Not long ago, one of us was having lunch with someone who manages a multibillion-dollar fund when the subject turned to the prospect of a second Trump term.
This person was disturbed by many of Donald Trump’s actions and concerned about what the November presidential election could mean. But when it came to one issue — the economy — he was untroubled. “We didn’t do so badly last time,” he said. “There are some things I don’t agree with, but I don’t think it will matter that much.”
We fear this is an increasingly common view. We’ve spoken to many leaders in business and finance who, when it comes to economic policy, are open to the premise that Mr. Trump is a normal presidential candidate.
We strongly disagree. The two of us have been involved in business, government and policy for many years, with more than a century of experience between us. We’ve worked with elected officials and business leaders across the ideological spectrum. And we believe a straightforward assessment of Mr. Trump’s economic policy agenda — based on his public statements and on-the-record interviews, such as the one he recently conducted with Time magazine — leads to a clear conclusion.
When it comes to economic policy, Mr. Trump is not a remotely normal candidate. A second Trump term would pose enormous risks to our economy.
At a time when our country was already on an increasingly risky debt trajectory, Mr. Trump’s tax initiatives during his presidency added an estimated $3.9 trillion to the national debt, according to Brian Riedl of the Manhattan Institute. Mainstream analyses concluded that the result — increasing demand in an already full-employment economy while having a negligible effect on business investment — added very little benefit in the shorter term and virtually nothing in the longer term.
And Mr. Trump’s second-term agenda would further harm our fiscal picture. A Committee for a Responsible Federal Budget report said that extending the 2017 tax cuts alone would add another $3.9 trillion to the federal debt and increase our debt-to-G.D.P. ratio by approximately 10 percent. This would probably lead to higher interest rates and greater inflation while undermining business confidence and could reduce our resilience in the face of future national-security or economic crises.
Mr. Trump would also reduce legal immigration at a time when our economy needs additional workers at all skill levels. Companies are already moving some operations outside the United States in order to find needed employees. Ordering the military to deport millions, as he has threatened to do, would not only lead to widespread social instability but also fail to approach the issue of undocumented workers in a way that meets our economic needs.
On trade, raising tariffs across the board — as Mr. Trump has repeatedly promised to do — would increase prices for American producers and consumers, reduce our global competitiveness and most likely lead other countries to retaliate against our exporters.
On regulation, while many business leaders have differences of opinion with President Biden, a second Trump term would pose considerable risks. Mr. Trump has made clear that his regulatory approach would not be driven by cost-benefit analysis, in which potential social and economic benefits are weighed against potential concerns. Instead, he has said he would use regulation to reward loyalists and punish perceived enemies.
In his term, Mr. Trump personally directed the Justice Department to block a merger between AT&T and Time Warner because he was reportedly unhappy with the coverage of him on CNN, which was owned by Time Warner. In a second term, he’s promised to take this approach further, for example, by pledging to reward political allies in the oil and gas industry by throttling renewable energy, one of the world’s fastest-growing industries and one in which we are in fierce competition with China.
Trump would also take unprecedented action to diminish the independence of the Federal Reserve, pressuring it to set interest rates for his short-term political gain rather than the long-term health of the economy. A top Trump economic adviser, Peter Navarro, predicts that Mr. Trump would fire the Federal Reserve chairman in the first 100 days of his second administration. Other allies have said that Fed decisions should be subject to consultation with or even approval by the administration. Such actions could do great damage to our markets and to our economy by politicizing Federal Reserve Board interest rate decisions and undermining the broader credibility of the Fed.
Mr. Trump has said he would like to withdraw from NATO obligations and has threatened to abandon our allies in Europe if they are attacked. Such threats would immediately shake confidence in America’s defense commitments and could embolden our adversaries to act in hostile ways, increasing global instability that threatens our supply chains and our markets and increasing the risk of armed conflict. Of course, if Mr. Trump were to follow through on these threats, the damage would be far worse.
The rule of law is an essential underpinning of our economy. Mr. Trump’s proposed plans would undermine the rule of law in multiple ways, including using the F.B.I. and the Justice Department to target his adversaries, probably doing the same with the I.R.S., firing United States attorneys if they refuse his order to prosecute his political enemies, using his pardon power to immunize political allies from the consequences of lawbreaking and continuing to reject the fairness and freedom of our elections.
Mr. Trump would also fill his cabinet and senior staff with people whose primary qualification is loyalty to him. In such a scenario, the White House and federal agencies would be expected to make decisions not on the policy merits but in order to satisfy Mr. Trump’s ego, anger, whims, personal business interests and political vendettas.
Nor would Mr. Trump and his allies stop there. They plan to replace up to 50,000 civil servants — nonpartisan professionals such as safety inspectors, researchers and procurement experts — with political loyalists. This may even include requiring current federal employees to take a loyalty test.
When it comes to managing crises — an essential component of any president’s economic stewardship — Mr. Trump’s term paints a troubling picture. As the pandemic spread across the United States, Trump bungled the response with indecision, erratic behavior and a focus on politics over the public well-being. Economic damage from the pandemic was inevitable. But a more effective leader could have substantially limited that harm.
Even the Trump administration’s greatest success in combating Covid, Operation Warp Speed, is now barely mentioned by him because of political pressures. There will inevitably be economic, geopolitical or other crises, and Mr. Trump’s reactions to Covid provide a deeply troubling view of how he would deal with them.
Some argue that many dire predictions raised at the start of Mr. Trump’s term did not come to pass. But he has expressed regret that his term was less radical than he would have liked — and has promised that his second term would be nothing like the first. From 2017 to 2021, Mr. Trump, while extreme in many respects, was constrained by key appointees who came from the traditional conservative establishment and by the need to appeal to the business community as he sought re-election. If he wins this November, he’s made clear that he’ll choose appointees who will be submissive to him, and he will have no looming re-election campaign providing an incentive to curb his most extreme impulses.
Nearly every element of Mr. Trump’s second-term agenda would create great risk of economic harm. In aggregate, there is a high likelihood that his agenda would lead to chaos and unpredictability, including global instability, in that way reducing investment and business activity. Meanwhile, inflation would be increased by tariffs, immigration restrictions and larger fiscal deficits.
Some may feel that we made it through one Trump term and are thus likely to make it through another. But a more apt analogy is that after we survived one round of economic Russian roulette, Donald Trump is asking us to take another spin — only this time with many more bullets in the chamber.
That would be a very dangerous game.
Robert E. Rubin is a senior counselor to Centerview Partners and was the U.S. Treasury secretary from 1995 to 1999. Kenneth I. Chenault is the chairman and managing director of General Catalyst and a former chairman and chief executive of American Express.
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