Trump Presidency Post-Mortem

One of the subs asked me to discuss how I went from being pro-Trump to anti-Trump over the past 4 years. To explain my transformation, let’s do a little Government 101 class first.

In a civilized country, there is a conflict in how different citizens would solve particular problems (these are called “issues”). Groups of citizens then organize to suggest how these “issues” need to be solved. These issue-based organizations (“political groups” or “political constituencies”) team up in larger groups (“political parties”) in order to get elected and resolve the issues in their favor by using the “authority” of government. The government has “authority” because it has the “consent” of the people. Once in power, political parties can resolve a lot of issues in their favor. This is called “power projection”. Some issues can be resolved even against the consent of the super-majority of the citizenry – this is called “policy overreach”. Political parties tend to lose power if they abuse their power projection too much and overreach on too many issues and force the citizenry to change who is in power to realign issue resolution back to the popular will. That happens in all kinds of governments – democracies, republics, autocracies, monarchies or theocracies. “We The People” get what they want one way or another.

To understand my views on Trump, one has to first understand my stances on various “issues”. I happen to be a Christian conservative (I am an Eastern Orthodox, not a Protestant or Catholic) and I think 3rd term Abortion needs to be outlawed (partial repeal of Rove-Wade). If a child can survive outside the mother’s womb, I don’t think it should be legal to kill it unless it saves the mother’s life. While I understand the practical needs for marriage equality and that people can happen to be gay, I don’t think the society needs to promote gender switching for a slew of practical reasons – competition leagues, medical reasons, societal costs, loss of productivity due to mental illness, etc. Boys in girl’s bathrooms makes no sense to me or to the women in my household. So I am a social conservative.

I am also an economic protectionist. I think America gets a lot of things right on the economy, however since the Clinton era I think the US economy has become too liberalized, too globalized and that extra degree of liberalization is hurting the country’s economy and the economic prospects of many fellow Americans. Globalization needs to be regulated because outsourcing has resulted in the depopulation and de-industrialization of Midwest and the permanent unemployment of 40 million people (a country the size of Romania). I also think there is NOT enough redistribution. The rewards of the economy go to too few people because of automation, network effects and outsourcing and there isn’t enough resources available to the rest to maximize overall economic performance and happiness.

In addition, I think US government provides too few services to the American people for the taxes that we pay. Over the past 30 years, the internet has liberalized the US economy from the dominant “capital/labor” paradigm of the post-WW2 years. Most services in the US today like health insurance and unemployment insurance are built with that “capital/labor” model in mind. Health care and unemployment insurance is provided only if you work in a big company. If you get laid off, the government then pays you for a minimum existence and bad health care. We now have over 50 million contractors/small businesses that don’t work for a big corporation or participate in a big labor union. Those people are priced out of health care insurance whose premiums can only be paid by profits made by big corporations. The businesses of those small business people are also very cyclical and the current unemployment insurance paradigm doesn’t provide any economic security for them. These people also don’t pay in or accrue Social Security retirement benefits like regular workers. Generally speaking, I am not a small government person, I think the US government needs to deliver more goods for the size it has. The US government needs to be more efficient in delivery of public services and needs to deliver more of them. In other words, I don’t want less for less, I want more for same. I am distinctly different from libertarians and your rank-and-file Tea Party Republicans who want a Jeffersonian small government. Nor am I a socialist since I still think the private sector should be the biggest sector of the economy. However, I think the private sector is vulnerable to monopolism due to automation, network effects and outsourcing which in turn hurts the economic dynamism of the economy. Ultimately, I think the government sector needs to provide viable options to private sector monopolies even if not with the same extensive feature sets. The contractor/citizen population that is not locked in the capital/labor paradigm needs to be able to choose between expensive feature-rich private sector options and cheaper feature-poor public sector options. I think there needs to be cheaper public-option health care, cheaper public banking and a whole host of other government services. Government can operate at scale and derive efficiency of scale that no private sector entity can.

Trump’s political constituencies in 2016 were American ethno-nationalists, white nationalists, celebrity groupies, libertarians (small government people), pro-business groups (financial advisors and businessmen), isolationists (no wars abroad), pro-gun groups, Christian conservatives and economic protectionists (anti-globalists/free market people). I voted for Trump because of his social conservatism and economic protectionism. I aligned with him on a couple of issues I felt strongly about. I also thought Trump’s background as a businessman will result in more efficiency in government and thus delivery more government goods for the same taxes paid.

Trump turned out to be a disappointment on almost all issues with the notable exception of social conservatism.

The first issue is he didn’t want to make the government deliver more goods for the same amount of taxes, he just wanted to cut taxes and regulations and just make the government smaller. In this respect, Trump is a standard issue libertarian. He has a different understanding of the word “efficiency”. And frankly, he misled us. That was a broken campaign promise. The “Better Way” GOP tax plan in 2016 was revenue neutral. It taxed Chinese production (or consumption of Chinese goods) via BAT (Border Adjusted Tax) to finance a lower marginal tax rate for Americans. Instead Trump capped the SALT deduction which is basically hiking the property tax rate for suburban homeowners. So instead of taxing consumption of foreign production to finance a corporate tax cut, they taxed property to finance a corporate tax cut. I find this absurd. As a conservative, this is the most ridiculous thing ever. The interests of Globalists and foreign governments overrode domestic American constituencies. I couldn’t believe the “conservatives” in America would pass such a change in the tax code. It’s one of the worst examples of “policy overreach” I have seen. So that right there led to a big disillusionment with Trump and his Republican Party.

The 2nd issue was the regulation of globalization or the China trade war. While I think the US needs to be more protectionist, Trump talked a lot but did nothing. The US trade deficit with China increased under Trump. He put tariffs on goods that didn’t matter to anybody. Ultimately, he didn’t force insourcing instead simply choosing to make China weaker and force outsourcing out of China to Vietnam, India Mexico and other low cost locations. I am not a China hater, I simply want the US to protect the jobs inside its jurisdiction. Trump had no interest in that beyond the demagoguery that would get him votes. Despite all his propaganda to the contrary, Trump is all talk, no action on trade and outsourcing. Trump promised trade interventionism, but he didn’t really do it.

The 3rd issue was what led to his impeachment – using the levers of power to prosecute political opponents – in this case Biden. This is, after all, the reason why Nixon was forced to resign. Trump openly wants to jail Biden. He wanted to put Hillary in jail, now Biden, next Obama. Where does it end? He not only did that, but also started sending the American military against US citizens and politicized the Department of Justice in a way we have never seen in America. That’s just a total no-no for me. Any use of government power to stile political opposition, I don’t like.

The 4th issue is his stock market peg. I simply find it ridiculous that Trump artificially inflated a stock market bubble in order to bribe Americans to reelect him. He spent $6 trillion between Fed balance sheet expansion and budget deficit expansion this year to do that. That is one very expensive reelection campaign. This is a bubble of Dot Com era proportions. It is a complete absurdity. And just like the 2000 bubble hurt the economy for a decade, so will this one. I still believe in markets and price discovery but I think the US government should just let markets work themselves out. Rigging the indicator of the economy to paint a false picture is Autocracy 101. Trump’s stock market interventionism is a total no-no for me.

And finally the 5th issue is the mishandling of the COVID pandemic. Public health is one of the main jobs of government. Without public health you end up with a bad economy very quickly. We now have tens of millions of unemployed and a smaller economy and it will be a while before the economy gets back to its former size. Big sectors like entertainment, travel and restaurants are all wrecked. Trump doesn’t seem to think that health is something the government should provide and that is why he doesn’t involve the US government in the public health efforts. That in turn has the US with 20% of the world’s deaths despite having only 5% of the world’s population. In every way possible, his handling of the pandemic is a debacle and we need a President who will reverse course on this issue. The private sector can’t ensure public health. It is not its job to do that. Trump lack of understanding of health care is why “his” health plan in 2017 failed. He didn’t know what he was doing at all. One of the main issues that America needs to address next is come up with a public health care option for its large population of small businessmen, contractors and part-time workers. We have 50 years of private sector health care and it is clearly not up to the task of providing health care to that population. And we need to lower drug prices.

All in all, I was excited about voting for Trump in 2016 but I was quickly disappointed by him on many issues. He engaged in egregious policy overreach on many other issues. His Presidency revealed his lack of professionalism and competence in 2017. Trump didn’t stop his descent in 2018 and 2019 and ultimately he became the worst President in US history in 2020 with the pandemic screwup. And currently he is still digging. He never reached rock bottom. At this point, anybody else would be better. By now I would have rather voted for Hillary in 2016 than Trump. I am not one to regret my decisions often but I certainly have regretted that one.

I often think of an alternate world, one in which Trump passed the Border Adjusted Tax in 2017 and where the outsourcing issue gets resolved naturally without singling out, aggravating and humiliating China. There is no COVID then. The Midwest sees revitalization. I think of a world where Trump came up with some form of public-option health care or just any viable alternative to Obamacare’s private sector debacle for the freelancer population. I think of a world where the monopsony powers of Big Tech are regulated and that in turns results in great economy dynamism and much bigger corporate formation. Instead, we have an “animal spirts” economy of gamblers who sit around and do nothing but day trade 5 stocks because the economy is closed due to a virus and because there are only 5 viable business models due to massive corporate concentration since government regulation is absent. We have a smaller economy because Trump embarrassed China so badly that they sent us virus. Make no mistake about it, this virus is Trump’s fault and his ridiculous Art-of-the-Deal approach of maximum humiliation of his opponents (in order to “soften” them). That might be an approach that works in business, but not between nation states. Diplomacy is very important and necessary. All of Trump’s bad economic policies got exacerbated by a disastrous foreign policy. Even the easiest monetary and fiscal policy ever and $10 trillion more in debt in just 4 years can’t rescue us from this debacle now. It didn’t have to be this way, but it is. And that’s why the Trump Presidency is ending.

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