Trump nominees Mnuchin, Ross sound reassuring on taxes, trade

Tuesday, December 06, 2016 - Updated: 7:07 AM

As a candidate, Donald Trump put off -- even scared -- many voters when he talked about the economy and closely related issues.

On taxes, Trump offered what sounded like a dreary encore of past Republican tax plans that built off the discredited canard that tax cuts yield more revenue because they spur economic growth. In certain niche areas, starting with capital gains, tax cuts possibly could have this effect, but the GOP supply side theory has gone unproven for too long.

On trade, Trump's repeated broadsides against the North American Free Trade Agreement and the proposed Trans Pacific Partnership offered zero nuance. Instead of making the simple, undeniable point that American leaders needed to do much more to help those whose jobs were outsourced to other nations, Trump often depicted trade with other nations as an open-ended debacle that drained the U.S. of its wealth. That's not remotely accurate. International trade helped America become an economic superpower.

Nonetheless, there was some good news on the economic front last week. The billionaire banker-investors whom Trump has chosen to be treasury secretary and commerce secretary -- Steven Mnuchin and Wilbur Ross, respectively -- face criticism for being from the "swamp" Trump said he'd drain, but they seem to be in much better command of the big picture than the man who chose them.

In their joint interview with CNBC, Mnuchin embraced Trump's call for broad cuts in income and corporate taxes. But Mnuchin also made the case for a simpler tax code -- and made the very specific promise that the amount of taxes that the very rich pay would not go down because the Trump administration would eliminate some of the deductions they use to avoid paying taxes.

Ross, who has a tremendous reputation in the business world for his history of reviving struggling companies, rejected protectionism emphatically, saying what he opposed were "dumb" trade deals built on U.S. concessions to draw more nations into large accords. He made a cogent argument that bilateral trade accords between nations rather than regional trade deals were more likely to clear obstacles to U.S. exports. He said he would target barriers to such exports and challenged the idea that tariffs were the first tool a Trump administration would use against nations with trade rules it didn't like.

Mnuchin, whose resume includes 17 years at Goldman Sachs and producer credits on dozens of Hollywood films, is likely to face barbed questions in his Senate confirmation hearings because of how one of his companies handled foreclosures during the housing meltdown. Sen. Elizabeth Warren, D-Massachusetts, called him the "Forrest Gump of the financial crisis." But if he makes it into office, he could constructively chop away at the tools that 1 percenters use to avoid paying taxes.

Ross seems likely to be less controversial -- but also far more influential than the usual commerce secretary, based on his long friendship with Trump. Given his thoughtful comments on the value of international trade, the fears of Trump launching a globally destabilizing trade war are receding.

Here's hoping the two men build on their strong first impressions.

-- THE SAN DIEGO UNION-TRIBUNE