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Trump's back-to-the-future economics

Donald Trump's support is sliding after a rough week. Aug. 7, 2016. (CBS Miami)

In what was billed as a major economic address in Detroit today , Republican presidential nominee Donald Trump pitched himself as the fresh-faced outsider who could usher America into a new age of prosperity. "We will offer a new future," he promised, "not the same old tired policies of the past." But despite a few unique wrinkles, including a major new tax deduction for child care, a hefty dose of protectionism and a promise to close a tax loophole for hedge fund managers, it could easily have been lifted from a Ronald Reagan campaign: Cut taxes (especially on the rich), cut regulations and watch the economy boom.

The speech was notable in the sense that it demonstrated Mr. Trump's willingness to go along with many of the basic policies of House Speaker Paul Ryan — for example, Mr. Trump scrapped his earlier proposals for new, lower income tax brackets and adopts those of the House GOP, and he called for lower corporate income taxes and the elimination of the estate tax. But there was a powerful amnesia built into Mr. Trump's rhetoric, as if nothing had changed in America, much less the global economy, in the last 36 years. The budget deficits that first started ballooning during the Reagan administration are a central preoccupation of the Ryan Republicans, but they got virtually no mention in Mr. Trump's prescription for big tax cuts and big spending. Other than a vague promise that he would "make America great again especially for those who have the very least," Mr. Trump made little direct reference to the growing income inequality that even conservative economic thinkers (Mr. Ryan included) have started to cite as a top concern.

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Instead, Mr. Trump argued that the only thing standing between us and a return to the post World War II industrial economy was the incompetence of our leaders on taxes, regulations and trade. By contrast, he painted a picture of American-made cars on the roads, American-made jets in the sky, American-made ships on the seas, American-made steel girding our skyscrapers and American-mined coal powering our homes and factories. Granted, he was speaking to the Detroit Economic Club, so a few paeans to American manufacturing are to be expected, but the overarching promise was consistent with the vein of nostalgia that runs through Mr. Trump's appeal to those working class voters left behind by the 21st Century economy. What he is promising is, to borrow another Reagan-era metaphor, a back-to-the-future economic policy.

But the days when all that was needed to provide for a family was a high school diploma and a factory job are long gone, and they're not coming back. Even if Mr. Trump could negotiate better trade deals, we will never see anything like the old Sparrows Point steel mill again. It's not a question of tariffs, it's a question of technology, a globalized economy and advanced supply chain logistics. Abolishing the EPA and forgetting about climate change wouldn't reopen all the coal mines of Appalachia; cleaner fuels are now simply too abundant and cheap. Mr. Trump is absolutely right that the economy isn't working for the average American the way it once did, but tossing together a mishmash of Reaganomics and populist rhetoric isn't the answer.

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None of that is to say that Democratic presidential nominee Hillary Clinton has provided all the answers either; she has a lot to explain about how her policies will restore the promise of the American middle class. As the most recent jobs figures show, there is much to be encouraged about in President Barack Obama's economic record, which Ms. Clinton says she will build upon. But despite low unemployment, overall economic growth has been slow by historical standards, and virtually all income gains in recent years have gone to top earners. Something needs to change.

Ms. Clinton provides pieces of the answer in calls for a higher minimum wage and efforts to make college affordable for all. But what's needed is an overarching framework for how all Americans can succeed in an increasingly competitive, automated, globalized economy. Ms. Clinton will have her chance to provide it Thursday when she, too, travels to Detroit to give her own economic address.

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