In the days and weeks since November 8th's political earthquake, I have paid very close attention to nearly everything Trump and his staff have said, parsing every letter for signs of what is to come. Below are my two bits about Trump's transition, his major cabinet picks, and the early signs of what lies ahead.
I'm still worried,.... quite worried actually. Yet, perhaps because my expectations are so low or that in my desperate search for silver-linings I am cherry picking, I see signs that the sun will continue to come up every morning.
Everyone Needs to Relax
I am shocked at the degree to which this election has transformed parts of the media, the pundit class, and academia into a group of discombobulated fear-mongers. To listen to some pundits tell it, Trump's election by the ill-educated, dim-wit class has made Armageddon a virtual certainty over the next four years. Indeed, every Trump Tweet, cabinet pick, or comment made by his advisors moves us closer to something equivalent to the sky falling.
- Trump takes a call from the Taiwanese President?... That must mean we're going to war with China.
- Trump nominates Rex Tillerson to be Secretary of State?.... That just affirms that Trump and Putin have colluded to steal the election.
- Trump nominates Jeff Sessions to be Attorney General? ....That must mean the roundup and deportation of 11 million undocumented people in the U.S. by a Gestapo-like deportation force and drop them on the other side of that shiny fence Trump's promised to build.
- Trump proposes Oklahoma's Attorney General to head the EPA?.... That means no more Paris Climate Accord, rolling back Obama's coal regulations, and the acceleration of climate change. Scientists are evidently in such a panic that they've been scheming about how to prevent Trump from deleting years of climate data.
- There's also Trump's disdain for the press, his complaints about flag-burning, his "attacks" on the intelligence community, and his wide-ranging conflicts of interest, all of which point to a flouting of the U.S. Constitution.
There is plenty that makes me anxious about Trump, not the least of which is his unpredictability. Indeed, there are many ways in which the transition has become an extension of the chaotic, unpredictable manner in which Trump ran his campaign. In others, including some of his cabinet nominations, Trump has become relatively conventional.
If we are going to understand Trump, we would all do well to stop looking at him through the lens of a traditional politician. To do so is to continue to underestimate, misjudge, and be out-manoeuvred by him. Trump has been entirely unconventional and it's foolish to continue hoping he will eventually conform to some mold of what everyone has come to think U.S. presidents ought to be.
It has been written that Donald Trump is America's first independent presidential candidate. He might not be the kind of independent president anyone envisioned when they thought about a third-party break-through in U.S. politics, but here we are.
On the One Hand,....
On one hand, I have been encouraged by the signals of moderation sent by Trump in the days after his election, notably in his extensive 60 Minutes interview with Leslie Stahl. There he began to walk-back a number of his more controversial positions on things like Obama Care (saying that popular components like coverage for pre-existing conditions and coverage for children living at home would remain in place) and the border wall (perhaps only a fence in some places). Moreover, Trump signaled that he was going to initially focus deportation efforts on the 2-3 million undocumented aliens who had committed crimes (I still don't know if there are that many).
I think too that more and more people are coming to accept that the pragmatic, trans-actional business-man in Donald Trump may dominate his actions as president. That same trans-actional quality to Trump may generate a lot of unwelcome policy inconsistency. Yet, it's also important to reiterate that there's a big difference between taking Donald Trump literally and interpreting his bombast in a more figurative sense. Indeed, those who are most fearful of a Trump Administration seem to read him in a literal sense, while those who are currently extending him some rope tend to take him more figuratively.
Remember, this is an unconventional candidate with an unconventional approach to governance we are all unfamiliar with. That break with convention has continued through the transition. Trump has continued barnstorming around the country as President-elect, holding campaign-style rallies as though the campaign hadn't ended. It is both unprecedented and creating a hyper-focus on the transition that is eclipsing President Obama's last days in office in a manner we've never seen in past transitions.
Moreover, never before have we seen a president-elect intervene so directly in economic policy before being sworn into office-- even FDR waited until he was sworn in. Last week's intervention by Trump into Carrier's decision to close its Indianapolis air conditioner plant and move the jobs to Mexico was unprecedented, and unprecedentedly effective. Presidents, to say nothing of presidents-elect, rarely intervene so directly into firm-level decisions.
On the Other Hand...
Start with the Carrier intervention. While it might have been a public relations coup for Trump to have so overtly intervened, particularly after video of Carrier breaking the bad news to its employees went viral during the campaign, how Trump's intervention will manifest itself in national policy-making is worrisome. I think there are serious concerns over the impact such individual interventions could ultimately have on the Office of the President itself-- namely the evisceration of every other public office with a stake in such policy-making and the apparent concentration of decision-making authority on nearly everything in the White House.
A U.S. president's political constituency encompasses the entire nation, not just a narrow group of employees in Indiana. It's not that I wish for those Carrier jobs to head to Mexico, but dealing with that problem-- or the thousands of other firms who confront such issues-- should be dealt with by presidents on a macro-, national basis, not via a bottomless pit of short-sighted one-offs. Hence, I worry that the Carrier episode represents some very short-sighted thinking about national policy that is unlikely to "Make America Great Again." Every other firm in America has taken note of the Carrier intervention and scheming about how they can get a similarly beneficial deal from Trump.
It's the kind of destructive favouritism in policy-making that short-circuits market signals and send other countries into steep decline-- see, Putin's Russia or Chavez's Venezuela.
I remain gloomy about the implications of closed markets and the roll-back of trade liberalization world-wide. The Trans Pacific Partnership is toast, as is the Trans-Atlantic Trade and Investment Partnership. The NAFTA seems done, and the Doha Round of the WTO might as well raise the white flag of surrender over the organization's Geneva headquarters.
The Cabinet
Trump has now made most of his major cabinet picks. I have a few specific comments on each of them below, but a couple of general thoughts come to mind. Trump has, thus far, been inconsistent in terms of his willingness to involve himself in the details of governance. On the one hand, he has already been involved in things like the Carrier deal, criticizing Boeing for cost overruns on the new Air Force One, and threatening firms with import taxes for shipping jobs overseas. At the same time, he has reportedly been studiously avoiding the Presidential Daily Briefing given to presidents by the CIA. The outstanding question for me about ALL of Trump's cabinet nominees is how personally involved will Trump actually be in the portfolios he is assigning them? Will Trump be a micro-manager, as the Carrier deal suggests, or will he be comfortable letting his cabinet picks manage?
One other general observation is with respect to the critique that Trump is surrounding himself with business tycoons and military people. I share some reservations about this, but also accept Trump's argument that doing things the old-fashioned way-- populating the highest levels of government with former politicians, career civil servants and Ivy League-trained lawyers-- hasn't necessarily served the country well either. Let's give it a go. Moreover, I was worried that many of the experienced policy wonks within the GOP had permanently abandoned Trump leaving him with a thin bench of people to choose from. With a few big exceptions, a number of people have returned to the fold.
A final note here about the U.S. Congress. Many, including myself, believe the U.S. Congress will act as a significant check on anything a Trump Administration tries to do. In the short run, some Republicans on the Hill undoubtedly owe their re-election to the momentum of Donald Trump's own victory and will have to extend some rope to the new President. There will be easy wins for both ends of Pennsylvania Ave on Obama Care (although less on what to "replace" it with) and tax reform. But after that, the collision course between Trump and the House GOP over the budget seems certain, especially entitlement programs.
Priebus |
Perhaps the most important function Priebus will serve in the Trump White House is as bridge between the President and the rank-and-file GOP, especially in the House. Key there is Priebus's personal, long-standing friendship with fellow Cheese-Head (Wisconsin native) Paul Ryan. Many in the GOP establishment are in a state of shock over Trump's victory similar to that of many Democrats. Lots of Republicans, including Speaker Ryan, distanced themselves from Trump during the campaign. Now many of those same Republicans owe some of their electoral success to Trump. Priebus will be vital in trying to re-build a lot of burnt bridges between the White House and Capitol Hill. If the GOP wants to put forward any semblance of unity and get some things done, Priebus will need to be successful.
Trump |
Kushner |
Kushner and Ivanka are moving to DC to be close to the action, but as with Ivanka, a formal role in a Trump Administration will be tough to swing. That said, it looks as if they'll be just down the street and I imagine we'll see both spending a fair bit of time lurking about the West Wing.
Flynn |
Most importantly here, his appointment as National Security Advisor means Flynn will not be subject to Senate confirmation. Therefore, we may never get a sense of Flynn or the philosophical orientation toward national security he is giving to President Trump.
Pompeo |
Sessions |
Mnuchin |
Moreover, I'd point to both Hank Paulson and Tim Geithner as former Secretaries that spent most of their careers working in finance but didn't do Wall Street all that many favors. Paulson, himself a Goldman alum, presided over (some would say pushed) the demise of both Bear Stearns (2007) and Lehman Brothers (2008). Geithner was chair of the New York Federal Reserve for many years-- a job many think makes you too cozy with Wall Street-- and yet proposed a lot of tough measures Wall Street didn't necessarily like. There may be many other reasons to oppose Mnuchin. Being a Wall Street banker isn't one of them.
One of Mnuchin's biggest challenges once in office will be stick-handling the politics of "currency manipulation." It's Treasury's job to determine whether foreign countries are actually "manipulating" their currencies, but Treasury has little input into how fluctuating currency values change those politics. Let me explain. During the campaign, Trump regularly alleged the Chinese were manipulating their currency giving Chinese exporters to the United States a significant cost advantage over American competitors. This is an old story, but in the past several years Treasury has been loathe label China a currency manipulator. Mnuchin's task is even harder now because of the appreciation of the U.S. Dollar, some of which is the result of anticipation around Trump's plans to engage in infrastructure and defense spending. Moreover, as some of you will have noticed, the Federal Reserve raised the Fed Funds Rate to 0.75% last week, further incentivizing capital inflows into the U.S. bidding up the value of the U.S. Dollar. Mnuchin has little control over those things, all of which are of U.S. origin, but will face a lot of political pressure to label China a manipulator. Good luck with that.
"Mad Dog" |
Assuming Trump can get Paul Ryan's House Republicans to appropriate the funds, "Mad Dog" will preside over what is expected to be a major infusion of cash to the military. Trump will undoubtedly be looking to end the so-called "sequestration" of defense funding that was part of the 2011 budget deal. It's hard to say how that will go down with the House GOP if entitlement reforms or other budget measures are not also considered.
Tillerson |
In my view, this makes him far more qualified than Mitt Romney or Rudy Giuliani to understand and engage some of those same people as America's chief diplomat. Moreover, I'm not sure I understand the critique of Tillerson as someone that's too close to Putin? Putin is a tough customer with a lot of blood on his hands (MH17, Ukraine, Crimea, Syria). I'm ready for a different approach and am happy to give Tillerson a shot at doing what the last several Secretaries of State (Republican and Democrat) have failed to do-- generate a Russian "reset" that actually works.
Kelly |
So what? Who cares? If Donald Trump follows through on some of his campaign promises with respect to immigration and trade, it will be DHS that implements all of them. Even if he pulls back from his promise to build a wall on the Mexican border or to deport millions of undocumented people, the chilling effect on both borders could be profound. Sure, the Mexican border is different from the Canadian border. However, anyone that's crossed the Canadian border in the last decade cannot have failed to note its "hardening" as a choke point for people and goods. Indeed, relative to what it looked like 20 years ago, the Canada-U.S. border shares more in common with the more militarized U.S.-Mexican border than ever. Furthermore, a sprawling, dysfunctional DHS bureaucracy made up mostly of cops-- and soon to be headed by an ex-Marine-- isn't going to nimbly differentiate between the Canadian and Mexican borders in the application of its policies.
Ross |
Pruitt |
That said, the combination of Pruitt and Perry suggest the Trump Administration will make good on its promise to withdraw from last year's Paris Agreement on climate change. Given what happened when the Bush Administration signaled its unwillingness to meet America's Kyoto Protocol commitments, there's a very good chance many other countries will choose not to implement Paris. Bush's policy moves on Kyoto were a convenient excuse for Ottawa to do nothing on its own Kyoto commitments, the argument being that Canada could ill-afford to be at a competitive disadvantage with its largest trading partner. Will Justin Trudeau ultimately do likewise and abandon some of his stated intentions to implement Canada's Paris commitments?
Perry |
Honorable Mentions
Conway |
Bannon |
Recall that for many years everyone assumed Vice President Dick Cheney was having an outsized influence in the Bush White House. Turns out there were far more divisions there than anyone knew at the time. Cheney was influential, but he wasn't pulling the strings.
Vice President-Elect Mike Pence deserves mention here. Like Reince Priebus, Pence could end up being an important bridge to Capitol Hill and establishment Republicans. Pence will also be very important in terms of Trump's legislative agenda since he is one of the only people here with actual legislative experience on Capitol Hill. Pence's views (and policies as Indiana Governor) on social issues like LGBTQ rights and abortion make a lot of liberals nauseous, but Pence may also play an important role in curbing some of Trump's impulsiveness. That I am even saying that may add to the fear. Nevertheless, Pence is a serious politician not given to the kind of impulsiveness we've seen out of his boss. Look to Pence to be the Trump Administration's sober second thought.
Branstad |
Carson |
DeVos |
Chao |
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