A reader had posted the following comment on my blog few days ago:
I am an avid reader of your blog. I am a faculty in a US engineering school (working in the area of econometrics) and follow economic news with interest. That is how I found your blog and have been reading it for the last few years. In general, I am quite impressed with your articles and am keen to follow your thoughts – for example, I was curious about how you rated the budget. But over the last 6 months your articles on the US election and Trump in general are quite disturbing to me. I have been wanting to respond to your support to Trump.
To clarify, I am right of center in economic policy and quote liberal in religious matters. In India, I support the BJP govt. at center. So, I am not a pseudo-secular guy taking issue here. As a morally upstanding person, how can you support Trump? Forget his economic policy, I have seen all his 15+ debates and never does he come across as a sensible person. I mean he is openly fascist, misogynistic and thin skinned. His statements on John McCain among other things clearly show what kind of a person he is. Given this background, how can you support him? What standards are you setting for leadership if Trump is a good leader? To be sure, I am not blind to the fallacies of NYT and American press and Hilary Clinton. But Trump’s ignorance of facts and his lies should make you question his motives. But I see you support him with little reservation. His cabinet is full of billionaires with no scruples who made money in the financial sector (a group of people you criticize) – so how do you justify your support?
I thank him for engaging rather than giving up on reading the blog in protest. I am not sure that I will be able to answer him convincingly – i.e., persuade him successfully. But, it gives me an opportunity to engage and to sharpen my own understanding of the phenomenon of Trump.
I had written two op.-ed.s in MINT on Trump, the candidate. You can see them here and here. To a large extent, the two columns spell out my reasons and also my reservations. It is not as though the case for Trump, in terms of his personality, was clear-cut. But, that is also his strength.
One of the things I had mentioned in my second column – published on Nov. 8 morning in India – was that with Mr. Trump in office, democratic accountability would be safe, for his every move of hands and lips would be scrutinised microscopically. That is being proven correct, to the point of inciting instability and a breakdown of civil order. In fact, their goal is either an impeachment or worse. The so-called Liberals (illiberals, in reality) might get what they want and I hope they live to regret it deeply.
Whereas with Hillary Clinton, there would not be much scrutiny at all. That was based on the accountability (or, the lack thereof) enforced on President Obama. One only had to read Jeffrey Sachs’ conversation with ‘Project Syndicate’ to understand that. One of the principal reasons – if not the principal reason – for the global refugee crisis has been his botched handling of Libya and Syria. Ms. Clinton was party to at least one of the decisions, if not both.
On Russia, United States has gone back on the promise of NATO non-expansion in Russian sphere of influence. What the United States did in Ukraine was thoroughly objectionable as was the regime change pursued in Syria. President Trump was perfectly correct in posing a question in the O’ Reilly interview if the United States was innocent. Read what Senator Chuck Grassley said about the United States’ interference in elections overseas.
It is not just Jeff Sachs but also Prof. Steve Cohen who has been writing about it and talking about it for quite some time.
How much did the intelligentsia and the media hold Obama accountable when he was in Office and now? Zilch. Nada. Nothing.
On the so-called Russian interference, I think commentators have to decide which way they want to go: Do they want to consider their victory in the popular vote (contributed to by about three counties in California) as legitimate or do they want to say that Russia interfered with and succeeded in changing the final verdict? They cannot have both. The 7-minute interview of former Democratic Congressman (Ohio) Dennis Kucinich for Fox Business News in the ‘Morning with Maria’ programme is worth watching.
On China and as to why the relationship needs a reset, one has to read a lot more to understand the agenda of the new American government. It is not a knee-jerk or impulsive decision. We may not like it and we may think it is unjustified – I, for one, do not – but that is the reality. American relationships with nations are reset at different intervals, depending on their national interest and geo-strategic calculations.
One has to read David Shambaugh’ ‘China’s future’. Robert Luttwak’s book on China (The rise of China vs. the logic of strategy), Richard McGregor’s ‘The Party’, James Kynge’ ‘China shakes the world’, columns by Jamil Anderlini in FT and the regular briefings coming out of the Mercator Institute of China Studies. Or, from the economics angle, read the papers of Peter Schott and Justin R. Pierce. I had blogged on them.
George Yeo, the former Foreign Minister of Singapore spoke to the Harvard Business Association in Hong Kong. While he clearly felt that a conflict between the U.S. and China would not be in the best interests of the rest of the world, he did say the following with respect to China:
China is not like that. This is a civilisation which has deep instincts of its own past and of its own nature. And because of that, China will never harmonise with the rest of the world. Whether we’re talking about cyber space, cultural policy or capital markets, China will never harmonise with the rest of the world. [Link]
Such is their blind hatred for and prejudice against Donald Trump that they could ignore the lessons of history and even contemporary reality and look up to China to uphold liberal order!
It was left to James Kynge to expose their stupidity of hailing Xi Jinping as the champion of the liberal world economic and political order:
Yongjin Zhang, professor of international politics at the University of Bristol, sees a chasm between the way China defines globalisation and the way the wishful high priesthood of global capitalism at Davos wanted to understand it. ..
… But China’s investments and diplomatic alliances are overwhelmingly in the developing world. In this sense, its vision is not global but subglobal; it is aiming to influence those countries where it can make a difference, reap the rewards and remain insulated from western demands to liberalise its political system and inculcate democratic values. [Link]
Of course, China exposed the hollowness of the anti-Trump and pro-China brigade – both moral and intellectual – with its abduction of a businessman from Hong Kong and now, the British and American Universities are getting a taste of their own medicine of intolerance and illiberalism in the name of political correctness and diversity. See here and here. Also, please remember to read Prof. Mark Lilla’s conversation with the Chronicle of Higher Education in January titled, ‘Campus Identity Politics Is Dooming Liberal Causes. (It could be behind a paywall, though).
On protectionism, it is blithely asserted that technology and not trade that is the problem. That is incorrect. Often repeated, many hope – and they have probably succeeded – that lies would stick. Readers should check out the research of Peter Schott (of Yale University) and Justin R. Pierce of the Federal Reserve on the ‘role’ of China in the crisis of jobs in U.S. manufacturing and in the destruction of communities within the United States.
Many commentators try to appear very erudite by haughtily proclaiming that it was not trade but technology that had led to the employment and other social impacts in U.S. communities. By sheer dint of repetition but not rigour, they seek to establish this as a fact. It is almost impossible to disentangle the effect of trade from technology on U.S. manufacturing employment. Both worked in tandem. It is also difficult to say if technological developments boosted international trade or the other way around. I am sure that there is a bit of both going on. But, trade had an important role to play in the angst that prevails in the United States. That is what the sustained contribution of Schott and Pierce seeks to establish.
Yes, on balance, India and China benefitted considerably (the latter more so) from globalisation but many Americans did not. The American capitalists who profited did not find any reason to nor did the politicians compel them to share their extraordinary prosperity with low-wage workers and others. The result is a clamour for jobs protection. Some of us will be losers but that is inevitable. These things – trade and immigration policies – come and go in cycles. The people to be blamed are not the current President and his administration but the ones who were in office before that and did not do much about the uneven distribution of the benefits of globalisation.
Some – with a bit of conscience – would concede the problem but would assert that Trump’s solutions (to walk back on TPP, for example) would not work and that the situation would be made worse. May be or again, may not. Who knows? Professor Ha-Joon Chang at Cambridge might have different views on it. After all, didn’t these economists predict an economic and financial market meltdown after Brexit but had utterly failed to foresee the real meltdown of 2008?
As for immigration, again, many countries have quietly tightened their immigration rules in the last several years, in response to slowing economic growth and vanishing. They may not have spelt out racial or religious criteria but income criteria and they end up affecting a particular country or set of countries or religion.
Similarly, President Trump’s order did not target a particular religion but only citizens of particular countries and that too for a temporary period until some reviews are done. Let us not forget that citizens of many EU states and a considerable chunk of the American population have supported the decision. In fact, only 20% disagreed with the motion that banning would be bad. Quite a large proportion chose to remain silent as some Americans did during the election campaign period.
Of course, it is possible to argue that leaders should not pander to the population’s baser instincts. But, it is even better to ask the question as to why things came to this pass. That responsibility lies with the elites, the previous administration, governments in Europe and with the Muslim community itself. It is wrong to question the manifestation while ignoring the underlying causes. Well, not a surprise because that is what American policy elites have done over the years. Ask the Federal Reserve. They are the experts in that.
On the financial sector
As for the financial sector, yes, I had already done one blog post on President Trump’s appointments and the policy agenda (allegedly) driven by Gary Cohn (ex-Goldman Sachs). I had mentioned this in my column for MINT on November 8 too. This is an area of concern. But, three caveats. One has to wait and see the specific policy decisions taken. Two, one has to make sure that one does not rely on mainstream media to know about them. Three, some of the worst financial sector capture happened in the era of Bill Clinton and Obama and, of course, George W. Bush, Jr. Just sample this story on Mary Jo White, the SEC chair, in the Obama Administration.
Of course, there is a limit to how far one could throw the charge back at the previous government. Trump has been elected to drain the swamp and not clog the drains further with swamp of his own, esp. in the Finance Sector. This one needs watching, for sure.
On Trump’s billionaire cabinet and conflicts of interest
The media is watching like a hawk on the so-called conflicts of interest of his Cabinet with respect to China and other aspects of his policy. So, I will hear plenty of it and that, in itself would be an effective check and balance on them. That said, I would be very careful in basing my conclusions in these polarising matters from the reporting in the mainstream media. His Cabinet members are billionaires and, therefore, they are unlikely to be stupid or self-destructive.
President Trump’s tweets on Nordstrom negotiations or cancellation of its contract with his daughter were unacceptable and, more importantly, stupid. There was no upside to his tweeting on them. Again, perhaps, he is not so stupid as the intellectuals were when they looked up to the Chinese leader to stand up for globalisation and liberal principles. I will come to that in a moment.
As for President Trump’s chaotic first four weeks, read what John Mauldin has to say:
The media will be writing about how Trump can’t keep people and about all the chaos in the White House and other parts of government. But from Trump’s perspective, and given his management style, that’s not necessarily bad in terms of his longer-term goal of changing things.
We have not had a president with this type of management style in my lifetime. Since it’s not something that any of us are going to be familiar with, it is going to make some of us uncomfortable until we get used to it (and some people never will).
If you listen to the media you might have the impression that the Trump transition team is in complete disarray. Talking with leaders of the transition team certainly didn’t leave me with that impression. They have broken the transition process down into over 30 departments and have created a “landing document” for each department. The analogy they are using is that this process is like planning an invasion, and they are going to hand the landing document off to the “beachhead teams” who will then execute the plans.
I was briefly allowed to look at (without actually being able to read) the plan for one cabinet-level department. It appeared to be about 100 pages plus of serious detail as to exactly what executive orders would need to be removed and added, what personnel would have to be replaced (both appointees and regular staff), what policies would need to be changed, and so forth.
I was told that this level of planning was being done for every department. My impression is that there are a lot of people from various think tanks and others with experience in the presidential transition process who are involved in directing the plan for each department. That level of detailed planning doesn’t happen in less than two months. My guess is that some of that thinking has been going on for years, and now it can be implemented.
Steve Moore passed on a story to me. He and my friend Larry Kudlow were meeting with Trump, and Trump asked them if they would like to be part of his economic advisory team during the campaign. They looked at each other and back at Mr. Trump and said something to the effect of, “You can’t use us. We believe in free trade.” And Trump then said, “But we agree on nearly everything else. Let’s agree to disagree on trade and figure out where we can work together.”
Not many presidents are willing to have that level of disagreement from the outset. That is somewhat comforting to me. [Link]
In the same speech, referred to earlier, George Yeo, like John Mauldin and Dr. S. Jaishankar, India’s foreign secretary, had some sensible advice to offer on how to understand President Trump:
We do know that Mr Trump has certain deep instincts. He sees a lot of problems in American society. He wants to reinvigorate it. So trade has to be fair, in his mind. I’m not sure it’s going to help just by arm twisting automobile companies to manufacture in the US, because the global economy is much more complicated than that.
But it does win him applause from the gallery, and some things we must expect him to do for political reasons. As he himself has said, he’s from Wharton, so he can’t be stupid. And he’s not. To think that he is would be a serious miscalculation.
He says, ‘Look, we got to deregulate’. He wants to simplify the tax code and reduce the general level of taxation. He wants to revamp infrastructure in America, much of which has gone to disrepair. And that’s the right direction to go. He wants to control the borders better. Again, he may have made outrageous remarks, but the deep intention is, ‘We’ve got to have a handle on illegal immigration, and also to control conduits which may bring in radicals and terrorists’.
But there are two things which are troubling. One, it is easy to spend, it’s easy to reduce taxes, people would cheer you. But how do you cover the deficit? The other area which is a bit troubling is what appears to be a very deep conflict between Mr Trump and the intelligence agencies. He has become very distrustful of them.
And he takes a practical approach towards international security. Must we interfere in Syria? Was it right – Iraq, Libya, and the cornering of Russia? Maybe this is driving them into the arms of China. Does it make sense?
There are many people whose entire careers are formed on certain perspective and he’s challenging them. It’s important to get past the common criticisms against Mr Trump, quoting him against him, laughing at some of his inanities, and ignoring his deep purposes. I think it’s much more important to look at his deep purposes because he’s not a man to be disregarded. [Link]
I am not seeking a spiritual guru to demand an upright moral code. I am being realistic. Not too many contemporary politicians would pass the test. There is very little to choose between them. Lying is a policy and political instrument. Further, I have no idea as to who is lying – either the President or those who call him a liar. The mainstream American media and the world over carry a far less trust quotient than the current American President.
Just consider this: four more years of the failed policies of the last three and half decades would have made the world more dangerous, more unstable and more fertile for a real demagogue and a fascist.
The biggest charge (a criminal one at that) against many of those who rail against Trump is that they did not call out the egregious excesses and wrong things that were going on in the world in the name of globalisation and liberal world order. Even now, there is no admission of guilt, let alone contrition. Instead, they are gunning for President Trump, who is the consequence of all that went wrong.
The world is where it is today – feeling unsafe, unsure and uncertain – not because of him because he has been in office for less than thirty days but because of what has been going on for the last thirty years.
As they seek to destroy President Trump and his agenda, they are seeking to destroy their own creation. But, if they succeed in doing so, they will only be removing the manifestation or the symbol of their acts and crimes of omission and commission. They will feel vindicated. They will go back to their old ways. Nothing in their behaviour before and after the election in America, before and after the Brexit referendum suggest that they have learnt the lessons, least of all, the lesson of humility. That is the biggest danger to the rest of the world. Not President Trump or his policies.