None of Trump’s extremist policy ideas has received public support. The public opposed last year’s
- Republican-backed corporate tax cut, Trump’s
- effort to repeal the Affordable Care Act (Obamacare), his
- proposed border wall with Mexico, the decision to
- withdraw from the Iran nuclear agreement, and the
- imposition of tariff increases on China, Europe, and others.
- At the same time, contrary to Trump’s relentless promotion of fossil fuels (coal, oil, and gas), the public favors investments in renewable energy and remaining in the Paris climate agreement.
.. Trump has tried to implement his radical agenda using three approaches.
1) The first has been to rely on the Republican majorities in the two houses of Congress to pass legislation in the face of strong popular opposition. That approach succeeded once, with the 2017 corporate tax cut, because big Republican donors insisted on the measure, but it failed with Trump’s attempt to repeal Obamacare, as three Republican senators balked.
.. 2) The second approach has been to use executive orders to circumvent Congress. Here the courts have repeatedly intervened, most recently within days of the election, when a federal district court halted work on the Keystone XL Pipeline, a project strongly opposed by environmentalists, on the grounds that the Trump administration had failed to present a “reasoned explanation” for its actions. Trump repeatedly and dangerously oversteps his authority, and the courts keep pushing back.
.. 3) Trump’s third tactic has been to rally public opinion to his side. Yet, despite his frequent rallies, or perhaps because of them and their incendiary vulgarity, Trump’s disapproval rating has exceeded his approval rating since the earliest days of his administration. His current overall disapproval rating is 54%, versus 40% approval, with strong approval from around 25% of the public. There has been no sustained move in Trump’s direction.
.. In the midterm elections, which Trump himself described as a referendum on his presidency, the Democratic candidates for both the House and Senate vastly outpolled their Republican opponents. In the House races, Democrats received 53,314,159 votes nationally, compared with 48,439,810 for Republicans. In the Senate races, Democrats outpolled Republicans by 47,537,699 votes to 34,280,990.
.. Summing up votes by party for the three recent election cycles (2014, 2016, and 2018), Democratic Senate candidates outpolled Republican candidates by roughly 120 million to 100 million. Nonetheless, the Republicans hold a slight majority in the Senate, where each state is represented by two senators, regardless of the size of its population, because they tend to win their seats in less populous states, whereas Democrats prevail in the major coastal and Midwestern states.
Wyoming, for example, elects two Republican senators to represent its nearly 580,000 residents, while California’s more than 39 million residents elect two Democratic senators.
Without control of the House, however, Trump will no longer be able to enact any unpopular legislation. Only policies with bipartisan support will have a chance of passing both chambers.
.. On the economic front, Trump’s trade policies will become even less popular in the months ahead as the American economy cools from the “sugar high” of the corporate tax cut, as growing uncertainty about global trade policy hamstrings business investment, and as both the budget deficit and interest rates rise. Trump’s phony national-security justifications for raising tariffs will also be challenged politically and perhaps in the courts.
.. True, Trump will be able to continue appointing conservative federal judges and most likely win their confirmation in the Republican-majority Senate. And on issues of war and peace, Trump will operate with terrifyingly little oversight by Congress or the public, an affliction of the US political system since World War II. Trump, like his recent predecessors, will most likely keep America mired in wars in the Middle East and Africa, despite the lack of significant public understanding or support.
.. Nonetheless, there are three further reasons to believe that Trump’s hold on power will weaken significantly in the coming months. First, Special Counsel Robert Mueller may very well document serious malfeasance by Trump, his family members, and/or his close advisers.
.. Second, the House Democrats will begin to investigate Trump’s taxes and personal business dealings, including through congressional subpoenas. There are strong reasons to believe that Trump has committed serious tax evasion (as the New York Times recently outlined) and has illegally enriched his family as president (a lawsuit that the courts have allowed to proceed alleges violations of the emoluments clause of the Constitution). Trump is likely to ignore or fight the subpoenas, setting the stage for a major political crisis.
.. Third, and most important, Trump is not merely an extremist politician. He suffers from what author Ian Hughes has recently called “a disordered mind,” filled with
- hate,
- paranoia, and
- narcissism.
According to two close observers of Trump, the president’s grip on reality “will likely continue to diminish” in the face of growing political obstacles, investigations into his taxes and business dealings, Mueller’s findings, and an energized political opposition. We may already be seeing that in Trump’s erratic and aggressive behavior since the election.
.. The coming months may be especially dangerous for America and the world. As Trump’s political position weakens and the obstacles facing him grow, his mental instability will pose an ever-greater danger. He could explode in rage, fire Mueller, and perhaps try to launch a war or claim emergency powers in order to restore his authority. We have not yet seen Trump in full fury, but may do so soon, as his room for maneuver continues to narrow. In that case, much will depend on the performance of America’s constitutional order.
Donald Trump Is Lyin’ Up a Storm
Is there an election coming up, or something?
With Republicans struggling to keep their grip on Congress, President Trump is dialing up the demagogy. At campaign rallies and on social media, he’s spewing dark warnings about a
- Democratic mob clamoring to usher in an
- era of open borders,
- rampant crime,
- social chaos and
- economic radicalism.
As is so often the case, Mr. Trump is not letting reality interfere with his performance. At a rally in Nevada this weekend, the president told the crowd that Californians were rioting to “get out of their sanctuary cities.” (They aren’t.) He also suggested that Democrats will soon be looking to hand out free luxury cars to illegal immigrants. (They won’t.) “Give ’em a driver’s license. Next thing you know, they’ll want to buy ’em a car,” he riffed. “Then they’ll say the car’s not good enough, we want — how about a Rolls-Royce?”
Mr. Trump’s Twitter feed has been electrifying as well, full of statements intended to thrill his fans — and, better still, bait his opponents into a partisan rage. In recent days, he has dubbed Stormy Daniels “Horseface,” escalated his taunting of Senator Elizabeth Warren as “Pocahontas” and grumbled about the fact that Bruce Ohr, one of Mr. Trump’s nemeses in the “rigged” Russian “witch hunt,” is still employed by the Department of Justice. He has asserted that the Democratic nominee for governor in Florida, Andrew Gillum, is looking to turn the state into “the next Venezuela.” He has threatened to dispatch troops to shut down the southern border and renewed his vow to cut off the “massive foreign aid” sent to El Salvador, Guatemala and Honduras for those nations’ failure to stop their people from flocking to the United States.
In particular, the caravan of Honduran migrants making its way north has emerged as a focus of his fantasies. Mr. Trump has repeatedly implied that Democrats are paying Honduran youth to join the caravan. On Monday, he claimed, based on nothing, that the caravan is awash in “criminals and unknown Middle Easterners.”
.. Mr. Trump plays the polarization game because he enjoys it — he does love a brawl — and because he doesn’t appear to care about much beyond his political and personal fortunes. And, more practically speaking, these days he doesn’t have much else to talk about.
It’s not that this president has failed to achieve anything in his first couple of years in office. The economy is chugging along right now, and many Republican candidates would be happy for him to play that up on the campaign trail.
But his most notable achievements do not resonate beyond Mr. Trump’s base. He has overseen a conservative overhaul of the federal judiciary, seating a record number of judges, including two Supreme Court justices. And he has been an aggressive deregulator in areas ranging from education to transportation to health care to the environment.
The US Will Lose Its Trade War with China
In handicapping the US-China conflict, Keynesian demand management is a better guide than comparative advantage. In principle, China can avoid any damage at all from US tariffs simply by responding with a full-scale Keynesian stimulus.
.. Assuming that well-informed Chinese businesses know this, they will not cut their export prices to absorb the cost of US tariffs. That will leave US importers to pay the tariffs and pass on the cost to US consumers (further fueling inflation).. Thus, the tariffs will not be “punitive” for China, as Trump seems to believe. Instead, the main effect will be to hurt US consumers and businesses, just like an increase in sales tax... Where will the competitively priced imports that undercut China come from?
In most cases, the answer will be other emerging economies. Some low-end goods such as shoes and toys will be sourced from Vietnam or India. Final assembly of some electronic and industrial machinery may relocate to South Korea or Mexico.
.. But this should have no effect on Chinese growth, employment, or corporate profits if demand management is used to offset the loss of exports. The Chinese government has already started to boost domestic consumption and investment by easing monetary policy and cutting taxes.
.. In principle, China can avoid any damage at all from US tariffs simply by responding with a full-scale Keynesian stimulus. But would the Chinese government be willing do this?1
This is where bipartisan US support for a “containment policy” toward China paradoxically works against Trump. China’s rulers have so far been reluctant to use overt demand stimulus as a weapon in the trade war because of strong commitments made by President Xi Jinping to limit the growth of China’s debt and to reform the banking sector.
.. But such financial policy arguments against Keynesian policy are surely irrelevant now that the US has presented the battle over Trump’s tariffs as the opening skirmish in a geopolitical Cold War. It is simply inconceivable that Xi would attach higher priority to credit management than to winning the tariff war and thereby demonstrating the futility of a US containment strategy against China.
.. This raises the question of how Trump will react when his tariffs start to hurt US businesses and voters, while China and the rest of the world shrug them off. The probable answer is that Trump will follow the precedent of his conflicts with North Korea, the European Union, and Mexico. He will “make a deal” that fails to achieve his stated objectives but allows him to boast of a “win” and justify the verbal belligerence that inspires his supporters.
Trump’s surprisingly successful rhetorical technique of “shout loudly and carry a white flag” helps to explain the consistent inconsistency of his foreign policy. The US-China trade war is likely to provide the next example.
How Special Interests Hide the True Costs of Tariffs
Consider how easy it was for Mr. Trump to get a 25 percent tariff on steel imports. His administration simply concocted a fanciful national-security narrative about why the steel industry needed protection from foreign steel imports — this despite the industry’s enjoying a 70 percent share of the United States steel market and despite the Department of Defense finding no national-security harm from global steel imports.
.. For example, for the projected impact of the steel tariffs, numbers produced by the Commerce Department show that they may increase employment in the metals industry by 14,000 jobs. But the report also says that a significantly larger number of jobs will be destroyed, as a result of these tariffs, in industries downstream from metal production.
.. Under the current system, if Commerce Secretary Wilbur Ross decides to protect his friends and business interests in the steel industry, he can ignore the damage that his own data show the tariffs will inflict on some of the 6.5 million workers in America’s steel-consuming industries. His sole lawful obligation is to demonstrate that the economic fortunes of the 140,000 steel employees will be promoted by the tariffs.
.. when I.T.C. commissioners make their determinations in such cases, they’re actually forbidden by statute from considering the impact of these so-called trade remedies on downstream industries — those consumers of goods and services hit by the tariffs.
.. The good news is that there’s an easy fix: Change the statutes so that commissioners are required to consider the effects of trade restrictions on downstream industries and consumers.
.. Today, steel executives have an iron grip on the White House thanks to the deep ties of the president’s advisers to the industry.
- Mr. Ross made his fortune buying and selling steel companies and was sitting on a steel company’s board until his confirmation as commerce secretary.
- Robert Lighthizer, a private lawyer who represented the steel industry for years, is now the United States trade representative.
- The upper levels of both the Office of the United States Trade Representative and the Commerce Department have predictably been populated by other individuals with close ties to Big Steel. And the
- trade adviser Peter Navarro’s 2012 documentary, “Death by China,” was funded by one of the top beneficiaries of these tariffs — the steel producer Nucor.
This cronyism explains how the steel industry is directly involved in deciding which companies do or don’t receive exemptions from the steel tariffs and why so few exemptions have been granted.
The United States cannot win its tariff war with China, regardless of what President Donald Trump says or does in the coming months. Trump believes that he has the upper hand in this conflict because the US economy is so strong, and also because politicians of both parties support the strategic objective of thwarting China’s rise and preserving US global dominance.
But, ironically, this apparent strength is Trump’s fatal weakness. By applying the martial arts principle of turning an opponent’s strength against him, China should easily win the tariff contest, or at least fight Trump to a draw.
.. Comparative advantage certainly influences long-term economic welfare, but demand conditions will determine whether China or America feels more pressure to sue for trade peace in the next few months. And a focus on demand management clearly reveals that the US will suffer from Trump’s tariffs, while China can avoid any adverse effects.
From a Keynesian perspective, the outcome of a trade war depends mainly on whether the combatants are experiencing recession or excess demand. In a recession, tariffs can boost economic activity and employment, albeit at the cost of long-term efficiency. But when an economy is operating at or near its maximum capacity, tariffs will merely raise prices and add to the upward pressure on US interest rates. This clearly applies to the US economy today.
.. US businesses could not, in aggregate, find extra low-wage workers to replace Chinese imports, and even the few US businesses motivated by tariffs to undercut Chinese imports would need to raise wages and build new factories, adding to the upward pressure on inflation and interest rates.
.. With little spare capacity available, the new investment and hiring required to replace Chinese goods would be at the cost of other business decisions that were more profitable before the tariff war with China. So, unless US businesses are sure the tariffs will continue for many years, they will neither invest nor hire new workers to compete with China.