3 Lessons from Trump’s America
Published in Les Échos
(France) on 31 October 2017
by Jean-Marc Vittori (link to original)
A year after his election, Donald Trump has not made any major changes. The only progress made has been by decree. More than being just amateurism, democracy itself is at stake.
The elephant has not even given birth to a mouse. A year after being elected president of the world's largest economy, and nine months after taking power, Donald Trump certainly leaves a huge media trail. As a proven tweeter, the president of the United States overloads the information space more than any of his predecessors. But his political trace is barely visible, and his economic trace is minuscule. Rarely have so few decisions been adopted at the beginning of the term. In half the time, and in a country that is not renowned for its political effectiveness, the new French president has passed a seemingly important law on labor and created a disruptive budget. This American powerlessness provides three lessons that we would be wrong to ignore.
The Easiest
First, the analysis: Donald Trump built his campaign on strong promises. Rebalancing the budget, eliminating the universal health insurance introduced by “Obamacare,” taxing Mexican imports at 35 percent and Chinese imports at 45 percent, expelling millions of illegal immigrants, deregulating finance, encouraging coal, launching $1 trillion worth of major works, lowering corporate tax to 15 percent, etc. Remember, after a moment of astonishment, investors applauded his election. The stock indexes broke all their records.
But action did not follow. It is too early to know if the president will succeed in passing his budget plans. But it is fair to say that the proposals submitted to Congress fall well short of this program, whether on lowering taxes or controlling the deficit.
On the other hand, it is possible to identify first trends on other major issues. On international trade, Donald Trump did what was easiest: denounce the Trans-Pacific Partnership, which aimed to stem the rise of Chinese power in Asia, and harden the U.S. position in the renegotiation of NAFTA, the trade agreement with Mexico and Canada. He could block the Dispute Settlement Body of the World Trade Organization by refusing the appointment of new judges, which must be decided unanimously by the 164 countries in the organization. He has launched an investigation into steel imports, like his predecessors. But prohibitive tariffs seem to have been forgotten.
Opposition from the Judges
Donald Trump has not had more success in healthcare. The repeal of Obamacare seemed an easy target, as health care has pitted congressional Democrats and Republicans against each other for more than 20 years. But the repeal bill failed four times on Capitol Hill. So, the president took another path. He decided, by decree, to allow less extensive health insurance schemes and to remove the system's federal state subsidies.
When opposition does not come from Congress, it comes from the judges. The third version of the anti-immigration decree, which sought to prohibit entry into the United States by citizens from seven Muslim countries, was retried by a judge from Maryland and another from Hawaii. When the judges have no say, an independent agency may decide to oppose the president. In finance, Donald Trump has named leading figures who fully support deregulation, like Jay Clayton, the new boss of the SEC, the market watchdog. The Consumer Financial Protection Bureau has just strengthened rules for payday lenders. The president seems to have more success with environmental regulations. States and cities do not hesitate to counter federal action in this area.
Great Unpreparedness
Trump’s first year could be summed up quite simply: The president is crazy and the American machine of counter-powers, the famous "checks and balances," works perfectly. But we must go further. Firstly, the president has shown himself to be totally unprepared, both in the choice of his teams and the outlines of his policy. He is not the only one. In the United Kingdom, all the heralds of the "leave" campaign disappeared from the political landscape in the aftermath of the vote, and 16 months later, we still do not know what "Brexit" means. The same amateurism can be seen by Syriza, in Greece, and also from the Front National and Marine le Pen in France, as we saw during the notorious second-round televised debate. Unpreparedness is a hallmark of populism.
Second lesson: the fabulous ability to tell stories. This is the case for investors, who bought into a policy that has not materialized, and who are told other stories to pay more and more. This is the case for Trump voters, many of whom continue to trust him despite his inability to act. And this is the case for Trump and his advisers, who still want to believe that the drop in taxes will make tax revenues soar.
Disrespecting Democracy
The final lesson is more worrying. American presidents have often tried to get around congressional blockades. But with Trump, it is systematic (health, trade, finance, etc.). It's no longer just a question of efficiency, it has become a question of respect, or rather disrespect, for democracy. The president's attitude toward the media raises the same question. The free world is not quite what it was.
The elephant has not even given birth to a mouse. A year after being elected president of the world's largest economy, and nine months after taking power, Donald Trump certainly leaves a huge media trail. As a proven tweeter, the president of the United States overloads the information space more than any of his predecessors. But his political trace is barely visible, and his economic trace is minuscule. Rarely have so few decisions been adopted at the beginning of the term. In half the time, and in a country that is not renowned for its political effectiveness, the new French president has passed a seemingly important law on labor and created a disruptive budget. This American powerlessness provides three lessons that we would be wrong to ignore.
The Easiest
First, the analysis: Donald Trump built his campaign on strong promises. Rebalancing the budget, eliminating the universal health insurance introduced by “Obamacare,” taxing Mexican imports at 35 percent and Chinese imports at 45 percent, expelling millions of illegal immigrants, deregulating finance, encouraging coal, launching $1 trillion worth of major works, lowering corporate tax to 15 percent, etc. Remember, after a moment of astonishment, investors applauded his election. The stock indexes broke all their records.
But action did not follow. It is too early to know if the president will succeed in passing his budget plans. But it is fair to say that the proposals submitted to Congress fall well short of this program, whether on lowering taxes or controlling the deficit.
On the other hand, it is possible to identify first trends on other major issues. On international trade, Donald Trump did what was easiest: denounce the Trans-Pacific Partnership, which aimed to stem the rise of Chinese power in Asia, and harden the U.S. position in the renegotiation of NAFTA, the trade agreement with Mexico and Canada. He could block the Dispute Settlement Body of the World Trade Organization by refusing the appointment of new judges, which must be decided unanimously by the 164 countries in the organization. He has launched an investigation into steel imports, like his predecessors. But prohibitive tariffs seem to have been forgotten.
Opposition from the Judges
Donald Trump has not had more success in healthcare. The repeal of Obamacare seemed an easy target, as health care has pitted congressional Democrats and Republicans against each other for more than 20 years. But the repeal bill failed four times on Capitol Hill. So, the president took another path. He decided, by decree, to allow less extensive health insurance schemes and to remove the system's federal state subsidies.
When opposition does not come from Congress, it comes from the judges. The third version of the anti-immigration decree, which sought to prohibit entry into the United States by citizens from seven Muslim countries, was retried by a judge from Maryland and another from Hawaii. When the judges have no say, an independent agency may decide to oppose the president. In finance, Donald Trump has named leading figures who fully support deregulation, like Jay Clayton, the new boss of the SEC, the market watchdog. The Consumer Financial Protection Bureau has just strengthened rules for payday lenders. The president seems to have more success with environmental regulations. States and cities do not hesitate to counter federal action in this area.
Great Unpreparedness
Trump’s first year could be summed up quite simply: The president is crazy and the American machine of counter-powers, the famous "checks and balances," works perfectly. But we must go further. Firstly, the president has shown himself to be totally unprepared, both in the choice of his teams and the outlines of his policy. He is not the only one. In the United Kingdom, all the heralds of the "leave" campaign disappeared from the political landscape in the aftermath of the vote, and 16 months later, we still do not know what "Brexit" means. The same amateurism can be seen by Syriza, in Greece, and also from the Front National and Marine le Pen in France, as we saw during the notorious second-round televised debate. Unpreparedness is a hallmark of populism.
Second lesson: the fabulous ability to tell stories. This is the case for investors, who bought into a policy that has not materialized, and who are told other stories to pay more and more. This is the case for Trump voters, many of whom continue to trust him despite his inability to act. And this is the case for Trump and his advisers, who still want to believe that the drop in taxes will make tax revenues soar.
Disrespecting Democracy
The final lesson is more worrying. American presidents have often tried to get around congressional blockades. But with Trump, it is systematic (health, trade, finance, etc.). It's no longer just a question of efficiency, it has become a question of respect, or rather disrespect, for democracy. The president's attitude toward the media raises the same question. The free world is not quite what it was.
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