These are difficult days in the Trump administration. Really? Difficult days in only two weeks on the job? No Bereans were happy with Mr. Trump’s personal character, and no Bereans were happy with all of his policy prescriptions. Yet most of us believed that Mrs. Clinton was a worse evil, and all of us thought that at least parts of his agenda could be very positive. I have focused on the economic impact of his agenda, and while I was initially negative on his trade views, I thought they might be more difficult to implement than the things I viewed very positively about his program, i.e., the deregulation and tax reform focus. Unfortunately, Mr. Trump’s actions threaten his entire agenda, which means we may end up with little to nothing of the positive economic agenda, and as much harm as Mr. Trump can do unilaterally on the negative agenda.
Let’s leave aside the wisdom of his executive order on immigration (in isolation), but rather think about collective wisdom of all his actions. Mr. Trump is characterized by his allies as a disrupter of the status quo, and I think that is a fair characterization. So Mr. Trump is now disrupting anything and anybody. And that–if not changed–will threaten his whole agenda. The bottom line? If Mr. Trump does not learn quickly which battles to fight today, and which to leave until tomorrow, he will find himself embroiled in battles on all fronts. And any allies he has on one issue will be his enemies on another–and hence he will quickly find himself in a very lonely place.
Mr. Reagan was widely considered to be an effective if not great president. Many of his supporters would argue for the latter, but almost everybody could agree to the former. Yet he had only three big agenda items–three big rocks–and he was only able to get two of them done. He rebuilt the American military and confronted the Soviet Union (ultimately leading to their dissolution), and he was successful and unchaining the American economy and revitalizing the American spirit. Yet he failed to get the budget under control. Not for lack of trying, as his budget submissions were called “scorched earth policies,” and were routinely denounced as “dead on arrival” by Democratic speaker of the house, Tip O’Neill. There was a price to be paid for more defense spending and tax cuts, and that was higher domestic spending. But as that old Meat Loaf song says, “Two out of three ain’t bad.”
Mr. Trump, however, is reeling off attack after attack on everything, shooting down his friends (Australia, Japan) and his enemies (Iran). And of course he insists on making many that should be our friends our enemies (Mexico primarily, but also China to a degree), and a real enemy (Russia) he is rather nonchalant about. Now we are hearing that Obamacare repeal may not happen, but we may get a repair. And who knows where tax reform is? If he doesn’t seriously focus on tax reform it will be swapping one crony system for another. A good leader would set a few key items up as what needs to get done, and I would suggest no more than 3 initiatives in a first term. Then relentlessly focus all attention on that agenda. If you succeed, you’ll likely get a second term.
I have repeatedly criticized Mr. Obama, and rightfully so, on his continued hostility toward business. But in his “America First” policies, Mr. Trump likewise turns his guns on American industry if it doesn’t fit with his view on the way markets should operate. How is this any different from Mr. Obama? Mr. Obama wanted to kill coal, and basically did. Mr. Trump has just changed the business enemies and friends list. We have one crony capitalist changed for another. These actions will create the same kind of business uncertainty that Mr. Obama did, just for different businesses. You could see it on the conference calls for this last week’s earnings reports. How would company X handle the new administration policies? Many cited uncertainty over his policies. That kind of uncertainty will slow even his pro-growth initiatives. If Mr. Trump can’t discipline himself, then he may find himself the Squanderer-In-Chief, and unable to get much of anything done.
There is good news for Mr. Trump, of course, in the continuing melt-down of the Democratic party in their response to him. But just as Democrats don’t know how to deal with him, neither do businesses. And that can’t be a good thing.