Sometimes the most boring questions yield the most striking answers.
During a lengthy interview in the Oval Office with the Wall Street Journal, President Trump said several eyebrow-raising things: He claimed the decision to close a CIA weapons program in Syria was “made by people, not me,” predicted that Anthony Scaramucci was “going to do amazing” in a job he was fired from mere days after the interview was conducted, and referred to Jared Kushner as a “good boy.”
But it was a seeming softball — the Journal asking Trump what he felt a “reasonable” corporate tax rate would be — that yielded the highlight of the interview: a borderline incomprehensible ramble about Trump’s conversations with the leaders of several Asian countries. He barely addresses the substantive question at all.
For example, Trump expresses his surprise at the population of two countries, Indonesia (264 million) and smaller Malaysia (32 million). He even suggests that he quizzes the leaders of those countries about their size during head of state phone calls: “You call places like Malaysia, Indonesia, and you say, you know, how many people do you have?”
Here is the question and Trump’s full answer. I have omitted nothing:
WSJ: What do you think is a reasonable corporate rate? We’ve heard 20 percent, but...
PRESIDENT TRUMP: Well, you know, we’re going for 15 (percent). We’re going to see, and we’ll see. But, you know, I don’t want to say anything about negotiation. I mean, we are asking for 15 percent, and we think we’re going to grow tremendously.
So I deal with foreign countries, and despite what you may read I have unbelievable relationships with all of the foreign leaders. They like me. I like them. You know, it’s amazing. So I’ll call, like, major ‚ major countries, and I’ll be dealing with the prime minister or the president. And I’ll say, how are you doing? Oh, don’t know, don’t know, not well, Mr. President, not well. I said, well, what’s the problem?
Oh, GDP 9 percent, not well. And I’m saying to myself, here we are at like 1 percent, dying, and they’re at 9 percent and they’re unhappy. So, you know, and these are like countries, you know, fairly large, like 300 million people. You know, a lot of people say – they say, well, but the United States is large. And then you call places like Malaysia, Indonesia, and you say, you know, how many people do you have? And it’s pretty amazing how many people they have. So China’s going to be at 7 or 8 percent, and they have a billion-five, right? So we should do really well.
But in order to do that — you know, it’s tax reform, but it’s a big tax cut. But it’s simplification, it’s reform, and it’s a big tax cut, 15.
The point, inasmuch as it’s possible to find one, is that the president believes America’s GDP growth should be closer to China’s. The difference is that China is a developing economy, which is growing rapidly as its economy modernizes — a phenomenon called “convergence” or “the catch-up effect” by economists. The United States, by contrast, is already fully developed and thus far wealthier on a per capita basis. This level of wealth is what China is trying to reach.
Put another way, no amount of tax policy change is going to make the US economy grow as fast as China’s in sheer percentage terms.
But let’s not get too caught up in the details here. The main takeaway is that Trump’s answer to a basic question about his administration’s policy is stream-of-consciousness blather that a) doesn’t really answer the question, b) betrays clear ignorance of how economies work, and c) manages to imply that he asks offensively basic questions during phone calls with major nations. It’s hard to believe this is the US president talking, but here we are.