President Donald Trump has significantly reshaped the American economy through higher tariffs, tax cuts for wealthy Americans and the removal of business regulations. Critics say his policies are gutting U.S. industry, worsening income inequality, enabling business exploitation and damaging the natural environment. Trump supporters argue that the same measures will strengthen domestic industry, create jobs and expand economic freedom.

Trump has also enriched himself through the presidency by roughly $2 billion, according to the source interview—far more than any previous president.

To discuss the long-term economic consequences of the Trump administration, Alternet spoke with Dr. Justin Wolfers, a non-resident senior fellow at Brookings and the Peterson Institute and a professor of economics and public policy at the University of Michigan. Wolfers has contributed to The New York Times, helped write economics textbooks and co-hosts the Think Like an Economist podcast with Betsey Stevenson, a former chief economist at President Barack Obama’s Labor Department and an economist at the Ford School of Public Policy at the University of Michigan.

The interview was lightly edited for clarity, context and length. The original article is available at Alternet.

How Trump is damaging the U.S. economy

ROZSA: You once said the central question economists should examine is what makes some countries rich and others poor. Which Trump policies do the most damage to America’s long-term growth, as opposed to producing only short-term effects?

WOLFERS: I think that is exactly the right question. Too much commentary focuses on what GDP will be next month, next quarter or next year. For most people, what matters is the set of opportunities available throughout their lives and the opportunities they leave for their children, grandchildren and future generations.

Many partisans have been disappointed because policies that appear very bad have not yet shown up in terrible economic statistics. That is correct: They have not produced terrible economic statistics. There are weaknesses, to be sure, but those predicting economic catastrophe have not found overwhelming support in the data.

The reason is that the overall thrust of Trumpism has been to undermine institutions that are foundational to American prosperity. I think the real damage will be visible over decades, not quarters or years.

That longer time horizon also changes what readers should watch. The interview’s argument is less about a single economic report than about whether democratic institutions, legal rules, market competition and predictable policy remain durable enough to support investment, innovation and opportunity over time. Those effects are difficult to capture in short-term GDP figures, but they are central to Wolfers’ measure of long-term prosperity.

The foundations of American prosperity include democracy, the rule of law, competition in markets rather than at Mar-a-Lago, engagement with the rest of the world and respect for the law. Almost all of those principles have come under some degree of attack from the administration.

This is a revolutionary rather than a conservative political moment. Trump and Trumpism are revolutionary, not evolutionary, in a “tear it all down” sense.

Tearing everything down can make sense if you believe the existing world is not working for you. It might be a reasonable response to a failing economy. But the United States is one of the richest economies in the world. Tearing it down means dismantling the foundations that created that immense prosperity.

The specific example I would give is January 6. I think it was the single worst day in recent American history. Democracy is foundational to prosperity. Democracy is how we choose the people who run our economy, and it is how we remove them when they fail to deliver. If we walk away from democracy, the people who do not deliver can remain in power. That could mean not merely bad policy for the next four years, but bad policy for much longer.

A functioning democracy is therefore central. There are important questions of democratic theory, and I do not want to diminish them. But I want to make the additional argument that democracy is also fundamental to prosperity.

ROZSA: Would you say Trump is keeping Americans poor in the long term?

WOLFERS: I would say he has tilted the balance toward fewer future opportunities than Americans would otherwise have.

ROZSA: In other words, keeping Americans poor long term.

WOLFERS: No. “Keep Americans poor”—what does poor mean? The country of my birth, Papua New Guinea, is poor. America is rich. If we manage the economy well, the economy my children inherit could be unbelievably rich. If we manage it poorly, it will not grow. Even then, we would still have reasonably high standards of material well-being.

I do not want to use an absolute term such as “poor.” What I fear is that my children will grow up in a world where they do not realize that an invention could have been developed here, that jobs could have existed here or that forms of prosperity could have existed that they will never see.

ROZSA: I think that is a valid point. You essentially reminded me to check my privilege as an American when comparing Americans’ circumstances with those of other people.

WOLFERS: I did not mean to hector you. Economists like to be somewhat precise about language.

ROZSA: I did not think you were hectoring me. You raised a valid point. I would rather live in America’s economy than Papua New Guinea’s economy.

WOLFERS: Right. Right.

Understanding Trump’s key economic legislation

ROZSA: You called the One Big Beautiful Bill the largest redistribution of money from poor to rich in a single bill in American history. How do you measure that, and how do you respond to Trump supporters who say lower business taxes increase investment and eventually raise wages?

WOLFERS: First, I want to credit my friend Brendan Duke, who first developed the analysis behind that claim.

Measuring redistribution in a bill is not especially difficult. You look at who receives the tax cuts and where the spending cuts fall. The One Big Beautiful Bill contained tax cuts primarily aimed at wealthy people—almost as if its authors could not find middle-class Americans except when looking for spending cuts. The reductions affecting programs such as Medicare and SNAP were very large.

It was therefore an anti-Robin Hood bill. Some earlier bills included tax cuts for the rich; that is what the Reagan bills did. Other bills included spending cuts for poor people. But none included both at this scale.

I do not think it is remotely debatable that this was the largest single redistribution from poor to rich. If it was not the largest redistribution from poor to rich in American history in a single bill, someone would have told me about a bill with larger effects by now. No one has. No one in public discourse has said that claim is false. It remains literally uncontested.

Personal profit and the effects of crony capitalism

ROZSA: Does Trump and his family personally profiting from holding office have trickle-down effects that harm ordinary Americans?

WOLFERS: Yes, but not in the way you might think.

If Trump becomes $1 billion richer in a country with 340 million people, even if he took the money directly from the Treasury, that would amount to about $3 per person. That is not very much. It simply reflects the fact that one person’s profits are small relative to an enormous economy.

But I think the problems are much deeper. The basic idea of a market economy is that you and I compete. If I can bring goods to market at a lower price than you, people will buy from me rather than you. If I can create higher-quality goods, people will buy from me rather than you.

The problem with corruption involving the Trump family—and not all of it meets the legal definition of corruption, although some of it meets the standard English-language definition—is that it changes the basis of competition.

If the best way for me to get ahead is to go to the White House bearing gifts, after which the administration passes a rule banning you from competing with me, then the basic dynamics through which competition and markets produce good outcomes for ordinary people are broken.

A company chief executive would then spend less time trying to create products at lower prices, outcompete rivals or develop new and better products. Instead, that executive would spend more time and energy at Mar-a-Lago trying to win the president’s favor. Bad products would win. Expensive products would win.

Consider the contrast between Tim Cook’s role at Apple and Steve Jobs’ role at Apple. Steve Jobs was Apple’s chief executive before the Trump administration. He was deeply involved in product innovation, and Apple was one of the world’s most innovative companies.

Then Trump came to power and Tim Cook became Apple’s CEO. When you see Cook now, you do not see him huddled with engineers or designers trying to create the perfect phone; you see him at Mar-a-Lago or the White House trying to flatter the president.

Cook’s job description is no longer “create better and cheaper products for consumers.” It is “appease the White House so that it will allow us to import goods we need from trading partners abroad, so that it will not regulate against us,” and so on.

I tell the Tim Cook story not because he is the only example, but to illustrate the problem that arises when capitalism shifts from a system centered on market competition to one centered on relationships and crony relationships.

This is often called crony capitalism. Many of your readers may be somewhat to the left and not particularly enamored of markets, and that is fine. But whether you like or dislike capitalism, crony capitalism is worse.

You can see this throughout the economy. One reason the president uses tariffs is that they are a presidential power. When you visit the White House, the president might carve out an exception for your company, industry or country. If he does so without acting in the best interests of the American people, he is designing an economy that is less competitive and serves Americans less well.

ROZSA: That reminds me of a quotation from President Grover Cleveland. In 1894, he argued that protectionist tariffs create a “communism of pelf,” with “pelf” being an archaic term for immoral money. Does that observation still apply 132 years later, including to Trump?

WOLFERS: I use different language, but I agree with the sentiment. If a president has the power to make or break a company or industry and exercises it unpredictably and idiosyncratically, in response to flattery and favors, while advancing his narrow political or personal interests rather than the interests of the American people, that creates an enormous distortion that harms ordinary people.

Trump and the Republican Party

ROZSA: Has the Republican Party forfeited its traditional role as an advocate for free markets by allowing the Trump administration to behave this way?

WOLFERS: I have many Republican friends. My Never Trump Republican friends still believe in the party of Reagan, Bush or Romney—a party committed to capitalism, markets and trade, and in many cases to immigration. They grieve for their party and are trying to fight for it, but they are currently losing.

You gave me a red-meat statement. I love red meat, but I do think the party of Trump—the MAGA party—is not your father’s Republican Party. It is not committed to the freedoms my libertarian friends favor, nor to the view held by many economists that markets often produce efficient outcomes.

It is the most interventionist party of my lifetime. The old critique of Democrats was that meddling with the economy made it inefficient. This president has interfered in the economy to a greater degree, more frequently and more idiosyncratically than any other president in my lifetime.

Comparing Trump with Bush, Obama and Biden

ROZSA: When you compare Trump’s administration and economic policies with those of his immediate 21st-century predecessors—George W. Bush, Barack Obama and Joe Biden—what are their strengths and weaknesses?

WOLFERS: I will start with a strength. Something clearly led to the current moment: the belief among some people that the economy was not working for them. That anger produced the tear-it-down MAGA movement.

I do not agree with tearing everything down, and I do not agree with the movement’s economic policies. But I think we should think very seriously about the primal scream of pain from people who felt that economics and politics had become detached from their everyday lives. The president was able to understand, hear and tap into that sentiment.

One of the greatest weaknesses is that the president has deeply idiosyncratic views. I generally think the average judgment of a group of experts is a better guide than the instincts of one older man.

Many of the president’s instincts have been made worse by extremely weak implementation. There can be a reasonable argument about whether tariffs are good or bad. I do not like them, although I respect people who believe they can be productive in specific times and places.

What I am certain of is that an incoherent tariff regime that changes from day to day and week to week, moving up and down and in and out with the president’s mood, is a terrible idea. That is a judgment about the competence with which economic policy is executed rather than about the underlying ideas.

The question of competence is profound. We frequently see announcements of new economic policies that suggest the administration has done less homework than I would do before preparing to lecture my Economics 101 class at Michigan.

That level of competence or incompetence is a serious problem. Many of the economic ideas are simply wrongheaded. They show a failure to understand key ideas and lessons from economics and history, as well as a refusal to engage with them coherently.

Part of the problem is that the president has surrounded himself with an extraordinarily weak staff. An idiosyncratic president can appoint a strong staff and listen to evidence when it exists. I do not see that happening at the moment.

ROZSA: If you had to compare Trump with Bush, Obama and Biden, how would you do it? I am asking you to rank them, although I would understand if you did not want to give a one-two-three-four ranking.

WOLFERS: No, that is easy. He is the worst president of my lifetime.

ROZSA: How would you compare Bush, Obama and Biden with him? I want that contrast.

WOLFERS: That is much harder because they faced very different challenges. My partner served in the Obama administration, so of course I am going to be pro-Obama; those people were my friends.

Obama took office during a global financial crisis. Biden took office during a global pandemic. Bush had to deal with 9/11. History does not tell us how Obama and Biden would have handled 9/11, how Bush and Biden would have handled the financial crisis, or how Bush and Obama would have handled the pandemic.

Those are probably the most important questions for each presidency. I do know how the Trump administration handled the COVID pandemic, and I thought it was an immense failure.