Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

17 November 2016

Working with Trump

1. Marginalizing Bannon
2. Attracting skilled workers
3. Theory versus practice
4. Maintaining perspective
5. Specific programs

Donald Trump may have a foul mouth and some hard-right tendencies. His attitude toward women is adolescent and unacceptable. But notwithstanding analogies made by me and others, he differs from Adolf Hitler in two critical ways.

First and foremost, he’s not a warmonger. “America First!” (meaning, “let’s get our own house in order”) is quite different from “Deutschland über Alles” (meaning “let’s go out and take the Lebensraum we need”). Trump believes that our invasion and occupation of Iraq was a catastrophic blunder, whose terrible consequences are still reverberating and will continue for decades. So do I, nearly every Democrat, and most thinking Republicans.

Trump doesn’t want to double down on such blunders or make new ones. If anything, he leans too much the other way: he wants to withdraw from the responsibilities of world leadership.

In the long run, that may not be a bad idea, at least if it means giving up the onus of being the beat (and beat-up) cop in every fight anywhere on the globe. But getting there from where we are today will take finesse, subtlety, cleverness and lots of patience.

Second, Trump has none of the (justified) international grievance that Hitler had. Although he thinks that China has taken advantage of us, he doesn’t blame the Chinese, or anyone else. He thinks we’ve done it all to ourselves by being too starry-eyed about trade and not good enough at negotiating in our own interest.

There’s at least some truth in that view, and you can argue how right he is. But even at its most extreme, his view is nothing like the international resentment that Germany had, and that Hitler expressed, for the utter destruction of Germany’s economy, including the Weimar Hyperinflation, that the Allies’ collective punishment for World War I caused, and that our own president (Woodrow Wilson) warned against.

So let’s stop thinking of Donald Trump as a Second Coming of Adolf Hitler, shall we?

Once we do that, it becomes possible to think of Trump as our President. That’s not a bad thing, because in two months and three days he will be. According to news reports, our new Senate Minority Leader Chuck Schumer has been recognizing this reality and trying to work with Trump and his transition team for the last several days.

More power to Schumer. But he and others like him had better work fast. What is now happening in this country is the greatest political realignment since Teddy Roosevelt became a Bull Moose, or since Ronald Reagan stole skilled workers from the Dems. Just about everything, including the next big political coalition, is up for grabs.

In the immortal words of Nobel Laureate Bob Dylan, “Don’t speak too soon, for the wheel’s still in spin.” If we are clever, progressives have a good chance to come out winners when the spinning stops.

But we won’t do it by marching in the streets or declaring rear-guard political guerrilla warfare. We’ll do it by persuading and infiltrating the Trump team while it’s still in formation, and by allying with it those cases—which are few but important—where Trump agrees with us. Here’s how:

1. Marginalizing Bannon. Every thinking person is aghast at Steven Bannon’s anointment as a “senior advisor” to Trump. Bannon is an over-the-top racist, nationalist and xenophobe, with clear ties to white supremacists. He’s also Trump’s chief propagandist, playing a role much like Josef Goebbels in the Third Reich.

Before you can deal with Bannon effectively, you have to understand why he’s there. There are three reasons. First, he taught Trump modern, digital media and its power. In so doing he prepared Trump to build the no-holds-barred, all-rules-broken propaganda war machine that gave him the presidency. Like or not, that machine has been effective: it rolled over sixteen GOP rivals and Hillary Clinton as if they didn’t exist. (Whether it could have rolled over Bernie as easily is debatable, but we have no proof that it couldn’t.)

Second, Trump won by bringing two previously marginalized groups into the political process as actual voters. One was the racist, xenophobic, white nationalists that Bannon represents. The other was the millions of skilled workers whom globalization has made unemployed or underemployed. It’s vital to understand that these two groups overlap, and that the skilled workers are a much bigger group and therefore much more important (because they have more economic clout and, in general, are more likely to vote). Get the skilled workers good, solid jobs, and you pretty much take the wind out of the tribalists’ sails.

The third thing to see is that Trump does understand a thing or two about running a working organization. He likes to put opposites in roughly comparable positions, pit them against each other, and watch them fight. That’s not a bad management style; it goes back to FDR and Lincoln’s “team of rivals.”

Yes, Bannon is a personal abomination. But, having helped Trump win, he’s now a bit like nuclear weapons. They have awesome power but work best if never used.

Trump knows the power of cooperation. His short victory sppech was conciliatory. He will not likely trot out Bannon’s tribalism again unless he begins to lose the skilled workers who let him win in Ohio and Wisconsin. Otherwise, he will keep Bannon on a short leash—or he will if his advisors point out the benefits of this strategy.

2. Attracting skilled workers. Stripped to its essence, this big political realignment was much like the last one. Just as Reagan stole the skilled workers that used to be known as Reagan Democrats, Trump stole the skilled workers that have been unemployed or underemployed as a result of globalization, the exodus of American manufacturing, and the Great Recession.

How did Trump do it? He did a little demagoguery, promising to deport undocumented Mexican immigrants who were ostensibly taking their jobs. But mostly he just did the most straightforward thing possible: he promised to bring back their jobs.

The methods Trump proposed ranged from fanciful to fantastic. He promised to deport eleven million people, leaving gaping holes in the American economy. He promised to face down China, which owns $ 1.3 trillion of our Treasury bonds (about 7%), and to put big tariffs on goods from China and Mexico, which together sell a big fraction of stuff our skilled workers buy. None of this is likely to work, and it would probably be counterproductive. Likewise renegotiating NAFTA will take years, will have uncertain results (including stopping exports), and will not bring back already-lost jobs.

The only plan that Trump has proposed that almost certainly will work is (re)building our national infrastructure. Our own American Society of Civil Engineers tells us we desperately need to do that, to the tune of $3.6 trillion by 2020. That work will employ skilled workers all over the country, and it will do so soon, not years down the road. Borrowing the money also will raise interest rates and normalize the economy, almost a decade after the Crash of 2008.

This plan is a no-brainer. President Obama and Nobel-laureate economists Paul Krugman and Joe Stiglitz have been pushing something like it for eight years. Dems should support it and push it now. When it passes, they should loudly and repeatedly remind the public who opposed it during Obama’s two terms (especially Darth McConnell) and why it took so long.

3. Theory versus practice. On the battleground of theory, progressives have been mostly AWOL or incompetent. Early on, they let their opponents tar them as “socialist” or even “Communist,” which the ones who can win elections most definitely are not.

I have no idea why progressives let this happen. Maybe some have nostalgia or theoretical proclivities for some of the ideas underlying socialism. Maybe some, like Bernie, let the names be applied to them and now can’t shuck them.

The simple fact is that we Yanks don’t have a socialist country and never will. But progressives don’t have to tout socialism. Single-payer health insurance, for example, is not “socialism.” It’s just a system required by the nature of insurance (the larger the pool of insureds, the lower the premiums) and by the ballooning administrative expenses that multiple differing sets of rules, forms, computer systems, and administrators cause, not to mention private profit. That’s why virtually every advanced country but ours has it, and why we ourselves have it for people over 65.

So single-payer is just the most efficient and effective system of health insurance. It will make free enterprise and capitalism work better. It will do so, among other things, by lowering premiums, insuring everyone, taking the social burden of health insurance off the backs of private enterprise, and giving private doctors and hospitals more paying patients.

Another battle in theory that progressives have lost is allowing the GOP to tout lower taxes (especially on the rich), less regulation, and smaller government for a generation. Not only do these things mean nothing (“lower” than what? “smaller” than what?). They inevitably weaken legal protection for workers, consumers, and citizens, not to mention our environment.

Insofar as taxes are concerned, lowering top individual rates allows the rich to avoid paying their fair share and makes them richer, while the middle class and poor hope their added wealth will “trickle down.” This never works for the middle class, but progressives have never found a quick and simple way to describe what it does and why doesn’t work. Only hard experience has done that.

Perhaps as an antidote to all this fanciful and counterproductive GOP theory, progressives have come up with the theory of “inclusion” and “diversity.” Every time a new minority group comes to the table for rights—gays, Lesbians, transgender folk, etc.—progressives don’t just let them sit down. They celebrate and exalt them.

In theory, there’s nothing wrong with this. In theory, it’s acceptable and moral to admit all new diners.

But in practice, celebrating the more oddball contributors to diversity has three unintended consequences. First, it makes the “normal” majority begin to feel neglected and under-appreciated. Second, as it encompasses smaller and smaller minorities, it loses perspective, sometimes almost completely (see below).

Finally, and most importantly, focusing obsessively on minorities and their rights emphasizes tribes and their differences, rather than working together. This factor recently reached the stage where millions of skilled workers, who build this country, thought their “tribe” was being neglected and so elected Trump. In the process, they put a tribalist like Bannon in a position of great power, thereby setting the cause of diversity back decades.

In his vehement dissent in Obergefell (the gay-marriage rights case), Chief Justice John Roberts warned us all about this. But no one listened.

I think he was wrong about gay marriage rights; I think we as a nation were ready. But we need to be aware of and sympathetic toward contrary views. If Southwest Airlines refuses to fly gay couples, or HCA refuses to let gay spouses visit in hospital, we need to force them, because these huge corporations are part of the fabric of daily life and (in effect, if not in law) public utilities. But if one of three small, family-owned bakeries in a small town doesn’t want to serve gay weddings, while the other two will, we ought not to force the reluctant one to ignore its conscience or its religion. “Live and let live” works both ways.

In all these cases, the point is simple. Abstractions simply don’t work well in politics. They become generalizations, and the generalizations sweep too far and oversimplify. Rather than talk incessantly about abstractions like “freedom” or “diversity,” pols should talk about specific plans and programs and explain, in the most concrete way possible, how they would make people’s lives better.

For example, pols could explain that single-payer health care would insure everyone, lower everyone’s premiums, cut the Gordian knot of inefficient health-insurance administration, give the single insurer no profit incentive to deny claims, avoid pandemics spreading by giving everyone a doctor to go to, and keep poor people out of expensive emergency rooms for routine and preventative treatment. Similarly, breaking up the big banks would decrease their risky behavior, reduce huge accumulations of capital that encourage speculation and other high-risk taking, and force banks to compete for profits by financing local home ownership, developing real estate (something dear to Trump’s heart) and financing start-up businesses (so-called “capital formation”).

4. Maintaining perspective. Quite apart from the atrocious level of insults and muck throwing, the presidential campaign just ended was notable for its lack of perspective. Not once during the debates did any moderator mention global warming caused by burning fossil fuels, although long term it is the single issue that most threatens our entire species’ happiness and survival, even more than nuclear proliferation.

Yet for several months during the too-long eighteen-month campaign, both left and right obsessed about whether to let transgender students use the bathrooms they prefer. How many such students are there? Probably less than 10,000 in the entire country. That’s 0.003%.

Sure, it’s probably just and right to let students use the bathroom they prefer, at least with a doctor’s note saying they have or aspire to having that gender. And sure, it was good for us progressives to see the GOP governor of North Carolina embarrassed by his hard-line response. But was this worth missing a chance to attract those millions of skilled workers who ended up voting for Trump?

I fault the thousands of political operatives and pollsters who make a career out of researching the needs and voting patterns of the tiniest and most marginal groups. They are the ones (with their useless polls) who so badly misjudged this electorate and this election. If we really want to “get even” with China, we should ship China all our many pollsters, political operatives and consultants for an extended “sabbatical,” say twenty years.

5. Specific programs. So what specific programs ought the Dems work with Trump on? Here are a few suggestions, including the infrastrure-building programs and bank breakups already mentioned, along with a brief outline of reasons and expected outcomes:

    a. Borrowing money for a $3.6 trillion infrastructure-building plan. This will attract the skilled-worker constituency that Trump won and put it to work. It would do so by standard Keynesian borrowing, which economists know will work. The borrowing (at low interest rates now) will help raise interest rates back to “normal” levels and erase the last pernicious effect of the Crash of 2008.

    b. Breaking up the big banks. Let’s get one thing clear. Today’s big bankers are not anything like our Robber Barons. The Robber Barons built this nation: the steel mills, the railroads, and the oil infrastructure that powers most of our transportation today. Today’s bankers gave us nothing; they enriched themselves obscenely and tanked the global economy. We are still recovering from the gratuitous and useless economic devastation they caused and our indignation at bailing them out.

    For reasons I have explained at length, regulation and criminal sanctions don’t work well to control bankers and never will. So the only recourse is to watch them like hawks—the Fed’s current approach—or break the big banks up. Pols as diverse as Republicans Jon Huntsman and Donald Trump, and Democrats Bernie Sanders, Elizabeth Warren and (belatedly and tentatively) Hillary have suggested breaking the big banks up.

    Detailed oversight of world-spanning banks is a tricky business. One slip by the regulators—one set of signs missed—and we would have another Crash of 2008. This time, neither our own citizens nor the world would soon forgive us; we would probably lose our economic leadership forever. And don’t rely on legislators’ detailed rules to save us: they never see the need for extra regulation until after a crash, but that’s precisely when the lobbying to dilute the regulations begins again.

    The breakups needn’t involve anything as drastic as nationalization. They can be private, on private markets, through private deals. But the resulting smaller banks will compete better, pose less systemic risk to our national and the global economy, be less likely to create financial houses of cards like the present $700 trillion of unregulated derivatives, and be more likely to serve the needs of local homeowners, local businesses and start-ups (i.e., real capital formation).

    Finally, pols of all stripes should recognize the still-simmering rage of ordinary Americans, including Trump’s millions of newly-voting skilled workers, that bankers caused so much hardship, never paid a dime, never went to jail, and got bailed out by hard-working taxpayers. The political party or coalition that first recognizes and assuages this anger will have loyal followers and good talking points for a generation.

    c. Family-oriented programs: family leave, higher minimum wages, and equal pay. Every one of these long-proposed family-oriented programs has been discussed, debated and analyzed incessantly. Each side, pro or con, has volumes of studies on its economic effect.

    But just like polls and predictions on the election just ended, these studies are useless. The notion that you can predict the economic effect of changes like these precisely, as if you were analyzing an electrical circuit on a desk, is simply bogus. There are too many variables and too much uncertainty. That’s why each side in the debate has its pet studies to cite.

    What you have to do is try these things, see how they work and, if necessary, fix them. We know all these programs work well in other countries. They haven’t destroyed capitalism or free enterprise there, and they won’t here. And if they have unintended consequences that need fixing, we can fix them then. What we do know is that each of these programs will make workers’ lives happier, less stressful and better. What’s wrong with that?

* * *
Conclusion. Trump is scatterbrained, egotistical and narcissistic. Few, if any, of us would choose him for our president for his character. But he is a practical man. He is responsible for various real-estate developments that, while perhaps not the world’s most elegant or sophisticated, are still standing and still in use.

As a practical man, he has the potential to distract us from abstract debates about government and taxes and direct our attention to real, concrete things that need doing and, once done, can make life better for all of us. The first party that recognizes these facts and takes advantage of them will have a head start in building a new coalition in the gigantic realignment now under way.

Doing that will take patience, forbearance and cleverness. Donald Trump is not an easy man. But he is also not committed to the Republican Party or its abstract dogma of ever-fewer taxes and regulations and ever-smaller government. He was once a Democrat.

So working with him, not against him, may bear strange fruit. We have all just experienced a much more competent and emphatetic president working under scorched-earth oppostiion for eight years. We all know how that turned out. Let’s try to do better this time.



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