Sorry, investors, but there is no sanity clause.
Two years ago, after the shock of Donald Trump’s election, financial markets briefly freaked out, then quickly recovered. In effect, they decided that while Trump was manifestly unqualified for the job, temperamentally and intellectually, it wouldn’t matter. He might talk the populist talk, but he’d walk the plutocratic walk. He might be erratic and uninformed, but wiser heads would keep him from doing anything too stupid.
In other words, investors convinced themselves that they had a deal: Trump might sound off, but he wouldn’t really get to make policy. And, hey, taxes on corporations and the wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal — or at any rate, that there wasn’t a sanity clause. (Sorry, couldn’t help myself.) Put an unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy things.
To be clear, voters have been aware for some time that government by a bad man is bad government. That’s why Democrats won a historically spectacular majority of the popular vote in the midterms. Even the wealthy, who have been the prime beneficiaries of Trump policies, are unhappy: A CNBC survey finds that millionaires, even Republican millionaires, have turned sharply against the tweeter in chief.
.. The reality that presidential unfitness matters for investors seems to have started setting in only about three weeks (and around 4,000 points on the Dow) ago.
- First came the realization that Trump’s much-hyped deal with China existed only in his imagination. Then came
- his televised meltdown in a meeting with Nancy Pelosi and Chuck Schumer,
- his abrupt pullout from Syria,
- his firing of Jim Mattis and
- his shutdown of the government because Congress won’t cater to his edifice complex and build a pointless wall. And now there’s
- buzz that he wants to fire Jerome Powell, the chairman of the Federal Reserve.
Oh, and along the way we learned that Trump has been engaging in raw obstruction of justice, pressuring his acting attorney general (who is himself a piece of work) over the Mueller investigation as the tally of convictions, confessions and forced resignations mounts.
.. And even trade war might not do that much harm, as long as it’s focused mainly on China, which is only one piece of U.S. trade. The really big economic risk was that Trump might break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply integrated with production in Canada and Mexico that this would have been highly disruptive. But he settled for changing the agreement’s name while leaving its structure basically intact, and the remaining risks don’t seem that large.
.. Now imagine how this administration team might cope with a real economic setback, whatever its source. Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people? Would his Treasury secretary and chief economic advisers coolly analyze the problem and formulate a course of action, or would they respond with a combination of sycophancy to the boss and denials that anything was wrong? What do you think?
The Phony Shutdown War
Trump and Democrats put political symbolism over policy substance.
A quarter of the federal government has shut down, and most of America doesn’t care. There’s wisdom in that response because this showdown over spending, the third this year, is a mostly symbolic political exercise that won’t make much difference no matter who wins.
President Trump wants $5 billion for security at the Mexican border, while Democrats are offering no more than $1.6 billion. Mr. Trump wants to be able to say he won the money for the “wall” he campaigned on, while Democrats don’t want to give him that victory so they say their money can only be spent on “border security.”
This is the tyranny of small differences, and neither choice will solve our national immigration dilemmas. A physical barrier has worked in some places like San Diego. But migrants then look for other illegal entry points. Building the wall across the entire 1,954-mile border would be expensive and it wouldn’t stop illegal immigration since most illegals arrive by overstaying their legal visas.
The best solution, as ever, is to reduce the incentive for people to come illegally by creating more ways to work legally in America. Most migrants come to work, and at the current moment there are plenty of unfilled jobs for them. A guest-worker program would let migrants move back and forth legally, ebbing and flowing based on employer needs, while reducing the ability of gangs and smuggler “coyotes” to exploit vulnerable migrants.
.. Democratic leaders want to show their base how tough they are for standing up to Mr. Trump, even if it means hanging the Dreamers out to dry. The left never wants any immigration compromise because it wants the election issue.Mr. Trump can’t decide what he really wants and seems to have no political strategy for achieving whatever it is.
- First he surprised everyone by taking public ownership of a possible shutdown in a meeting in the Oval Office with Democratic leaders.
- Then he agreed to Senate Majority Leader Mitch McConnell’s proposal to fund the government for two months to move the funding debate into the new year when Democrats run the House.
- Then the House GOP Freedom Caucus and talk-radio hosts stomped their feet, and Mr. Trump flipped back to welcoming a shutdown and tweeting that “it could be a long stay.”
To what end? Mr. Trump’s shutdown tactic is to hold his breath until the other side gives in. This didn’t work for Newt Gingrich in 1995, though at least Newt was battling Bill Clinton over major reforms in the entitlement state. Mr. Trump is holding his breath over a mere $3.4 billion in spending for a piece of political symbolism.
The Freedom Caucus has long argued that Republicans can win a shutdown standoff if they hold their breath long enough. Perhaps Mr. Trump will try that, and at least we’d get a political market test of which party suffers most as the standoff continues. Yet if it ends with the two sides compromising on something like $3 billion in border funding, Americans can be forgiven for thinking the whole thing was a pointless political farce.
Another government shutdown … and another good gamble by Trump
Another government shutdown. Coming on the heels of Trump’s precipitous withdrawal from Syria, the resignation of Defense Secretary Jim Mattis, and continued decline in the stock market, this merely adds to the growing sense that the American government is in near-terminal disarray. But as a political matter, it is highly unlikely to hurt either President Trump or the Republican Party.
.. There are two reasons for this: Voters already behind Trump want the wall, and political effects of shutdowns usually fade quickly after shutdowns are resolved. That this shutdown occurs nearly two years before the next election merely adds to the fact this is probably a good gamble by Trump.
Polls have long shown that controlling immigration is a high priority for Republican and Trump voters. Indeed, the midterm exit polls showed that immigration was the second-most-important issue facing the country, and voters who thought it was the most important voted Republican by a 3-to-1 margin.
.. 43 percent of Americans supported building the wall, including 86 percent of Republicans and 45 percent of independents.
.. The same poll found that 52 percent of Republicans think immigration should be the top issue for Congress in the coming year.
Forcing a shutdown over the wall is not likely to gain Trump or the GOP much support, but it reinforces their position with their own voters. That’s a good thing to do this far out from the election, and sets up possible shifts to the center on other issues as goodwill has been increased first among the base.
Nor do voters tend to punish a party that causes a shutdown at the ballot box. The research of FiveThirtyEight’s Nate Silver backs this up, and he contends that shutdowns cause political damage only if they last for a long time. That happened in late November 1995 and in the 1995-1996 holiday period, when two separate shutdowns over government spending issues that lasted a combined 27 days helped propel President Bill Clinton to reelection.
.. But it’s also worth recalling that voters did not punish the congressional Republicans who were widely blamed for the shutdown.
.. Both history and current politics are on Trump’s side in this standoff. There’s no reason he shouldn’t dig in for the holiday season and wait for the Democrats to offer a compromise he can live with.
‘He takes no ownership — that’s just Trump’: President eschews responsibility for a shutdown he once craved
The Debrief: An occasional series offering a reporter’s insights
In 2014, Donald Trump sued to have his name taken off a pair of Atlantic City casinos he built three decades earlier that had gone bankrupt.“It’s really indicative of how we all know he thinks so in-the-moment and so off-the-cuff that it winds up being dangerous,” said Jack O’Donnell, former president of the Trump Plaza Hotel and Casino, one of the properties from which Trump removed his name.
.. “The whole idea of once things are going wrong, he takes no ownership — that’s just Trump,” O’Donnell added. “He does not own anything that goes wrong. The problem is, he’ll blame anybody. Obviously, it’s the Democrats in this situation.”
.. He alternated between insisting that Mexico would pay for the wall through a convoluted, and false, interpretation of a new trade deal and suggesting that the U.S. military and other agencies would find money in their existing budgets to build the barrier if lawmakers failed to deliver — despite restrictions on federal agencies reprogramming funding.
.. And the president even began rebranding “the wall,” parrying Democratic denunciations of a concrete monolith at the U.S.-Mexico border by announcing that his administration would build “artistically designed steel slats.” That quickly prompted widespread derision.
.. He even appeared to be conspiring with prominent conservative talk show hosts to help guide him. Rush Limbaugh boasted that Trump had “gotten word to me” that he would shut down the government if he failed to win the wall funding.
By Friday, a desperate Trump had seized on the “nuclear option” proposed by congressional border hawks to discard the Senate’s long-standing filibuster rules and approve with a majority vote a House-passed spending plan that included the $5 billion.
.. Aides announced that he had indefinitely postponed his winter vacation at his Mar-a-Lago resort in south Florida, which was scheduled to begin Friday evening.
.. In the case of his casinos, Trump had divested himself of control of the properties five years before he sued the new owners, having retained a 10 percent stake for the continued use of his moniker.
In his lawsuit to remove his name, Trump asserted that the properties, which twice under his management had faced bankruptcy, had fallen into disrepair and tarnished a Trump brand that “has become synonymous with the highest levels of quality, luxury, prestige and success.”
.. To O’Donnell, the episode was “classic Trump.” The president, he said, had taken ownership of the shutdown in the televised showdown with Schumer and Pelosi to demonstrate his toughness to his base — without a plan to deal with the aftermath.
“That’s really what this was: ‘I’m a tough guy. Don’t think I can’t handle the heat,’ ” O’Donnell said. “The fact is, he can’t handle it.”