It’s been interesting to read the commentary of the left and the right regarding President Trump’s first year. While they disagree on whether Trump has improved the country, they do seem to agree that his economic policy changes have been very consequential. I believe they are both wrong.

Let me start with the left. While I share their strong antipathy for Trump, I think it’s a mistake to let that judgment color one’s perception of the recent tax bill. The tax bill is significant, but far less so than you’d imagine from some of the overwrought criticism.

1. Let’s start with the personal income tax reforms. There is some simplification, as many more taxpayers will be able to use the standard deduction. On the other hand, there’s some added complexity in the new deduction for “pass through” businesses. On net I am slightly encouraged by the bill, as I see it as a first step toward eliminating deductions from the tax code. But we still have a long way to go.

The distributional consequences of the tax cut are not very important. The top rate comes down a bit, but that’s offset by the fact that state and local taxes can no longer be deducted. Some of the tax cuts benefiting lower income people are scheduled to expire, but almost no one thinks that will happen.

2. The estate tax exemption was doubled, but this threshold has been rising very rapidly for many decades. It’s a change, but hardly revolutionary. Recall that the House bill called for its elimination.

3. The big corporate income tax cut is the single most significant provision. But even President Obama favored a rate cut to 28%. This excellent WSJ article shows that even after the federal corporate tax rate is reduced to 21%, the total corporate tax rate (including state taxes) is in the middle of the pack for developed countries. It was inevitable that the US would eventually move the rate down to meet global competition—hardly a revolutionary change.

I also think Trump’s GOP supporters exaggerate the success here. Because the “temporary” cuts are likely to get extended, the deficit numbers will end up even worse than advertised. But let’s suppose I’m wrong and the cuts are temporary—what then? Most likely, the next time the Democrats take power they’d raise taxes on the rich (including investment income), which will largely negate the benefit of having a lower corporate tax rate.

That’s why I keep going back to the tax simplification; it’s one of the few areas where the changes are likely to be accepted by the Dems. But the GOP did not address the tax deductibility of health insurance, far and away the worst aspect of the tax code.

I also think the regulatory changes have been greatly exaggerated by some GOP pundits. First, there are not many areas where deregulation can move the needle on real GDP growth, and the GOP has not touched those areas. The big two are health care and zoning. The GOP is afraid to deregulate health care in a way that would slash costs, and zoning is mostly a local issue. Occupational licensing is another area crying out for deregulation, and also an area mostly controlled by state and local governments.

If you look at areas where the Federal government is heavily involved, the moves have often been in the wrong direction. On issues like the drug war, the war on terror, trade, immigration, etc., Trump has very interventionist instincts. Regulations have increased in a number of areas. Energy is a mixed bag, with some deregulation, but also a recent proposal that would massively increase government regulation of coal and nuclear, and impose enormous costs on consumers. This proposed regulation is opposed by experts on both sides of the spectrum, and will be decided upon in January.

On the plus side, there’s been some useful deregulation in labor markets, education and the internet. I’m less keen on moves in areas like finance and the environment, as the GOP seems unable or unwilling to come up with alternative approaches to address problems such as moral hazard and externalities.

I don’t know if the net effect of all this is more or less regulation, much less more or less aggregate utility, but it’s very unlikely to change trend RGDP growth by even 0.1%. (Especially since some of the better moves have set aside Obama-era regulations that had not yet been implemented.) Tax reform might be a bit more effective, but you’d need a radical shift to a consumption tax to have a truly dramatic impact on growth.

To summarize, I see little evidence to support the claims of either the Democrats or Republicans. The tax bill is certainly not revolutionary, although it does have some useful reforms. But it also boosts the budget deficit, which is bad for investment. There has been increased regulation in some areas and reduced regulation in others. In addition, there have been no significant moves to slow the growth in overall government spending. The Libertarian Party only got about 3.3% of the votes in the 2016 election, so it’s no surprise that the GOP decided not to try to implement a libertarian policy regime.

From my perspective, the fact that Trump was unprepared to be President turned out to be a plus in terms of economic policy, as he had to rely on the GOP establishment, which has better policy instincts than he had—or at least better than the policies he campaigned on. (BTW, don’t take this as an endorsement of being unprepared; we’ll have to see how things work out in foreign policy.)

This post is consistent with my long held view that people vastly overestimate the consequences of individual politicians. For instance, I think it very likely that President Carter would have fired the air traffic controllers if he had been re-elected in 1980s. He knew the world was rapidly moving in a neoliberal direction, and that his economic policies were ineffective. He also knew that he was perceived as being weak. The 1981 air traffic controller strike would have been greeted as a golden opportunity to establish that he would not be pushed around any longer, and that we had to take some painful medicine to get inflation under control. (Yes, you and I know that labor unions had nothing to do with the inflation problem, but Carter didn’t know that.)

Almost every developed country moved in a neoliberal direction after 1980 (regardless of whether they were ruled by the left or the right), there is almost no chance that the US would have been an exception.

PS. Nothing in this post should be taken as a defense of Trump, who may well be the worst president in US history. But if he is horrible, it’s not because of his economic policy moves in 2017, which are mixed bag, but rather due to other aspects of his performance.