OPINION:
For decades, our markets have been propped up with gimmicks. President Biden mastered the art of injecting malarkey into key economic indicators through loose fiscal policy, government hiring sprees and cheap, illegal labor.
The COVID-19 panic set off an unprecedented $6 trillion expansion in the money supply. Uncle Sam handed out freshly printed greenbacks to make up for shutting down factories and shattering supply chains. After the crisis passed, however, pandemic-era spending levels remained, triggering inflation. People had more money on paper, but each dollar bought fewer goods and services.
U.S. workers demanded higher wages, but businesses were broke. So, Mr. Biden invited the entire world to sneak across our border, and they filled the roles for less. A 2023 study by the Center for Immigration Studies found the labor participation rate of U.S.-born workers declined by 1.9 million as the number of immigrant workers jumped by 2 million. In the statistics, this appears to be low unemployment.
The Department of Government Efficiency revealed that 2.1 million noncitizens were granted Social Security numbers in 2024 alone to perpetuate the scheme that President Trump is now ending. Besides closing the border and slashing federal expenditures, he is rebuilding domestic industry.
“It’s a national security issue,” Commerce Secretary Howard Lutnick said on CBS’s “Face the Nation.” “We need to make medicine. We need to make semiconductors. We need to make ships. We need to have steel and aluminum. We need to have the greatness of America built in America.”
Already, Mr. Trump’s tariff policy has brought 50 nations willing to reduce import barriers for U.S.-made products to the table. Cambodia, India, Israel, Taiwan and Vietnam are the closest to striking deals.
The pledge by India, the world’s most populous nation, is significant, but the true target of Mr. Trump’s radical policy is China. The Chinese Communist Party uses slave labor — sometimes figuratively, often literally — to flood U.S. markets with cheap goods that have made it impossible for U.S. firms to compete.
That’s why Mr. Trump won’t zero out any tariffs. As Mr. Lutnick explained, China is savvy enough to ship its products through countries with zero tariffs. Beijing’s leaders are looking for a way out despite the tough talk. The public might start demanding greater economic and religious liberties if the struggling Chinese economy falters. The unrest threatens President Xi Jinping’s grip on power.
Wall Street is equally afraid of a trade war between the superpowers. U.S. markets nosedived Thursday and Friday, with the Dow Jones Industrial Average down 13% since the inauguration.
Democrats, on the other hand, are thrilled. They believe economic calamity is their ticket to winning the midterm elections. Yet, history cautions against wishful thinking. Nine months into President Reagan’s first term, uncertainty about his policies sent the Dow tumbling 12%. The bear market continued into 1982, with pundits predicting a “bloodbath” for Republicans. By the time the Gipper left office, long-term prosperity drove the Dow skyward with 147% overall growth.
Mr. Trump’s vision is more ambitious than Reagan’s. He wants to bring back America’s industrial base so Americans can have real prosperity built on jobs that offer abundant goods and services. Cheap energy from our abundant oil and gas reserves will fuel the expansion.
These elements will take time to align, but time is a commodity Mr. Trump does not have with midterm elections 18 months away. Unless the wins start coming fast, the political party currently rooting for America to fail will have a chance to block this high-risk, high-reward agenda.
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