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Solimar Research

An Old Slow-Growther Reshapes Himself As Trumpian

William Fulton on
Aug 15, 2016

When Donald Trump announced his team of economic advisors – the first group, the one that was all men – it consisted, not surprisingly, mostly of real estate guys from New York. In fact, there was only one Ph.D. economist in the group: Peter Navarro, a longtime business professor at UC Irvine, who apparently captured Trump’s attention with his book and film, Crouching Tiger, which talks about the possibility of war with China and how to avoid it.

And for those of you with long memories of California growth control wars, yes, we’re talking about that Peter Navarro: The guy who ran for mayor of San Diego in 1992 – and almost won – on an anti-growth platform.

Navarro has been all over the place in defense of Trump’s economic policies lately – for example, with this spirited attack on Moody’s negative analysis of Trump’s economic plan. And while Trump may have stumbled across Navarro’s work on his own, it’s far more likely that he was led to it by Dan DiMicco, the former CEO of Nucor Steel, who’s been Trump’s leading who helped persuade his company to provide financial backing for the film version of Navarro’s book.

So what’s a guy who once ran for office on an anti-growth platform doing as an economic advisor to a real estate developer running for president? As it turns out, this makes more sense than you might think.

At first you wouldn’t think Navarro has much in common with the supposedly business-oriented Trump, but the common theme of Navarro’s thinking has been to use governmental power to create limits and walls, the better to manage things for the benefit of those inside the walls. This was the fundamental concept of 1980s-style California growth management, which often allied left-wing neighborhood anti-growth activists with right-wing anti-immigration activists. And it’s the fundamental concept of Trump’s campaign.

Another way to look at it is simply that Trump and California slow-growthers are win-lose folks, not win-win folks. A lot of economioc theorists -- free-traders, for example, and real-estate development free-marketeers -- believe that the more there is, better it is for everybody. But Trump clearly doesn't believe this. To him, there are always winners and losers -- so you'd better box out the other guy if you want to be a winner or else make him pay through the nose. And the California slow-growthers feel the same way: More development creates losers as well as winners, so you'd better box out the bad development or at least make those developers pay through the nose.

Navarro’s apparently a Democrat, though he has jokingly said that his political party is “economist”. He first emerged in San Diego during the anti-growth backlash to the real estate boom of the late 1980s, when a citizen initiative was adopted limiting the number of housing units that could be built per year – even though previous growth management measures sought to align infrastructure and development.

In spite of the fact that he was a trained economist who taught in a business school, Navarro seemed to me like a pretty typical California anti-growth guy of that era. I first met him at a Realtors forum on growth management in Irvine around that time, and he advocated pretty standard growth control policies. When the real estate folks tried to ask him about “affordable housing,” he waved his hand in the air – as if to swat the topic away – and said, “Separate issue.” By which he meant that, to him, affordable housing was a thing you had to create via government subsidies, not something you could create via the market by reducing regulation.

Navarro ramped it up in 1992 when he ran for mayor. He platform was, again, standard-issue California growth control for the time: limited growth, tying development to infrastructure and services (for example, no additional housing without an increase in police officers) and, tellingly, immigration restrictions. He deliberately rejected the Construction Industry PAC endorsement and finished first in the primary against County Supervisor Susan Golding and City Councilmember Ron Roberts, an architect who was the odds-on favorite (and is now on the Board of Supervisors). But he lost to Golding in the runoff by four points and later lost races for city council and Congress. If he had defeated – and he had managed to navigate the notoriously treacherous political waters of San Diego City Hall (trust me on this one) – he might have been a seminal figure in the history of California planning.

Instead he moved to Laguna Beach, kept teaching at UC Irvine, and focused on providing corporations with assessments of geopolitical risk. Which led him to China and to Trump. He does seem to believe that the United States has to use a lot of military muscle to keep things even with China – and it’s never clear where Trump is on that question – and he does believe in better trade deals and apparently still in immigration reform. He recently argued – a la the supply siders – that Trump’s proposed tax cuts wouldn’t increase the deficit all that much because of the economic growth it would stimulate.

But so far, neither he nor Trump has weighed in on the question of whether the number of housing units should be restricted or tied to the provision of infrastructure and public services. Though it’s kinda believable that they don’t agree on that one.