Dan Mitchell of Center for Freedom and Prosperity article “Interpreting the Election Results”

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Interpreting the Election Results

For what it’s worth, my presidential prediction for 2020 will probably turn out to be more accurate than my presidential prediction for 2016.

But I doubt anyone cares about that. Let’s instead look at what happened last night (and, in some cases, what is still happening).

President

It appears that Biden will prevail in the battle for the White House when the dust settles, but you can see from this Washington Post map that the race was much closer than most people expected (Pennsylvania is expected to shift to Biden as mail-in votes are counted, and perhaps Georgia as well).

If that’s the final result, here are two obvious takeaways based on where a president has a lot of unilateral power.

Other policy areas generally require agreement between the executive branch and the legislative branch, so we can’t know the impact of a Biden presidency without perusing congressional results.

Senate

In my humble opinion, the big news of the night is that Republicans appear to have retained control of the Senate.

If true, that means some left-wing goals are now very unlikely.

There won’t be any court packing. There won’t be any serious effort to increase the number of Democratic senators by granting statehood to Washington, DC, and Puerto Rico.

But let’s focus on the economic issues. Here are some quick takeaways.

House of Representatives

It appears that Republicans will gain seats, which is contrary to all expectations.

That being said, there’s zero possibility of a GOP takeover, so Nancy Pelosi will remain in charge.

Ballot Initiatives

I wrote two weeks ago about this election’s six most important ballot initiatives.

The great news is that taxpayers scored a big victory by defeating the effort to get rid of the flat tax in Illinois an replace it with a so-called progressive tax. Winning that battle probably won’t rescue the Prairie State, but at least it will slow down its march to bankruptcy.

The other five battles mostly were decided correctly – at least based on the latest vote margins.

  • California voters rejected an initiative that would allow the state to engage in racial discrimination.
  • The California initiative to weaken limits on property taxes is trailing.
  • The Colorado initiative to lower the state’s flat tax appears prevailed.
  • The Colorado initiative to strengthen TABOR (the state’s spending cap) is leading.
  • The one clear piece of bad news is that an Arizona initiative to impose a big increase in the top income tax rate appears likely to prevail.

What’s the future for Trump and Trumpism?

Regular readers know I want the GOP to be the Party of Reaganrather than the Party of Trump.

So I will be very interested to see whether Trump’s apparent defeat means Republicans go back to (at least pretending to favor) conventional small-government conservatism.

That will have the be the topic of a future column.

A Silver Lining for Republicans

The party controlling the White House usually loses mid-term elections. For recent examples, Democrats won the House in 2018 and there were big victories for the GOP in 2010 and 2014during the Obama years.

In all likelihood, Republicans will now do much better in the 2022 midterm election with Biden in the White House instead of Trump.

A Silver Lining for Taxpayers

It’s not something that can be quantified, but congressional Republicans will now become much better on spending issues. They’ll no longer face pressure to go along with Trump’s profligacy and they’ll have a partisan incentive to oppose Biden’s profligate agenda.

P.S. Whether you’re happy or sad about the election results, remember that it’s always appropriate to laugh at the clowns and crooks in Washington.

President Reagan, Nancy Reagan, Tom Selleck, Dudley Moore, Lucille Ball at a Tribute to Bob Hope’s 80th birthday at the Kennedy Center. 5/20/83.

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Dan Mitchell is very good at giving speeches and making it very simple to understand economic policy and how it affects a nation. Mitchell also talks about slowing the growth of government and he gives credit to Clinton and Reagan.

Probably my favorite subject that Dan has covered is the Laffer Curve. I got a chance to hear Arthur Laffer speak at Memphis St University in 1981 and Laffer actually predicted what would happen in the next 7 years because of the Reagan Tax Cuts and all of his predictions came true. What did we learn from the Laffer Curve in the 1980′s? Lowering top tax rate from 70% to 28% from 1980 to 1988 and those earning over $200,000 paid 99 billion in taxes instead of 19 billion!!!! The funny thing is that the world saw what we did and followed along. The drop of the industrialized countries during this same time was 26% (from 68% to 42% on average). It reminded me of Milton Friedman 1980 book “Free to Choose” and his answer to the 11% inflation that President Carter was dealing with in 1980. Reagan put Friedman’s solution into action and 5 years later inflation was under control.

Below is a fine article and video from Dan Mitchell.

(R Row, from front to rear) Milton Friedman, George Shultz, Pres. Ronald Reagan, Arthur Burns, William Simon and Walter Wriston & unknown at a meeting of White House economic advisers.
(R Row, from front to rear) Milton Friedman, George Shultz, Pres. Ronald Reagan, Arthur Burns, William Simon and Walter Wriston & unknown at a meeting of White House economic

I’ve narrated a video that cites Economic Freedom of the World data to explain the five major factors that determine economic performance.

But that video is only six minutes long, so I only skim the surface. For those of you who feel that you’re missing out, you can listen to me pontificate on public policy and growth for more than sixty minutes in this video of a class I taught at the Citadel in South Carolina (and if you’re a glutton for punishment, there’s also nearly an hour of Q&A).

Cato Institute Senior Fellow Daniel J. Mitchell

Published on Apr 2, 2012

Cato Institute Senior Fellow Daniel J. Mitchell speaks to cadets economics and conservatism. This is the 10th lecture in the seminar series titled “The Conservative Intellectual Tradition in America.”

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There are two points that are worth some additional attention.

1. In my discussion of regulation, I mention that health and safety rules can actually cause needless deaths by undermining economic performance. I elaborated on this topic when I waded into the election-season debateabout whether Obama supporters were right to accuse Romney of causing a worker’s premature death.

2. In my discussion of deficits and debt, I criticize the Congressional Budget Office for assuming that government fiscal balance is the key determinant of economic growth. And since CBO assumes you maximize growth by somehow having large surpluses, the bureaucrats actually argue that higher taxes are good for growth and their analysis implies that the growth-maximizing tax rate is 100 percent.

P.S. If you prefer much shorter doses of Dan Mitchell, you can watch my one-minute videos on tax reform that were produced by the Heartland Institute.

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