethed.

Jackson learned to temper his words while running against Adams in 1828. He drew support for his principled stand against political corruption along with his unmatched record of patriotic violence. But his economic instincts never changed, and they always said the same thing: open more frontiers for commercial exploitation, and then let “the people” chase more lands, more slaves, more profits. As such, his main priority during his first term was the deportation of tens of thousands of Cherokees, Creeks, Choctaws, Chickasaws, and Seminoles from the southern states.

The result? Thousands of ordinary white people did find new homes in Mississippi, Alabama, and Georgia, advancing what Jackson called the “growing greatness” of America. The biggest winners, though, were wealthy planters who set their slaves to growing cotton. This cotton, in turn, made its way to Britain, whose merchants offered new lines of credit to the fast-spending Americans. Jackson’s dismantling of the Second Bank of the United States during his second term added to the chaos, since the federal government could no longer draw bad bills out of circulation.

The Jackson administration also insisted on cutting deficits, briefly retiring the central government’s debt in 1835. In the face of federal austerity, state governments turned to foreign investors to pay for the roads, canals, and railroads that their people wanted. The sum of state debts thus surged nearly 700% during Jackson’s two terms, much of it due in London.

>When cotton prices fell and British credit tightened in 1837, the every-man-for-himself boom gave way to five years of hard times. Desperate debtors found no solace from Jacksonian courts and judges, often fleeing to Texas to escape their creditors. In the 1840s, Jackson’s successors turned that state into the next cotton-and-slave frontier. And so it went until the Civil War.

The parallels with our own times are striking, if only because Trump thinks they are. He assumes that market competition sorts the winners from the losers, and that the government is there to enforce the results. Indeed, he loves the state when it inflicts a frontier kind of “law and order,” that is when it kills or punishes or forecloses. What he hates is any effort to treat the American population as an interdependent economy, to say nothing of a caring society. What he wants is to replace the very notion of a common good with the enormous appetites of men like him, which will make America “great” at the expense of everyone else.

In the 2010s more than the 1830s, such instincts are bad news—not just for most Americans, but for the rest of the world too. For today, the continued exploitation of new frontiers threatens not only vulnerable minorities and economic stability but also the human capacity to survive on this planet. One way or another, the time for Jacksonian economics will end.