October 23, 2018 / 8:24 PM / a month ago

Breakingviews - Top Trump economic aide sells last of credibility

White House Council of Economic Advisers Chairman Kevin Hassett addresses reporters during the daily briefing at the White House in Washington, U.S. February 22, 2018. REUTERS/Jonathan Ernst

NEW YORK (Reuters Breakingviews) - Kevin Hassett is an economist who might have proved a champion of reason – and reasoning – in President Donald Trump’s administration. He has blown it with a report from the Council of Economic Advisers, which he chairs. It’s a thinly veiled political tilt at the economic straw man of socialism, issued just days before America’s midterm congressional elections.

“The Opportunity Costs of Socialism” bears a White House seal but is filled with rhetoric more suited to a Trump rally. “Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse,” the opening line asserts. A few Democrats, like Senator Bernie Sanders and New York City House candidate Alexandria Ocasio-Cortez, adopt the democratic-socialist mantle but they are on the fringes of a party fielding scores of former prosecutors and military veterans as candidates in the midterms – and running ahead in the polls overall. 

The report paints everything from government-funded healthcare, as practiced in Canada and much of Europe, to mass appropriation of private property, as in Venezuela, as socialist policies. It recites at length the horrific failure of farm collectivization in Stalin’s Soviet Union and Mao’s China.

That history is deployed to tarnish Democrats calling for single-payer healthcare, including Sanders by name. Republicans have tried to repeal the Affordable Care Act, President Barack Obama’s expansion of insurance coverage, but that has backfired with the public. A recent Reuters/Ipsos poll found more than two-thirds of respondents would support extending Medicare, the federal healthcare program for seniors, to all Americans.

Moving to Scandinavian-style universal healthcare would reduce GDP by 9 percent, or about $7,000 per person, the report claims. Left unaddressed, among other things, are the economic costs of ranking 33rd in the world for life expectancy, behind genuinely socialist Cuba, and 37th in the efficiency of the healthcare system, behind Costa Rica, according to the World Health Organization.

The CEA was created after World War Two to provide the president with economic guidance for policymaking. Hassett initially embraced that role, telling Congress last year that free trade and immigration could boost the economy. Within months, though, he was backing his boss’s trade tariffs and saying tax cuts would pay for themselves. Now he has laid out his pitch to move from economics to Trump’s campaign team.

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