Passengers wait in a Transportation Security Administration (TSA) line at JFK airport in New York City.
Spencer Platt | Getty Images
Maybe you think taking swipes at the rich in the name of “spreading the pain” is the sole dominion of politicians like Bernie Sanders, Elizabeth Warren, or just the Democratic Party.
But meet your new “punish the rich” crusader: President Donald J. Trump.
The U.S. Department of Homeland Security on Thursday announced the suspension of most of the “trusted traveler” programs, including Global Entry, for New York state residents. That means the Trump administration is moving airport travel hell up the economic food chain.
The Trump team’s reported reasoning is simple: Since New York state’s sanctuary laws for undocumented immigrants limit cooperation with federal immigration enforcement, the Department of Homeland Security had to suspend the program for New Yorkers.
Specifically, acting DHS Secretary Chad Wolf told Fox News on Wednesday that this was forced by the New York law that blocks the state’s motor vehicles department from sharing information with immigration enforcement agencies.
Until now, most rich, upper middle class and urban white-collar workers didn’t feel much of the economic effects of our virtually open border policies. In fact, many richer Americans who run or invest in service industries long enjoyed the benefits that robust legal and illegal immigration brought to their businesses. That includes but isn’t limited to lower labor costs.
Many illegal immigration opponents have long scorned wealthier, non-border state Americans who support more open borders as being in a bubble. This new policy pops that bubble a bit.
Many illegal immigration opponents have long scorned wealthier, non-border state Americans as being in a bubble. This new policy pops that bubble a bit.
That doesn’t mean legal and illegal immigration always hurts the economy. But, as Harvard professor of economics George Borjas has often pointed out, illegal immigration has hurt some Americans much more than others. Years of leaving out those who suffer economically because of illegal immigration on the campaign trail and in the news media created an opening for Trump’s most dominant 2016 election message.
Besides the wage pressures, many Americans living in poorer areas have suffered in other ways because of lax border security. For example, legal Latino immigrants are often the targets of MS-13 gang violence. Overcrowded public schools and hospital emergency rooms near our southern border have never inconvenienced Wall Street executives or their high-income peers.
Of course, this move doesn’t hurt all rich people and not only rich people use the Global Entry program. But it’s at least the second time that the Trump administration has made a move to spread economic or bureaucratic pain to mostly blue state-dwelling upper middle class and rich Americans.
Trump’s 2017 tax reform law hit many of the same people in the wallet. Those tax changes capped many of the State and Local Tax (SALT) deductions high-earning blue state residents long relied on to offset their overall federal tax bills. Instead of reducing their tax rates, many of those blue states went to court to fight that part of the tax law. But that case was dismissed last September and it’s just clinging to life in the appeals process now.
Does Trump hate blue state-living rich people? That’s hard to believe since he, his Treasury Secretary Steven Mnuchin, and chief White House economic adviser Larry Kudlow are all wealthy blue state residents themselves. But Trump has openly expressed his disdain for sanctuary policies and states that drive wealthy citizens and businesses out with higher taxes and numerous regulations.
You can also look at Trump’s decisions on Global Entry and SALT deductions not as attacks on wealthy elites, but as a move to make sure the nation’s burdens are more evenly distributed.
The SALT deductions benefitted higher-income Americans at the expense of lower-income Americans. It also rewarded many fiscally fumbling politicians in blue states by shielding them from voter anger over their state and local tax burdens. With that in mind, shouldn’t the progressives shouting about economic inequality all the time be praising Trump’s tax reform at least some of the time?
Similarly, both Americans who support more open borders and those who oppose them should support a plan that makes sure the rich also feel whatever pain and inconveniences come from illegal immigration. Right?
Don’t worry, no one is under any illusions that we’ll see any bipartisan coming together over the Global Entry suspension or the tax changes.
What we do know is that Trump is establishing a pattern that should work well as he frames his campaign message for the red states and those crucial swing states in the Midwest.
Trump still projects the image of Trump Tower and Manhattan glitz, but that clearly hasn’t stopped him from hitting his own demographic where it hurts.
We all might think that’s a strategy that only works for candidates like Sanders and Warren. But it’s already helped Trump win in the past and may help him win again.
Jake Novak is a political and economic analyst at Jake Novak News and former CNBC TV producer. You can follow him on Twitter @jakejakeny.