Will Trump’s Tax Victory Lead to Historic Defeat?
By Chris Kutarna
Donald Trump and the Republican Party are pushing a hefty ($1.5 trillion) tax cut through the US congress.Democrats are up in arms, because it will make the rich richer at the middle class households' expense.Deficit hawks are up in arms because it could add $1 trillion to the US national debt over the next decade.Parliamentarians are up in arms because, despite the Bill's awesome implications, there've been no debates, no public consultations and no hearings on the Hill.
Trump is triumphant, because it gives him a big win to gloat about on Fox & Friends and a legislative legacy for the history books.They're all missing the big picture. Society and the economy are transforming in ways that make the Left vs. Right debate about the proper size and role of Government pointless.
Higher taxes won't save the middle-class from automation. And lower taxes won't save today's corporations from obsolescence.
The big picture
The world is shifting out of the Industrial Age and into the Knowledge Age. Granted, the shift is happening at different speeds in different places, but it is happening.
The purpose of the economy is shifting from growth to sustainability. The nature of money and markets is shifting from centralized to distributed.The basis of national economic competitiveness is shifting from production to learning. And data is becoming a basic input of economic growth, alongside land, labour and capital.
Trump's bet, apparently, is that the best thing the US Government can do is stand idly by (or, better, play golf).The US Government already spends less on education and science—i.e., on the future—as a share of the economy, than at almost any other time in history.
His tax plan will cut those investments even lower. An unfettered US private sector, Trump implies, will figure out fastest how to re-assert American Industrial leadership in a Knowledge Age.Private sector path-finding-Maybe he's right. Exhibit A for private sector path-finding: Elon Musk. Driverless cars. Space travel.
Energy storage. Hyperloops. "A blend of financial laboratory, corporate labyrinth and buttock-clenching thrill ride, Musk Inc has pushed the boundaries of what was thought possible," noted The Economist.But Musk is by far the exception. The vast majority of today's companies, American and otherwise, have dropped anchor rather than brave the biggest storms in living memory.
One data point: Investment in IT as a share of GDP, after rapidly rising between 1950 and 2000, began to fall in the early 2000s (as the authors of a pessimistic new book I'm reading at the moment, The Innovation Illusion, point out).Most companies will not invest their Trump tax windfall into building a brave new future. Their habit, rather, is to hoard the cash or give it back to
Betting against Trump?
The alternative view is that to shift a country's economy out from the Industrial and into the Knowledge Age will require collaboration—and leadership—from all sectors of society, including Government.
That is the bet China is making. China has recently announced Made In China 2025, a $300 billion Government stimulus aimed at helping Chinese industry to leapfrog past the United States in ten high-growth, high-technology industries.These include new energy and electric vehicles, new information technology (like 5G cellular), industrial robots, wide-body aircraft and space vehicles, autonomous ships and agriculture, bio-pharmaceuticals and next-generation medical devices.
The knee-jerk critique from free-marketeers is that Government shouldn't "pick winners." But that critique oversimplifies how China decided its 2025 agenda.Policy-czars in Beijing consulted extensively with academics, experts and private companies to finalize a list of ten high-growth, high-profit, high-leverage opportunities in science and technology.
This is Beijing's moonshot. The country's political leadership is signalling to Chinese university and private sectors: Here is the agenda to make sure that China sets foot first in the Knowledge Age.
Help us get there, and you can expect strong policy and financial backing. And those sectors are quickly aligning behind the bold vision.Beijing's argument is that these technologies aren't simply commercial opportunities—they are key to China's ambitions for global leadership in the 21st century future.
Global leadership in artificial intelligence may become a "master technology" to accelerate scientific, economic, and social progress.Leadership in electric cars will dramatically reduce air pollution.
Leadership in agriculture science could improve living standards and food security for billions of persons. Leadership in genomics and bio-sciences could improve population health and worker productivity, and lower public health costs.Better transport technologies will speed up the domestic economy and help China control major global trade routes.
Who will win the future?
Will Trump's $1.5 trillion tax cut (which shrinks federal funding for science and education) help American science and industry to achieve similar goals—faster?Such policy seems less like leadership, and more like fatalism. I won't be surprised if, when the history of the 21st century is written, those with a bold vision for a new world surpass those without one.
Solution must be acceptable to Tamils Separate State is not a reasonable request - Former Army Commander, General Gerry De Silva RWP, VSV, USP
- UN damns Lanka 14,000 minors in childcare centres Calls for urgent reforms
- Russia restricts Lanka tea over beetle scare Top-level delegation off to Moscow
- Call to criminalize marital rape Justice Ministry seeks Cabinet approval
- Jumbo killings Armed protection unit to be set up Fines, jail terms to be increased
- Crossovers loom prior to polls
- SC issues notice on Elections Chief
- Jilted SLFP shuns JO forever
- CEB TU threatens strike Gives 18th as ultimatum
- Gnanasara Thera’s request for foreign travel denied
- Chinese envoy says OBOR will take Sino-Lanka ties to new level
- Police Chief in pre-poll warning Errant officers will be dealt with strictly
- Court extends Stay Order on Gota case
- Sriyani as State Minister of PCs and LG JO crossover pledged support for MS
- Rains to prevail Landslide warning to Galle, Kalutara to be reviewed
- BJP lauds ‘Ram Setu’ findings Hits out at critics
- Two held for impersonation at exam centre
- Female Genital Mutilation Advice sought from medical experts
- Hambantota Port to China India raises security concerns
- Indian Air Force Chief at passing out parade
- Statement from the Embassy of the State of Palestine
- LG Governance first to collapse in N&E
- Asgiriya Secy criticizes Govt
- Namal’s Hello Corp case on 13 December
- Attanayake’s foreign travel request Court to consider on 4 Dec
- Drugs & alcohol abuse in NE Religious reps to address issue
- Interesting battle at Havelock Park
- Thurstan win inaugural golf tourney
- History making Pulisic US men’s footballer of the year
- Knicks down Nets despite early exit for Porzingis
- 34th Mercantile Individual Tournament 2017 McLarens shuttlers Overall Champions
- Retired Hewitt takes tilt at Aussie Open doubles
- Lamborghini World Final 2017 Malagamuwa finishes third
- Committee clears Thilaka as SL coach
- Basnayake uncontested president at SLCF
- Premier League Club Cricket Primosh scores second ton
- Vinod and Taniya win Junior golf titles
- Taveesh wins two Gold medals
- Austin Waugh, in Australia's U-19
- CH come back to win
- Smith foils England again
- Emphatic win for CR
- No Malinga in T20 squad
- ‘Singer Trophy’ Under-19 Cricket Paceman Bandara steers Kingwood
- Federer voted BBC overseas sports personality of the year
- SLC looking to re-launch showpiece T20 league
- Astron wins again at SLIM NASCO 2017
- NDB brings Santa to the doorstep
- Com Bank opens branch No. 259 in Yatiyantota
- Amãna Takaful relocates Matale Branch
- Lotus Tyres rewards sales agents
- DFCC Bank sponsors 2017 Inter-School Golf Tournament
- Huawei announces Christmas promotion
- Elephant House recognized by Interbrand
- Singer (Sri Lanka) partners with Pan Asia Bank
- Disney deal suggests the Tax bill may mean little for the economy
- Commonwealth Bank admits failures in money laundering case
- Japanese business confidence hits 11-year high
- Eurozone economy to grow at faster rate, says Central Bank
- SEC to mandate dual roles for CEOs & Chairmen
- Alumex to commence EU & Aus exports
- Fiscal Policy Act remains toothless: Governor
- Samantha Rajapaksa gives up all AMW posts
- 'Publish excuses for corporate governance non-compliance'
- Jetwing Symphony IPO oversubscribed
- Shares recover from an 8-month low
- Christmas cheer is in the air!
- So, this is Christmas!
- A Time of Gifts Winding up
- Landmine deaths soar in 2016 With record number of child victims monitors
- Unravelling Nietzsche’s ‘death of God’ mystery
- Canada’s pivot to China hits a snag
- Brexit: The UK’s four options
- When the heart calls out, on a starry night
- On eve of climate summit Macron reminds Trump of ‘responsibility to history’
- FGM/FGC Victims speak out
- Wigneswaran sowing seeds of communalism
- SLFP supports devolution of power – Lasantha Alagiyawanna
- If Bond scammers are not prosecuted…President will lose his credibility –Bandula Gunawardena
- All information security issues are not cyber crimes
- We want a change in Muslim representation– Hasen Ali
- Blessed are the peacemakers
- Disinformation campaigns and public mistrust
- Alleged human rights violations Lord Naseby defends Sri Lanka
- Neecha Dosha of planets and how it is cancelled Neechabhanga Rajayoga
- Vastu defects and bathrooms
- Are you endowed with Pancha Maha PurushaYoga?
- God Aiyanayake: Guardian Deity of Jungle and Village
- Good thoughts eliminate bad planetary influence
- The Disaster Artist: The (un)making of a movie
- Our children and our cinema
- INTERPRETING ASIAN CINEMA: CHALLENGES AHEAD
- How Sanskrit journalism is slowly hogging headlines
- ice manufacturing in South Asia
- CMSC’s season finale concert
- Two documentaries on Sri Lanka in Film South Asia 2017
- Politics of nostalgia
- Kite Surfing Lanka Kalpitiya An experience of a lifetime
- Ella and mini Adam’s Peak
- A cave of history -Ravana Cave
- Silvia Senanayake Dazzles at Mrs. Asia International
- Let’s Taco Colombo
- THE WRITER’S KITCHENNETTE MULLED WINE
- Hunger gnaws at Rohingya Children in camps
- Defeating IS Russia has ‘accomplished’ task
- Saudi Princess Ameera Aidan fights sex exploitation
- Hacking into the gate
- Review: A Bad Moms Christmas Relatable holiday humour
- A must watch superhero film!