Reading Project 2025, part 8: redoing the economy and what it means for higher education

How might a likely second Trump administration impact higher education?  How can academics plan for and anticipate that major event, should it occur?

This week we continue our reading of Project 2025, a key document in understanding the near- and medium-term future of American politics.  This is an online, open, and distributed reading and anyone can participate. Here’s a post explaining how it works.  You can find all of our Project 2025 posts here.

In today’s post I’ll summarize this week’s reading, concluding the section on “The Economy,” all on pages 717-823.    I’ll draw out the bits which bear directly on higher education. Next I’ll add some reflections and then several discussion questions.

Please join in with comments below, or elsewhere across social media (just let me know where, so I can include them in the next post).

Summary overview

With this section the book continues to work through the federal government’s economic agencies and functions. Our reading takes us in a series of short chapters from the Export–Import Bank of the United States, a federal export credit agency (ECA), to the Federal Reserve system, the Small Business Administration (SBA), and the general, even vexed question of trade policy.

We start with Veronique de Rugy, who calls for a new administration to abolish EXIM.  She charges the entity with playing business favorites under the guise of industrial policy, as well as failing to achieve net economic gains for the nation.  In addition, de Rugy finds EXIM having very little impact on American exports (“on average, 98 percent of exports are not backed by EXIM financing”, 720) and criticizes it for not doing enough to compete against China.

In response, Jennifer Hazelton argues that the Chinese economic threat is enormous, driven by that nation’s very well supported ECAs. Other countries, including US allies, have doubled down on their export assisting programs in order to compete, and America should follow suit by enhancing EXIM, “a powerful tool in America’s asymmetrical warfare toolbox.” (727)

After EXIM, Project 2025 moves on to the Federal Reserve, which Paul Winfree thinks has experienced mission creep.  While the Fed’s initial charter was to stabilize the American currency, its remit later grew to be “responsible for maintaining full employment, stable prices, and long-term interest rates.” (733) It should also cut back its lender of last resort function and reduce its financial holdings.  Winfree contemplates returning the nation’s banking system to earlier historical practices, such as pre-Civil War “free banking” and going back on the gold standard.  He would also remove the Fed’s work on environmental, social, and governance (ESG) topics.  Interestingly, Winfree warns against any federal entity advocating for a central digital currency. (741)

Next up is the Small Business Administration (SBA), which Karen Kerrigan criticizes for too often committing “waste, fraud, and mismanagement of taxpayer dollars.” (746) Kerrigan also sees SBA as skewing its offerings to “‘disproportionately impacted,’ politically favored, or geographically situated small businesses and entrepreneurs,” plus targets chosen for inclusivity reasons. (749) The author wants intensive review of COVID-era loaning to detect and punish fraud.  She would also have the SBA reduce disaster support to businesses and individuals, in favor of their going to the private sector for insurance. (750)

Project 2025 moves on to explore questions of trade policy through another split pair of chapters.  Peter Navarro contributes a chapter calling for what he calls “fair trade,” or a mix of increased tariffs and financial decoupling, especially aimed at China. He criticizes the World Trade Organization, charging its most favored nation (MFN) policy with exploiting Americans unfairly.  He duns China for

continued economic aggression, which begins with mercantilist and protectionist trade policy tools such as tariffs, nontariff barriers, dumping, counterfeiting and piracy, and currency manipulation. However, Communist China’s economic aggression also extends to an intricate set of industrial policies and technology transfer–forcing policies that have dramatically skewed the international trading arena.

Navarro continues by slamming outsourcing for costing Americans jobs. (767) In response he wants Congress to pass a bill proposed but not passed in the Trump years, the United States Reciprocal Trade Act (USRTA), which would give the president authority to raise tariffs on nations which levy high tariffs on American goods. He offers results of two simulations runs to model how such a law might play out, and finds both growing American jobs. Navarro focuses on China as a threat to American security and the economy, and concludes the only policy response worth doing is to decouple the two nations’ economies in detail. (787-790) He concludes by listing the political appointees most important to staff in a new administration. (794-5)

In response to this call for “fair trade,” Kent Lassman makes the case for free trade, arguing that increased global trade would improve every nation’s economy, including America’s.  Lassman also wants progressive policies removed from trade: “attempts to use trade policy to advance whole-of-government initiatives on climate, equity, and other issues will fail for the same reason that a hammer cannot turn a screw: It is the wrong tool for the job.” (796) Lassman’s main argument is for a conservative administration and Congress to reduce tariffs and to increase trade relations with friendly nations, including through using “fast-track” Trade Promotion Authority rules. (800ff) Interestingly, this chapter calls for a successor to the WTO (which “may be mortally wounded”) “that is open only to liberal democracies” – i.e., excluding China.

Against China, Lassman doesn’t advocate any economic action.  Instead, he wants a new government to:

Strengthen diplomatic pressure (in concert with allies) against Beijing’s abuses. Encourage cultural and intellectual engagement with the Chinese people, remembering that blue jeans and rock ’n’ roll helped to win the Cold War… So did images of fashion and prosperity in American movies and television shows like Dallas.

What does all of this mean for higher education?

This week’s reading doesn’t do much with academia.  There is one exception, however. Peter Navarro sees Chinese students and researchers studying or otherwise working in American universities and other institutions as a security and economic threat. “Every year, more than 300,000 Communist Chinese nationals attend U.S. universities.”  More,

Huawei, well-known within the American intelligence community as an instrument of Chinese military espionage, has partnered with the University of California–Berkeley on research that focuses on artificial intelligence and related areas such as deep learning, reinforcement learning, machine learning, natural language processing, and computer vision, all of which have important future military applications.28 In this way, UC–Berkeley, whether unwittingly or wittingly, helps to boost Communist China’s capabilities and quest for military dominance. (785-6)

It’s also worth noting that the impacts of such policies on the American economy would have downstream effects on colleges and universities in terms of how campuses respond to recessions or economic growth, how state governments respond through budgeting for public universities, and how donors and other supporters react via their gifts and assistance.  Further, any changes to the economy obviously impact the job market academic graduates enter, which entails changes to how campuses prepare students for that world.

Reflections

It’s interesting to see Project 2025 change its unitary approach with this week’s readings, which feature two pairs of enthusiastically contradictory chapters. I infer this represents an ability for Heritage and Trump veterans to come to a consensus on the Export-Import Bank and, more significantly, on trade policy.

Otherwise, these chapters follow the book’s practice of expressing consistent themes: opposing DEI, shrinking some government functions, the greatness of private enterprise, and competing with China (Navarro seemingly can’t write “China” without adding the “Communist” prefix).

The book so far has touched on various forms of conservative populism. In this week’s reading there were several examples, as when the Federal Reserve chapter charged that institution with making “a transfer to Wall Street at the expense of the American public.” (735) More significant, I think, is Navarro’s critique of offshoring as costing domestic jobs. He also sees “multinational corporations and big-box retailers” as villains for opposing one tariff-like tax. (782-3)

Technology has been a prominent concern throughout the book, usually cast in a positive light, but appears more ambivalently here.  For example, Kerrigan wants to increase funding for small business technological improvement (750, 755) but Winfree warns against creating a central digital currency (noted above).

I’m interested in how COVID haunts Project 2025. This week’s chapters often mention federal programs which supported businesses during the pandemic, and often (but not always) approve.  Navarro notes the brutal impact the coronavirus had on America’s economy.

Questions

1. Does the split over trade policy offer any advantage to opponents?
2. How would the policy changes expressed in this week’s chapters impact your professional and personal lives?
3. Do you see Trump as likely to attempt what this week’s reading describes?
4. How might the world change if these global policies take effect?
5. If you oppose what these three chapters call for, what opposition strategy and tactics would best resist it?
6. Having read this far, what do you anticipate from the end of the book?

…and that’s it for this week’s reading.  For next Monday, September 16, we’ll wade into “Independent Regulatory Agencies” followed by the final section, entitled “Onward!”  That’s all on pages 825-887, and with that will end our entire reading.  I might add a post summing up our study to date.

Please do comment in the boxes below this post.  If you’d prefer to share your reactions on other platforms, tag me or otherwise let me know about those comments so I can include them in our next post.  If you want to respond but are worried about what people could make of your reactions, feel free to contact me here without the web knowing.

Comment away!  And on to the final tranche of Project 2025.