Im-Politic: Shutdown Lessons – So Far

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border security, border wall, China, Congress, Democrats, E-Verify, election 2020, establishment Republicans, government shutdown, illegal alien crime, illegal aliens, Im-Politic, Immigration, Mitch McConnell, Nancy Pelosi, North Korea, Paul Ryan, Populism, Russia-Gate, shutdown, Swamp, Trade, Trump

Since the fight isn’t over by a long shot, it’s chancy at best to try to figure out many of the biggest implications of President Trump’s decision to reopen the shut down parts of the federal government despite getting no new funding for a Border Wall or any new physical barriers aimed at strengthening border security. Still, here’s what looks reasonably clear at this stage of the struggle:

>First and foremost, the shutdown situation, context, and therefore even the verdict were set in stone more than two years ago by the Russia collusion/election cheating charges, by the opposition (mainly passive) to President Trump’s immigration agenda of the establishment Republicans still so prominent in Congress (and not just in its leadership) during the Trump administration’s first two years, and the resulting politics of impeachment.

That is, as I’ve written previously, from his first day in office, Mr. Trump needed to secure the protection of Congressional Republicans – including their establishment ranks. Therefore, he needed to prioritize their top issues, like Obamacare repeal and a tax cut heavily weighted toward business, rather than his top – populist – issues, like fixing America’s broken trade and immigration policies.

It’s true that in his second year, the President has ramped up the pressure on leading trade predator China and on other mercantile economies (with his steel and aluminum tariffs). But unlike the Border Wall, those measures didn’t require Congressional funding, or any form of approval from Capitol Hill. (The new trade deal with Mexico and Canada to replace the North American Free Trade Agreement seems to be moderate enough to at least have attracted mild endorsements from the Big Business-run Offshoring Lobby.)

And if establishment Congressional Republican leaders like former House Speaker Paul Ryan and current Senate Majority Leader Mitch McConnell weren’t going to go the mat for the Wall (which of course would also have required helping to persuade some moderate Democrats to come along as well) when the GOP controlled both houses of Congress, there was absolutely no way Mr. Trump could have generated Wall funding once the Democrats gained control of the House.

Incidentally, it’s being reported by at least one non-anonymous source with first-hand knowledge that the President himself provided some confirmation for this argument – by blaming Ryan for “having ‘screwed him’ by not securing border wall money when Republicans had the majority….”

>If you’re going to shut down the government, and especially if you’re planning to dig in your heels for the duration, shut down the right agencies. For example, if the issues are illegal immigration and law enforcement, don’t shut down the Department of Homeland Security – which is chiefly responsible for protecting the nation’s security in these areas. If you’re a Republican, don’t shut down the Agriculture Department, whose rural constituency is overwhelmingly Republican and conservative, and which was already unhappy enough with the President about China trade policies that had pretty much shut down America’s immense soybean exports to the People’s Republic. Also if you’re a Republican don’t shutdown the Federal Aviation Administration – because victims are especially likely to be businessmen and women and other relatively affluent voters – who provide lots of actual and gettable Republican votes.

>Consequently, the politics of shutdowns, and of some aspects of political populism, are becoming clearer than ever – especially if they’re long ones. And many of these should have been obvious from the start.

Most obvious, voters of all kinds – populists and non-populists alike – who are receptive to anti-government arguments get a lot less anti-government when the affected services affect them directly.

Less obvious, populist voters themselves say and act happy to see populist politicians act like disrupters when it comes to the mutually supportive networks of corruption and propaganda set up by establishment politicians, lobbyists, consultants, think tank hacks, and mainstream media journalists in the Washington, D.C. Swamp The same goes for establishment policies they believe have brought them nothing but trouble, like mass immigration, offshoring-friendly trade deals, and pipe dream foreign wars and similar ventures.

What they don’t want disrupted is the steady stream of government services that make their lives easier – and even viable in the first place.

>For reasons like the above, it’s unimaginable that Mr. Trump will follow through with his threat to shut down the government again if he can’t persuade Democrats to compromise acceptably on Wall funding. His best hope for some kind of partial win is to portray himself as the reasonable party, and the Democrats as the arrogant, rigid extremists.

>In that vein, expect continued, and even more frequent administration activity spotlighting crimes by illegal aliens – especially in the districts and states of key lawmakers. But success is also likely to require claims (which are entirely credible, in my opinion) that illegal aliens steal jobs from native-born Americans and/or drive down their wages, and that the leading victims include minority Americans.

>One particularly effective tactic would be for the administration to push for mandating that businesses use the E-Verify system to prevent illegal aliens out of the national job market. E-Verify is currently being used on a voluntary basis by many companies (not including most Trump-owned companies), and by all accounts is extremely accurate. (That is, it snares virtually no innocents in its electronic net.) But its use so far has been voluntary, meaning that companies that blow it off get legs up on their competition by virtue of easy access to bargain-basement illegal employees.

>Another potentially effective talking point that the administration has strangely ignored: focusing on the sheer numbers of foreigners who’d be likely to swamp U.S. borders – and the country’s asylum system – without more effective physical barriers. The administration and all of its spokespeople and media supporters should keep asking the question of Democrats: How many tens of millions of these would-be immigrants and asylum-seekers can the United States afford to admit?

>If these Trump efforts fail, declaring a national emergency looks like the President’s best bet to reestablish credibility with his base and perhaps with fence-sitting voters and Members of Congress, and even some legislative opponents.

Such a move could also go far toward putting the most politically damaging aspects of this issue behind him. After all, there’s little that opponents can do about such a national emergency declaration other than try to tie it up in the courts. And Mr. Trump could – credibly, in my opinion – respond by using information about illegal aliens crime to accuse them of endangering their countrymen and women’s security. So even if rulings by friendly judges hold up actual Wall construction, Mr. Trump’s political position could benefit.

>The President also could well be tempted to score political points by pressing harder to win some foreign policy victories. A China trade deal and significant progress in limiting the nuclear weapons threat posed by North Korea are the two most obvious candidates, but presidential over-eagerness could seriously undermine major American interests.

I’m most worried about the administration’s dealings with Beijing, given the talk out of China of ending the current trade conflict for the foreseeable future by buying lots more American goods and services. More Chinese imports from the United States would be welcome – no mistake about that. But not if the price is letting Beijing off the hook for its ambitions literally to steal and subsidize its way to global supremacy in key technologies that not so coincidentally have big defense implications.

>Finally, re shutdowns themselves, the policy of requiring furloughed workers to do their jobs without getting paid strikes me as completely unacceptable. In other circumstances like this, at home or abroad, these practices are called “forced labor” or “wage theft.” And they’re rightly condemned. Nearly as bad, these furlough practices help pro-shutdown politicians curry favor with their supporters while mitigating or at least postponing the harm to the public – including those supporters.

In other words, if you’re for a shutdown, make it a real shutdown. For any agency whose funding is cut off, the workers stay home – and the jobs they do don’t get done. If that means chaos ensues and public safety is put at risk, too bad for shutdown-ers. They’ll own it.

>Speaking of owning it, that’s the situation that House Speaker Nancy Pelosi now finds herself in not only regarding border security but every issue that comes up in national affairs. In particular, when you show you’ve gained enough power to win political battles, you also show that you’ve gained enough power to frustrate initiatives that may be unpopular among your caucus in Congress, or some of your caucus, but that may be popular with everyone else. So forget about the the idea that Pelosi is now free to conduct a campaign of all-encompassing resistance to the Trump agenda, and to dictate terms of those proposals that she is willing to consider.

>And finally, that’s one of the many reasons it’s way too early to predict how the shutdown fight will impact the next presidential election. The main additional reasons: There’s still a long ways to go before that campaign achieves critical mass, and any number of events could turn the political calculus upside down. And similarly, it’s glaringly obvious that the Trump era news cycle – along with the national attention span – is already the shortest in recent memory – and could well keep getting shorter.

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Following Up: More on the Trump Tariffs

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aluminum, Australia, Canada, David J. Lynch, Defense Department, defense manufacturing base, downstream industries, European Union, Following Up, George W. Bush, Gordon Hanson, James Mattis, Kentucky, manufacturing, Mitch McConnell, multiplier, Paul Krugman, Paul Ryan, steel, steel-consuming industries, tariffs, terrorism, The New York Times, Trade, Trump, U.S. Business and Industry Council, United Kingdom, Washington Post, Wisconsin

I could spend all day today rebutting ignorant, biased, and simply inane commentary on President Trump’s Thursday announcement that stiff tariffs will be imposed on U.S. imports of steel and aluminum (along with watching the plethora of college hoops on TV today!). Instead, I’ll offer some follow-on thoughts to the tariff talking points I posted yesterday.

>The European Union in particular seems outraged by the Trump decision, and has threatened to retaliate with tariffs on its own on a wide range of products, including some from Wisconsin and Kentucky. These of course happen to be the home states of House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. It’s an understandable, and certainly clever, impulse, and in 2003, something like it succeeded in convincing former President George W. Bush to lift steel tariffs he had imposed 18 months earlier.

Of course, Bush 43 was no Trump. He was a committed free trader and globalist, and/or agent of of America’s powerful corporate offshoring lobby. But here’s something that needs to be considered by Messrs Ryan, McConnell, and other lawmakers at whom the Europeans or other powers may take aim: What if, shortly after September 11, Osama Bin Laden had threatened to destroy major targets in their home states or districts unless the United States withdrew militarily from Afghanistan and left him alone. Would the affected legislators have run to the White House to plead for an abandonment in the war on terror? Not likely.

I know that war and economics are different (although given the importance of economic strength as a source of military strength and overall national success, the similarities and overlap are widely overlooked). But don’t doubt for a minute that American politicians’ reactions to these European threats will be watched closely in all the world’s capitals, and that signs of weakness will be factored into foreign decisions to abide by or violate current trade agreements at the U.S.’ expense, or take other measures to gain advantage in their own, American, or third-country markets that clash with free market and free trade norms.

So here’s hoping that American Members of Congress and Senators will show some backbone, and make clear to the nation’s trade partners that they won’t permit themselves and the country at large to be hanged separately.

>Speaking of hanging separately, quite naturally, U.S. steel- and aluminum-consuming industries are concerned that their global competitiveness will be harmed if they’re forced to use more domestic metal in their products. They need to keep two considerations in mind. First, if foreign governments are permitted by Washington’s inaction to dump major American industries like aluminum and steel out of existence, consuming sectors would be next in line. 

Second, there is indeed no inherent reason to make the consuming industries pay any penalty at all. When I was at the U.S. Business and Industry Council, which represented many steel-consuming companies and industry groups, we persuaded them that the best solution would be tariff protection for them as well. The tariff complaints coming from such sectors today reveals that the Trump administration hasn’t put this possibility on the table. That’s a major missed opportunity, and the President should realize that such offers not only can build support for the steel and aluminum tariffs. They can also expand the constituency for broader America First trade policies. (New Trump statements on possible auto tariffs make clear exactly the types of steps needed, although as is usually the case, they work best when applied across-the-board.)   

>Speaking of missed opportunities, here’s another (big) one – the handling of some allied countries’ indignation about being treated as threats to America’s national security because of their steel and/or aluminum shipments. In several major cases, these complaints could have been prevented had the administration recognized that Australia, Canada, and the United Kingdom are defined by American law as part of the nation’s defense “technology and industrial base.”

I’m not necessarily a supporter of this policy, but since it exists, these countries have an entirely legitimate point regarding their possible inclusion in the metals’ tariff regime. And the Trump administration should have explained to them that they were of course being exempted. Moreover, the Defense Department should have told the rest of the administration about the legal and legislative situation. Yet Pentagon chief James Mattis’ memo to his administration colleagues outlining his department’s position on the tariffs never mentioned it.

Not that these allied countries are entirely blameless for the row. They could have raised the issue when the prospect of sweeping U.S. tariffs was first raised. But all indications are that they preferred to grandstand.

>As should now be expected, the media coverage of the tariff controversy has often veered off into economics and policy La-La Land. Two of the funniest examples I’ve seen so far (and they’re nearly identical): criticizing the announced tariffs because they only boast the potential of bringing back high-value manufacturing to the United States instead of lots of industrial jobs.

Think I’m kidding? Here’s Washington Post correspondent David J. Lynch: “If tariffs prompt companies to move production back to the United States, they would likely opt for highly automated plants that require fewer workers. Trump’s tariffs ‘would bring back 21st-century factories where we lost 20th-century factories,” [economist Gordon] Hanson said this week at the National Association for Business Economics conference in Washington.”

Here’s no less than Nobel Prize-winning economist and New York Times columnist Paul M. Krugman: “[T]he tariffs now being proposed would boost capital-intensive industries that employ relatively few workers per dollar of sales; these tariffs would, if anything, further tilt the distribution of income against labor.”

What both authors are somehow missing is how manufacturing is valuable for much more than high wage employment. It’s long been the nation’s leader in productivity growth. It generates nearly 69 percent of private sector American spending on research and development. And don’t forget its high employment and output multipliers – which mean that each dollar of manufacturing output punches far above its weight in generation production and jobs elsewhere in the economy.

That last point is particularly relevant to Krugman’s claim about labor’s low share of national incomes. The manufacturing employment multiplier tells us that adding to industry in America – including capital-intensive industry – will promote employment in related sectors like logistics, plus revitalize the retail and other service sectors of the towns and cities and counties where the new factories are built. Those jobs may not pay as well as the manufacturing jobs lost. But they’re sure better than the economic death that often results when communities lose their factories.

(What’s Left of) Our Economy: The Real Promise – & Pitfalls – of Foxconn’s New US Manufacturing Plan

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assembly, Carrier, components, flat panel displays, Foxconn, incentives, innovation, Jobs, manufacturing, Paul Ryan, productivity, regulatory reform, Scott Walker, subsidies, tariffs, tax breaks, tax reform, Terry Gou, Trade, trade policy, Trump, Wisconsin, {What's Left of) Our Economy

Sorry for the recent absence – and during an incredibly newsworthy period!  There’s been lots of important economic data released recently, which I’ll be reporting on in upcoming days.  So what to focus on in this return offering?  One recent story that seems to reflect many of the biggest developments and trends of the Trump administration’s first six months is the announcement this past week that the Taiwanese electronics giant Foxconn will be spending $10 billion to build a new factory for flat panel displays in southeastern Wisconsin. 

Think this is a stretch?  Then consider this:

The announcement, which could become a big win for the American economy – and a big feather in the president’s cap –was completely upstaged by a series of White House personnel shakeups orchestrated by Mr. Trump himself.

Moreover, the Mainstream Media accounts invariably combined their longstanding hostility to the president with their instinctive rejection of the possibility that unconventional economic ideas and policies can have any merit. 

For instance, they uniformly focused on the job-creation effects of the new factory – which, as typical for capital-intensive products and industries, will be relatively modest – to portray the news as ruse by the president to convince voters that he was keeping his campaign promise to revive manufacturing employment.  Their main evidence?  The tax breaks and other subsidies the project would receive, which came to many thousands of dollars per position, which were easy to depict as a first class boondoggle.

Further, the media uniformly depicted employment as the only possible upside to strengthening the nation’s high value manufacturing.  Its major contributions to the economy’s productivity growth – which could use a major helping hand – and to its innovative capacities, were completely ignored. 

At the same time, the reporting overlooked crucial questions that need to be answered to assess whether the new Foxconn factory will live up to its promise.  Principally, will it be engaged in components production – where so much of manufacturing’s value-added comes from?  Or will it simply be assembling final products from imported components, as has been the case with other recent foreign electronics investments?  If the latter, the subsidies it’s garnered will be much more difficult to justify.  And in this vein, have either federal or Wisconsin authorities imposed any conditions that would encourage genuine manufacturing?   

Not that the Foxconn announcement completely vindicates globalization policy critics, either – or at least not those who, like me, have insisted that manufacturing revival that matters will require a thorough recasting of American trade policy.  I’ve been especially skeptical of the idea that jaw-boning a la Trump plus some subsidies could make a real difference – though I’ve insisted since Mr. Trump as president-elect intervened in the Carrier company’s decision to offshore Indiana manufacturing jobs that his use of the bully pulpit could greatly aid the welcome transformation of America’s approach to manufacturing that he seemed to have in mind.  And for the record, I’ve been skeptical that subsidies can be decisive, either – because America’s financial support for manufacturing was so unlikely even to approach the scale of, say, China’s. Finally, I’ve never thought that the kinds of regulatory reform efforts Mr. Trump has launched would matter much, either, given that so many potent American trade rivals are practically regulation-free.  

At this early stage, the jury is still out.  But since the Foxconn announcement has hardly been unique, and no significant changes have taken place in U.S. trade policy other than a withdrawal from the Trans-Pacific Partnership trade agreement, the president so far is doing a pretty good job of proving me wrong.

Nonetheless, I’m still confident that, sooner rather than later, the manufacturing needle won’t be moved without imposing trade curbs of some kind.  Although avowed fiscal conservatives like House Speaker Paul Ryan (of Wisconsin) and his state’s governor, Scott Walker, enthusiastically supported the Foxconn incentives package, their appetite for such measures – even when reduced taxes are involved — is likely to be limited for other parts of the country because of their budget-busting effects.  Indeed, it looks like Ryan may wind up accepting a smaller corporate tax cut in Congress’ tax reform package for precisely this reason.  Moreover, these breaks could easily be offset by similar moves by foreign governments – and added to existing predatory practices like currency manipulation and tariffs of their own.  And I remain convinced that a high-income country, first world country like the United States can never rely heavily on deregulation to compete better against very low-income, largely regulation-free third world countries like China or Mexico. Nor should it want to. But no initiatives could match the power of policies that would limit or close off access to the world’s greatest economic and commercial prize by far, the American market.

In fact, as Foxconn’s CEO has strongly suggested, the threat of U.S. tariffs helped persuade him to promise to manufacture much more in America.  And he’s hardly alone in the corporate world, as I’ve reported.  That’s why I’m somewhat worried about the administration’s reluctance actually to impose tariffs, as opposed to threatening them.  If Mr. Trump keeps hemming and hawing about steel tariffs, and if he keeps opposing ideas like the border adjustment tax, which has just been stripped from Congress’ tax reform package, America’s competitors could easily conclude that his trade policy is largely bluff, and that they can keep using Americans as customers and not workers after all.

Im-Politic: Fin de Trump? Again?

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2016 election, Donald Trump Jr., establishment, healthcare, Hillary Clinton, Im-Politic, Immigration, Jared Kushner, Mitch McConnell, Paul Manafort, Paul Ryan, Republicans, Russia, Russiagate, Trade, Trump, Vladimir Putin

The latest Trump-Russia revelations make me feel like the Bill Murray character in “Groundhog Day.” I’ve already written posts to the effect that “[Candidate] Trump could really be in trouble this time.” I’ve also already written posts to the effect that “[Candidate] Trump could really be in trouble and this time it could be different.” Like practically everyone else I read and communicate with, I’ve been wrong on these scores, but I’ll be plowing the same fields again – if only because the circumstances are so extraordinary, and especially because so much is still unknown.

First, my bottom lines: I remain skeptical that the emails Donald Trump, Jr. released yesterday (after he was told they’d be published) will result in the end of his father’s presidency in any direct sense (i.e., impeachment and removal, or resignation). I remain equally skeptical of meaningful (and I know that’s an important qualifier, as I’ll discuss below) Trump-ian collusion with Russia’s government (which includes lots of operatives without official positions) to undermine his chief presidential opponent Hillary Clinton’s campaign.

I am, however, more convinced than I had been that what is different about the newest disclosures is that Washington will remain preoccupied with “Russiagate” for most of the rest of the President’s (first?) term, that they’ve just about ruled out any meaningful policy accomplishments through 2020, and that one reason is that Mr. Trump will have bigger reasons than ever to toe a standard Republican establishment policy line that’s highly unpopular even with his own base, but that’s still gospel with a Washington wing of the party whose loyalty is vital to his survival.

Second, let’s knock down the main talking points offered by Mr. Trump’s aides and other supporters (full disclosure: I support much of his agenda, and most of his establishment-bashing). As should be obvious, the failure of the Russian lawyer actually to produce any damaging information on the Clinton campaign does not absolve the president’s son – or son-in-law cum adviser Jared Kushner, or then campaign manager Paul Manafort, of the charges that they tried to cooperate with foreign agents to affect an American political campaign (the heart of the politically salient collusion charge).

The email exchange showed that this information was the principal reason that all three figures attended the meeting. Their motives are completely unaffected by the false pretenses under which they acted.

Just as obvious, and just as bogus, is Trump, Jr.’s claim that he and his colleagues viewed an offer from Russia as nothing special because the Russia-gate charges had not proliferated. Manafort, for example, formally joined the Trump campaign manager on March 29. Certainly by May 2 – a month before Trump, Jr. first heard about the supposed Russian information – Manafort’s longstanding lobbying for pro-Russia politicians in Ukraine was making news. As a result, even if the president’s son was politically inexperienced enough not to recognize the potential dangers, Manafort himself, a veteran Washington operative, surely knew the score.

Even more important, the Russia business ties of Trump, Sr. himself were being scrutinized and fretted about at least as early as March 15.

Have any laws been broken? Beats me. That’s now officially the responsibility of Robert Mueller, te Justice Department’s Special Counsel, to determine. But much of this uncertainty centers on how much is known about this meeting, and how much is known about similar activities. Further, neither impeachment nor the future of the Trump presidency will necessarily hinge on such legal questions. A president, as I’ve noted previously, can be impeached for anything the House of Representatives believes satisfies the definition of “high crimes and misdemeanors” – which itself is a political, not a legal, concept. The Senate, moreover, can remove a president from office for equally political reasons.

So public opinion will be crucial. There are no signs yet that Russia-related charges have significantly damaged President Trump’s support either with the general public or among Republicans. But the more such Russia-related material keeps coming out, the likelier such erosion becomes.

Nor will the president’s political support depend completely, or even largely, on politicians’ often less than steely backbones. The new Trump, Jr. emails – and the continuing and utter failure of anyone in the Trump circle (including the president himself) to provide straight, durable answers to perfectly reasonable questions – understandably revive questions of how extensively individuals associated in any significant way with Mr. Trump or his campaign worked with the Russian government to sway election results.

Until yesterday, as I’ve written, I’ve felt confident that no important collusion evidence would emerge because none had yet been leaked – even though the matter had been probed for months by several official and many unofficial investigations, and even though bureaucrats at the highest levels have been positively eager to reveal incriminating Trump information even if national security could be undermined.

In addition, it’s never been clear to me why Russian interference with the election ever required cooperation from the Trump campaign – or any other American source. As long as Moscow was so motivated, its formidable hacking and disinformation capabilities were amply capable of producing the desired results on their own. Moreover, the U.S. intelligence community’s January report on the Russian interference campaign itself reported that Russian leader Vladimir Putin was wary of praising candidate Trump too enthusiastically precisely for fear of generating a backlash.

At the same time, even the canniest political leaders and other figures don’t always behave logically or sensibly. It’s also now clear at least that many in the Trump circle have been less than canny or, when it comes to explaining controversial events, even minimally competent. As a result, as stated above, there’s now indisputable evidence of receptivity to collusion by three extremely influential Trump aides (including two family members).

If the June Trump, Jr. meeting represents the extent of the collusion, there’s still an excellent chance that the president ultimately will survive the Russia mess. After all, what kind of (serious) collusion effort, once started, would feature no follow up? But because no one close to Mr. Trump now enjoys (or deserves) much credibility on these matters outside hardcore Trump-supporter circles, Democrats now have the pretext they need to force the administration to keep trying to prove a negative – a challenge no one should relish. Special Counsel Mueller has a comparable justification for prolonging his own investigation considerably.

Yet even before the possible crumbling of the president’s political support, for either legal or political reasons or some combination of the two, the Trump administration’s Russia-related problems could profoundly impact the nation’s policy agenda – and not in a good way if you’ve hoped Mr. Trump would be an agent of serious change. Here’s what I mean.

Recall that last year, Mr. Trump did not simply assume the leadership of the Republican party after winning its presidential primaries. He engineered a hostile takeover, supplanting a party mainstream that strongly opposed him on his two signature issues – trade and immigration policies. The shocking Trump fall victory, however, gave the incoming president crucial leverage in this relationship, and for a very powerful, concrete reason. The Republicans’ establishment leaders in Congress gave his campaign, and especially the inroads he made with new constituencies, abundant credit for saving the party’s control of both the House and Senate.

Once the Russia-gate charges and Team Trump’s failures to address them adequately began gaining critical mass, though, the dynamics of this relationship began changing dramatically. President Trump’s future became more dependent on the establishment GOP’s support. Therefore, he needed to warm to its establishment agenda – notably their budget and healthcare proposals – despite the poor poll numbers they’ve been drawing. Additionally, his ability to reach across the aisle on promising areas of bipartisan agreement, like infrastructure, turned into a function of the overall party’s flexibility – which seems pretty limited to date.

Since such vast new – and, due to the Trump circle’s constantly changing responses, legitimate – investigative frontiers have been opened up by the new emails, the Trump wagon now looks to be hitched to the Congressional Republican star more tightly than ever. That’s not to say that House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell will never stray from their party’s orthodoxy. McConnell, at least, has hinted that bipartisan compromise may be needed on healthcare. Moreover, the party establishment is by no means united on all major issues, either. Consequently, intra-party divisions may widen the scope for bipartisanship (as has generally been the case to avoid or mitigate various budget crises).

But the main point here is that at this point, these decisions are likeliest to be driven by the establishment, not the president. And the tragedy, at least for anyone rooting for the president or any of his agenda, is how many of the resulting White House political and policy wounds will have been entirely self-inflicted.

Im-Politic: The Polls Say “Let Trump Be [Campaign-Version] Trump”

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2016 election, ABC News, budget, conservatism, discretionary spending, entitlements, Freedom Caucus, healthcare, Im-Politic, Immigration, independents, NBC News, Paul Ryan, polls, poverty, Republicans, The Wall Street Journal, Trade, Trump, Washington Post

They’re only polls and we all should remember how badly most polls blew their calls in the last presidential election. But two new surveys from the Washington Post and ABC News on the one hand, and the Wall Street Journal and NBC News on the other, are signaling to me anyway that Donald Trump has made a major mistake so far in his young presidency in tilting so markedly toward the keepers of the orthodoxy (especially the most doctrinaire versions) in his own party. Instead, he should have been focusing all along on developing a promising new American political center of gravity that he started defining (in his own imitable way) during his campaign.

As widely observed during the 2016 elections, Mr. Trump was anything but a conventional conservative – at least as the term has been understood for the last quarter century. Yes, he made frequent nods toward cutting taxes and regulations, as well as to balancing budgets (objectives that of course aren’t always consistent). He also expressed some support for social conservative positions like further restricting abortion and appointing “strict constructionists” to the Supreme Court. But as also widely observed, if that mix of views was what voters in the Republican primaries and general elections really wanted, they would have voted for an orthodox conservative.

Instead, Mr. Trump trounced his opponents even though he at least as often promised to protect massive federal entitlement programs heavily relied on by the middle class and senior citizens; to guarantee adequate healthcare for non-seniors who can’t afford it; to preserve government support for Planned Parenthood’s provision of non-abortion-related women’s health services; to uphold the rights of gay, lesbian, and transgender Americans; and of course to ignore free market dictates when they seemed to undermine public safety and prosperity by fostering unrestricted trade and immigration.

Undoubtedly, much of candidate Trump’s appeal also sprang from simple, nonpartisan voter anger at the failures and self-serving priorities of the bipartisan national political establishment. But Mr. Trump did the best job of all last year’s presidential hopefuls of identifying the combination of specific grievances that created this anger: notably, over those jobs and incomes lost to Americans Last trade and immigration policies, over those related dangers posed by terrorism and leaky borders, and over the astronomical costs and risks of fighting seemingly futile foreign wars and defending free-riding allies.

The president’s Inaugural Address – which declared his intention to fix these problems with America- and Americans’- First policies – unabashedly proclaimed that President Trump would govern like candidate Trump.

Yet although the president has by and large kept his immigration promises, and approved some (limited) measures to combat foreign trade predation, his domestic policy proposals look like they’re right out of the Chamber of Commerce and Moral Majority playbooks. Nowhere has this development been more obvious than in his endorsement of House Speaker Paul Ryan’s healthcare plan, and in his release of a budget outline that, outside of defense spending, libertarians should be swooning over.

Late last month, I ventured that the president’s support for the “Ryan Care” proposal was a head fake: He had knowingly backed a measure so draconian that he knew it would fail, in order to establish some orthodox conservative street cred with Congressional Republicans and thus enlist their support for the pivot to greater moderation he had planned all along. Something like this scenario could still unfold; according to press reports, even the hard-core anti-government House Freedom Caucus members are growing more amenable to a compromise proposal that would preserve many of the more popular provisions of President Obama’s healthcare reforms.

But Mr. Trump’s continuing insistence on a federal spending blueprint that either eliminates or greatly slashes funding for medical and other scientific research, Chesapeake Bay cleanup, and food and heating aid for the poor, is not only plain bizarre, especially since the dollars involved are trivially small. It’s also politically inexplicable, because there’s absolutely no evidence that these are viewed as priority savings among any important Trump constituencies.

And that’s where the new polls come in. As per the headline results, Mr. Trump’s popularity at this point in his presidency is much lower than the ratings of most of his predecessors early in their first terms. In fairness, the Post-ABC survey also shows that the president would beat his chief 2016 rival, Hillary Clinton, in the popular vote if a new election was held – showing that he’s even more popular versus the Democratic nominee than on election day.

But the both polls showed the president’s support tightly concentrated among his own core voters and Republicans generally. Even accepting the claim that rapid partisanship by Democratic party leaders is proving effective in limiting Mr. Trump’s appeal to their rank and file, it’s still a sign of trouble for the president that his ratings among self-described political independents is markedly on the wane according to the Journal-NBC findings (falling to 30 percent) and low (38 percent) according to the Post-ABC survey.

One main reason: The Washington Republicans President Trump is apparently still courting are even less popular than he is. The Journal-NBC poll reports that many more Americans are dissatisfied with the Republican-led Congress nowadays than in February, and Ryan’s approval ratings are even lower. Moreover, the Republican-led Congress and the Speaker, in turn, are less popular than the president even among voters identifying as Republicans.

None of these results necessarily bodes ill for the Freedom Caucus. Its members don’t care for Ryan, either – allegedly for being too moderate. But many of the latest measures of Americans’ views of major policy issues do. For example, the Journal-NBC poll found that, since February, the share of respondents agreeing that “Government should do more to solve problems and help meet people’s needs” shot up to 57 percent. Even more independents (59 percent) endorsed this position. The share of total respondents believing that “Government is doing too many things better left to businesses and individuals plummeted to 39 percent.

More pointedly, the Post-ABC poll showed Americans opposing the Trump budget proposals by 50 percent to 37 percent overall, and independents disapproving by an even wider 52 percent to 35 percent margin.

The Journal-NBC survey also found record shares of Americans viewing “free trade” and “immigration” positively – at 57 percent and 60 percent, respectively. But the abstract nature of these questions could well have tilted these answers. One reason for supposing so: The Post-ABC poll reporting that, by a strong 73 percent to 22 percent, Americans favor “Trump pressuring companies to keep jobs in the United States.” Among independents, the results are an even better 75 percent to 19 percent.

So the recipe for Trump political success seems pretty clear: Dump the Freedom Caucus under the Trump Train on the budget and healthcare; preserve (and even boost to some extent) discretionary spending programs that strengthen the economy’s foundations and provide for the needy; keep the campaign promises on entitlements so highly prized by the middle class; and take bolder measures to Buy American and Hire American (as one new set of trade-related Trump jobs programs is called).

Keeping the focus on these priorities, along with a well thought out infrastructure program, should attract and keep enough backing among Republicans and independents to offset any losses in Freedom Caucus ranks, both in Congress and at the grassroots level (where they seem modest in number). Adding new policies to combat predatory foreign trade practices, moreover, should please organized labor enough to bring into the fold many union members and leaders plus the Congressional Democrats they strongly influence. An extra bonus – this program could well give President Trump the political leeway he needs to stay his course on immigration (which of course has seen a softening of his views on the so-called Dreamers).

Often in American history, calls to “Let [name your favorite politician] be [name that same politician]” have reflected core supporters’ naive beliefs that campaign promises can easily be turned into policy by the office-seekers they elect. But as is so often the case with the current president, Letting Trump be Trump, could confound the political conventional wisdom.

Im-Politic: Did Trump (and Trump-ism) Really Lose Big in the Healthcare Fight?

Tags

border adjustment tax, Congress, conservatives, Freedom Caucus, healthcare, Im-Politic, Immigration, infrastructure, Obama, Obamacare, Paul Ryan, Peggy Noonan, Republicans, RyanCare, tax reform, Tea Party, The Wall Street Journal, Trade, Trump

The list of realities, considerations, factors – call them what you will – that President Trump either forgot or overlooked as he pushed for House passage of the Republican healthcare bill is long, impressive, and pretty obvious according to the Washington, D.C. conventional political wisdom. On the off chance you haven’t heard it or read it, it includes the difference between cutting deals among real estate tycoons and negotiating with ideological politicians; his own voters’ tendency to rely heavily on the kind of government healthcare aid that the GOP legislation either eliminated or sharply curbed; the powerful vested stake developed after years or working with it in the current healthcare system – however troubled it might be – by major participants in the system; and the dangers to Mr. Trump’s own credibility and political power of choosing to tackle first a highly contentious subject (like healthcare) instead of a priority that’s reasonably uncontroversial (like infrastructure spending).

All those points seem valid to me, but I would add two more that seem at least equally important. Then I’ll present an interpretation of the healthcare story that hasn’t appeared anywhere else yet but that shouldn’t be overlooked – if only because it ties the otherwise puzzling story together in ways that are admittedly byzantine, but that make eminent sense in a Machiavellian (and therefore quintessentially political) way. In fact, this analysis dovetails exceptionally well with the president’s clear (to me, certainly) determination to remake American politics by rejecting the doctrinaire conservatism embodied by the Republican party for decades, and thereby increasing its appeal to independents and moderates.

The first such consideration that should be added to the overlooked list: how much more difficult it is both politically and substantively to take away government assistance used by economically stressed Americans (like those who backed Trump in droves) than it is to enable them to thrive without the assistance via other major planks of the Trump platform – chiefly immigration and trade policy overhaul.

One of the secrets of Trump’s success, after all, was his recognition that vast numbers of working and middle class Americans no longer buy the mainstream Republican argument that they could greatly increase their economic self-reliance through the wealth that would trickle down to them through shrinking taxes and government. He understood that this promise would always ring false as long as so many good jobs and so much income were being sent to foreigners through offshoring-friendly trade policies and mass immigration.

So it’s easy to understand why the Republican healthcare legislation registered so little support from even Republican voters – no doubt including many Trump backers. He seemed to be putting the cart before the horse not when it came to the kinds of government programs touted by liberals that Trump-ites viewed as bupkis, but with a program that had become central to their lives. (For a terrific analysis of Main Street views of healthcare at the usually ignored gut level, see this column by The Wall Street Journal‘s Peggy Noonan.)

The second neglected consideration flows directly from the first: President Trump’s election shows that the Republican party has moved significantly in his more populist and particularly less ideological direction, if not at the interlocking think tank/donors/Congressional level, at the far more important voter level. As a result, there was no apparent reason for Mr. Trump to defer to the more ideological Congressional Republicans on the healthcare front.

More specifically, even though the national party’s leadership did indeed treat Obamacare repeal and replacement as a defining principle and promise to its grassroots, and even though candidate Trump expressed strong opposition to his predecessors’ signature achievement, healthcare was never the defining principle of the maverick movement he led. That’s why he so frequently spoke of achieving healthcare goals that have been so widely rejected in Republican and conservative and leadership circles, like ensuring universal coverage.

So why did the president lead off his legislative agenda with orthodox Republican-style healthcare reform? Here’s where the story gets Machiavellian to me – but in ways that should be entirely plausible to anyone familiar with how successful political strategists think. Further, it’s a narrative that fully takes into account the hyper-partisan nature of Washington and legislative politics with which Mr. Trump needs to deal. And it goes like this.

The president recognizes that even though he’s remade much of the Republican base in his own image on the issues level, he also must realize that the Washington Republicans – which include the party’s mainstream conservative Congressional leaders and its more ideological Tea Party wing – remain hostile on the highest profile matters on his own agenda. I imagine he also recognizes that they might be powerful enough to undermine his initiatives on trade, immigration, and/or infrastructure – especially if Democratic leaders remain in their adamant “resistance” mode.

For even if Democrats are ultimately winnable on trade and infrastructure, they have no interest even in these areas in giving the president the kind of quick victory that would greatly strengthen the odds of turning his first term of office into a success that would boost the odds of his reelection. They have even less interest in helping Mr. Trump further strengthen his appeal to many of big Democratic constituencies.

So the Washington Republicans needed to be at least neutralized – and sooner rather than later. And appearing to fight the good fight for their healthcare reform proposal was an ideal way to demonstrate his loyalty to their objectives and strengthen his case for demanding concessions from them in return in areas he valued much more highly. This calculation looks especially shrewd since the Republican bill was so draconian that even had it squeezed through the House, the Senate was bound to prevent its reaching his desk in anything like its current form.

As a result, now that the “RyanCare” legislation is dead, Mr. Trump can say to both the House Republican leaders and even to the hard-line Freedom Caucus something to the effect, “We tried it your way, I carried lots of your water, and I paid a noticeable price. Now we drop the healthcare effort, pivot to my priorities, and I expect your votes, even if you won’t pull front-line duty. And when we do address healthcare as Obamacare’s failures multiply, you’re going to do right by your own constituents and drop the free market extremism. P.S. Anyone remaining obstructionist comes into my social media cross-hairs with your reelection bids coming up.”

I have no inside information here, and my reasoning could certainly be too clever by half. Moreover, one of the most important lessons I’ve learned in my professional life is that just because an analysis seems logical or commonsensical, doesn’t mean that it’s true. But even though it’s only about a day since the healthcare bill was pulled from a scheduled floor vote for the second and final time, I derive some satisfaction in seeing the president is making nice with both House Speaker Paul Ryan and the Freedom Caucus members, and making clear that it’s tax reform time (which could bring a tariff-like border adjustment tax). Which could mean that Donald Trump’s presidency is highly conventional in at least one respect – temptations to dismiss it as a failure should be strongly resisted.  

(What’s Left of) Our Economy: The Multinationals Debunk a Major Free Trade Claim

Tags

2016 election, BAT, border adjustment tax, Congress, exports, free trade, GE, General Electric, House of Representatives, imports, Jeffrey Immelt, Kevin Brady, multinational companies, Paul Ryan, Republicans, retailers, tariffs, tax reform, Trade, Trump, value-added tax, VAT, {What's Left of) Our Economy

President Trump has been slow so far to launch the major trade policy transformation he promised during his campaign – in part because most of his trade policy team has taken so long to be confirmed by Congress, and in part because (especially in the case of Japan), he seems so far to be listening too closely to national security advisers who clearly prioritize alliance relationships over economics. But his election has already triggered major upheaval in America’s trade politics, and in the process fatally weakened one of the leading arguments advanced against curbing imports.

The trade politics earthquake has three major related sources. First, Republican Congressional leaders like House Speaker Paul Ryan and especially Ways and Means Committee Chair Kevin Brady, who have long strongly supported jobs-killing trade deals and related policies, have become major champions of a measure that would create one of the biggest trade barriers in American history – the so-called Border Adjustment Tax (BAT). Their proposal, which is part of the House Republicans’ larger tax reform package, would offset the discriminatory effects of foreign value-added taxes (VATs) by imposing levies on imports – as well as by supporting exports by exempting them from taxes.

Their change of heart in turn surely stems at least partly from the second big change in trade politics – a major shift among Republican voters on trade policy. As I’ve reported previously, whereas for decades, they tended to support freer trade, and the policies that have ostensibly sought to further liberalize global commerce, more recent polls show that the GOP base has turned against the idea. (Democrats, however, have become much more positive on trade’s impact on the American economy.) And the evidence goes far beyond polls – as made clear by Mr. Trump’s capture of the GOP presidential nomination over numerous free-trading rivals and his November triumph.

But it’s the final trade politics shift that has really floored me. Many of the big multinational manufacturing companies that have also strongly pushed for those same deficit-boosting trade deals – because they made it easier to source products from abroad and supply the U.S. market from foreign production sites – support the BAT, too. In fact, they’ve created a lobbying coalition to turn the idea into law.

And it’s their BAT stance that has weakened a longstanding pillar of free-trade thinking: the insistence that any sweeping tariff measures (like the BAT) would actually backfire on domestic U.S. manufacturers and other producers by raising the cost of imported inputs they use – like parts, components, and materials. Here’s the latest example of this claim – from a former bigwig at the World Bank and International Monetary Fund, no less.

I’ve presented the evidence revealing that this argument completely ignores the immense existing scale of American inputs manufacturing – and the huge markets, new growth, and jobs gains that would result by replacing foreign-made goods with these U.S.-made products. But at least as important is how the multinational practitioners themselves are refuting the theorists by endorsing the BAT.

Incidentally, the multinationals’ BAT position could indicate that I’ve been wrong about their trade performance and about the principal rationale for their backing of offshoring-friendly trade agreements – data I’ve seen showing that they import much more than they export. For if they were indeed big contributors to America’s trade deficits (that is, big net importers), then you’d think they’d be much more concerned about potentially more expensive imports than about any export boost possible from the BAT. The companies themselves, as I’ve repeatedly stated, know the definitive answer – at least regarding their own trade performance. But as long as they’re not required to disclose their import and export figures – as opposed to releasing cherry-picked numbers – we can’t be sure.

But this business enthusiasm for the BAT could also stem from an “if you can’t beat ’em, join ’em” mentality – as General Electric chief Jeffrey Immelt has signaled. In other words, perhaps they’ve decided that more localized production everywhere is an irresistible wave of the future – at least for the time being. Alternatively, the multinationals could believe that they themselves could enter the aforementioned new BAT-created domestic input manufacturing markets. If these businesses believe that the rest of that tax reform package along with the regulatory relief President Trump has promised will lower domestic American business costs further, domestic sourcing could become all the more attractive. Another possibility – precisely because America’s and their own export performance has been so relatively weak, they view foreign markets as an especially exciting growth opportunity that the BAT tax breaks could open wide. And the likeliest possibility? The answer for most of these companies is a mix of some or all of the above.

What is certain, however, is that we’re now hearing, “No thanks” from the companies that economists keep telling us are among the biggest beneficiaries of cheap imports furnished by wide open trade policies. Of course, the retailers – which relay so heavily for their profits on cheap consumer goods imports – are campaigning just as hard against the BAT. The plan’s verdict will speak volumes about whether Americans, and their political system, assign more value to making stuff or to buying it.

Im-Politic: The Day After, Part I

Tags

2016 election, Bernie Sanders, Cheap Labor Lobby, conservatism, Democrats, Donald Trump, Hillary Clinton, Im-Politic, Immigration, Jeb Bush, Mainstream Media, Marco Rubio, Obama, offshoring lobby, Open Borders, Paul Ryan, Populism, Republicans, Ross Perot, Ted Cruz, Trade

How did I go wrong on analyzing President-elect Donald Trump’s rise during this epochal presidential campaign? Let me count the ways.

My first post on this populist phenom expressed full confidence that he would never win the Republican presidential nomination – or even “come close.” Although I didn’t explicitly say it, I viewed the idea that he could win the White House as positively ludicrous.

After several of his insult barrages and other verbal bombshells, I was all but certain that his campaign was finished.

I had no doubt that, as with third party presidential candidate and fellow tycoon Ross Perot in 1992, his unwillingness to take advice – especially of the critical kind – would cripple his candidacy. Similarly, I believed that he would run his presidential operation the same way that many successful business leaders engage in politics – incompetently.

So I guess I’m qualified to be a Mainstream Media pundit! But seriously, since I got at least some things right – like translating Trump-ish into language that the chattering class should have been able to grasp – I’m not totally sheepish about serving up a first batch of thoughts about what all Americans either are chewing over or should be in the weeks ahead.

>For all the teeth-gnashing about the ugliness of the presidential campaign, and for all the responsibility for it that Trump deserves, imagine what the race for the White House would have been like without him. The Republicans would have nominated either a tool of the Cheap Labor and Offshoring Lobbies like former Florida Governor Jeb Bush or Florida Senator Marco Rubio, or a social conservative extremist like Texas Senator Ted Cruz. And none of them would have felt major pressure to pay attention to the Republican base’s anger about mass immigration, job- and growth-killing trade deals, or the income stagnation they fostered.

On the Democratic side, this kind of conventional Republican nominee may well have enabled Hillary Clinton to win that party’s crown without many nods to the populist positions taken by her chief rival, Vermont Senator Bernie Sanders – including on trade policy, along with Wall Street reform.

What a clueless – and maybe dangerously clueless – campaign that would have been! In particular, with no political safety valve, the continuing buildup of working- and middle-class rage that both major-party standard-bearers would have kept blithely ignoring could have exploded much more powerfully.

>The Trump victory could be a milestone in not only American politics, but policy. Yet the potential may never become performance unless this most successful outsider in U.S. history meets a staffing challenge that has hung over his campaign since his strength starting being apparent. Specifically, where is he going to find the populist policy specialists and academics and business types and politicians to fill the hundreds of key cabinet and sub-cabinet posts where presidential ambitions can just as easily die a lingering death as produce real, on-the-ground change?

The institutions needed to nurture and train such cadres simply haven’t existed. Or they’ve been way too small (i.e., modestly funded) to produce the needed numbers and possibly the needed quality. After his first White House victory, President Obama dismayed many of his followers by appointing to key economic positions in particular the kinds of Wall Street-friendly Clintonians that he had raked over the coals during that campaign (including Hillary Clinton, his rival for the Democratic nomination that year). His response? As I recall at the time (and I’m still looking for a link), something to the effect “What choice do I have?”

Although Mr. Obama never intended to bring the substantive break with the past that his successor has vowed, Mr. Trump could find himself in the same position, and his administration could drift steadily, and even imperceptibly towards a more conventional, and indeed donor-class-friendly, form of conservatism.

>Finally, for today, the Trump triumph places the Republican party in its current form in just as much jeopardy as a narrow Trump loss.

Had Trump lost in a landslide, the GOP’s future would have been easy to predict: The Never-Trumpian Washington establishment would have loudly crowed, “I told you so,” and advanced an overpowering rationale for returning to its low-tax, small-government, free-trading, open-borders, global interventionist orthodoxy of recent decades.

But last night’s results could be the death knell of establishment Republicanism – at least as a viable political force. It’s entirely possible that this establishment’s corporate and similar funders could decide for the time being to keep afloat the think tanks, media outlets, lobbying shops, and political consultancies comprising the GOP/conservative establishment. Indeed, since Trump could flop disastrously, preserving this infrastructure in preparation for 2020 makes perfect sense.

But for the foreseeable future, this is Donald Trump’s Republican party (whether he has to staff his administration with lots of standard-issue Republicans or not). House Speaker Paul Ryan, who strongly opposes his own party’s president-elect on issues ranging from trade and immigration to entitlement reform to foreign policy, can talk all he wants about reestablishing party unity. But the key question surrounding such calls is always “Unity on whose terms?” Until Mr. Trump fails a major test of leadership (or even two or three), or until events beyond his control render him ineffective (like a weakening economy) he’ll be calling the shots.  

And however lavishly financed the party’s establishment may remain, this election has made painfully obvious that its grassroots are shrunken and browned out. Since one of the prime takeaways of this election cycle is that voters ultimately count even more than money, it will become increasingly difficult even for the donors to treat the Washington Republicans as a true national political movement, as opposed to a self-appointed clique of supposed leaders with embarrassingly few followers.

So there’s of course a chance that the Ryan wing (emboldened by some truly desperate plutocrats) might at some point bolt and try to reclaim the Republican brand as its own or launch a third party. But these well-heeled dissidents will face the strongest of tides with the weakest of paddles – the more so given Ryan’s acknowledgment that Trump’s unexpectedly strong showing helped the GOP retain both houses of Congress. 

Tomorrow I’ll be offering some further initial thoughts. Until then, like so many others, I’ll go back to catching my breath!

Our So-Called Foreign Policy: Why Opposition to the September 11 Law is Completely Stupid

Tags

Bob Corker, energy, foreign policy establishment, international law, lobbying, Middle East, Mitch McConnell, Obama, oil, Our So-Called Foreign Policy, Paul Ryan, Saudi Arabia, September 11, September 11 bill, sovereign immunity, terrorism

Thanks to foreign policy establishmentarians on the Left and Right, ranging from President Obama to Congress’ Republican leaders, we’ve just gotten a moment when the folks we’ve entrusted to chart our country’s course in world affairs have not only gotten something massively wrong, but literally stopped thinking.

I’m talking about reactions to Congress’ override of the president’s veto of the September 11 bill, which will now enable the families of American victims of terrorism on U.S. soil to seek legal damages from foreign governments found to be responsible. Sure, all or most of the misgivings being expressed by figures like House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, and Senate Foreign Relations Committee Chair Bob Corker could be resulting from lavish campaign contributions they’ve received from Washington’s big Saudi Arabia lobby. (I have no concrete evidence of this, but the Saudis have always been major Beltway players, and they’re one of the governments sure to be sued under the new law.)

But what’s most revealing about the concerns and outright fears being expressed is their content. For the counter-arguments now being made – and made all along by the Obama administration – reflect jaw-dropping misunderstandings about geopolitics and the role of international law in international relations that have practically defined mainstream foreign policy thinking across the American political spectrum.

Two in particular stand out, and they’re related to the principle objection to the September 11 law: If American citizens can now bring court cases against foreign governments, in violation of the longstanding international legal principle of sovereign immunity, then foreign citizens will feel free to file all sorts of lawsuits against the U.S. government and its representatives at home and abroad.

First, though, does anyone really think that it’s international law that keeps American diplomats and official Washington safe from the reach of foreign legal systems (and the flagrant pseudo-legal systems found in so many countries – including Saudi Arabia)? If they do, they shouldn’t be allowed anywhere near the American foreign policy decision-making process.

What has really ensured these results is the shield that has always been America’s most reliable asset: American power in all its forms. This should be obvious when it comes to countries considered allies – since the United States is so inherently secure and prosperous that it needs them militarily and geopolitically much less than they need America. Indeed, if any allies are now considering or have ever even contemplated legally harassing American diplomats for any reason, that would count as a disgraceful failure of U.S. policymaking.

And P.S., that goes double for Saudi Arabia. In case the foreign policy establishment hasn’t noticed, even leaving aside the abundant support for Al Qaeda and other Islamic extremists influential Saudis have provided for decades, the days when the United States and the rest of the world needed to tremble at the thought that Riyadh might push through a big oil price hike or even shut off the spigots ended long ago. Even better, that’s mainly because of the energy production revolution in the United States.

So although Saudi retaliation for the September 11 bill might unnerve its hired guns in Washington, the United States is fully capable of telling its government, “Enjoy fighting Iran by yourself.”

Second, fears about a new global wave of anti-American lawsuits stupidly assume that most and even all foreign governments will react in the same way. The worrywarts don’t seem to understand that the September 11 bill only permits suits against foreign governments accused of supporting terrorism in the United States. Is this new law really likely to worry the British? Or the Japanese? Or even the Chinese?

The September 11 bill fear-mongers aren’t normally the types to softpedal the differences between America’s friends and foes, or between democracies and dictatorships, or even between ordinary foreign governments of whatever stripe and rogue states. So what’s going on? Simply put, their analytical compasses and even bedrock common sense apparently have been thrown off by the assumption – so crucial to modern international law – that all sovereign governments are created equal and much be so treated legally. Therefore, September 11 bill opponents seem convinced that all sovereign governments can be counted on to act in the same way as well.

Dickens famously characterized the law as “an ass” when, as is the case from time to time, its precepts produce head-scratching decisions. But in countries with legal systems worthy of the name, those bloopers are rightly accepted as one price of seeking and enforcing equitable societies and the common standards of behavior they require.

But the international sphere lacks the ingredients needed for effective legal systems – i.e., consensus about those standards. And no such meeting of an adequate number international minds is remotely foreseeable. Therefore, the ludicrous controversy about the September 11 bill should be reminding us that in the foreign policy sphere, the law is especially asinine – and should have no meaningful influence on American decisions and actions.

(What’s Left of) Our Economy: Big Business Still Favors A TPP Fast Track – for Everyone Else

Tags

Business Roundtable, Congress, fast track, Michael Froman, National Foreign Trade Council, Obama, offshoring lobby, Orrin Hatch, Paul Ryan, Ted Cruz, TPA, TPP. Trans-Pacific Partnership, Trade, Trade Promotion Authority, {What's Left of) Our Economy

A funny thing has happened to the Offshoring Lobby groups that pushed so hard (and successfully) for Congress to give President Obama fast track trade negotiating authority. Now that they’ve seen the text of the Trans-Pacific Partnership (TPP) trade deal whose passage they’ve also urged, several have decided they don’t like the core provision of fast track trade negotiating authority.

Central to the case for fast track – now officially known as Trade Promotion Authority (TPA) – is that preventing Congress from monkeying around with the final text of trade agreements negotiated by presidents and their aides is vital to persuading America’s interlocutors to negotiate seriously. If American lawmakers could amend the deal at will, why would foreign leaders put forward their best offers, especially if they might anger powerful domestic constituencies?

That’s what U.S. Trade Representative Michael Froman has made unmistakably clear. In a late-2014 article in Foreign Affairs, Mr. Obama’s chief trade diplomat wrote, “By ensuring that Congress will consider trade agreements as they have been negotiated by the executive branch, TPA gives U.S. trading partners the necessary confidence to put their best and final offers on the table.”

The Republican leaders who have supported the president’s trade agenda agreed as well. According to Senate Finance Committee Chair Orrin Hatch of Utah, TPA “allows for trade deals to be submitted to Congress for an up-or-down vote, an incentive for negotiating nations to put their best offer forward for any deal.” And before he was elected Speaker and chaired the House Ways and Means Committee, Wisconsin’s Paul Ryan contended (in an article co-authored with Texas Republican Senator and current presidential candidate Ted Cruz, “By establishing TPA, Congress will send a signal to the world. America’s trading partners will know that the U.S. is trustworthy and then put their best offers on the table. America’s rivals will know that the U.S. is serious and won’t abandon the field.”

When Congress was considering fast track, moreover, leading business groups strongly echoed this line. As specified in a statement from the Trade Benefits America coalition that spearheaded the pro-fast track lobbying campaign, fast track historically ”has provided our trade negotiating partners with a degree of comfort that the United States is committed to the international trade negotiating process and the trade agreements we negotiate.”

One of the coalition’s major members, the National Foreign Trade Council (NFTC), was even more explicit: “Without U.S. trade negotiating authority, other countries will be unwilling to negotiate with the United States for fear that U.S. commitments and concessions would not hold weight.  In particular, they would be unwilling to put important politically sensitive concessions on the table.”

Last week, however, some of these organizations were changing their tune. In a statement calling for Congress to pass the TPP, the Business Roundtable declared that it also wanted to administration “to quickly address the remaining issues that impact certain business sectors in order to ensure the broadest possible benefits to all sectors of U.S. business, which will enable the broadest support possible for the TPP.” Huh? It’s true that Congress can attempt to clear up purported ambiguities in the text when it writes implementing legislation, but as for changing the text itself? Sorry, but that’s a no-no under TPA. Unless the Roundtable wants to reopen the entire negotiation?

Similarly, the NFTC reported that it is “encouraged by discussions that are underway between Congress and the Administration to address provisions in the agreement in order to further improve trade and investment liberalization, and strengthen the system of international trade and investment disciplines and procedures, including dispute settlement, for all of American business. Early resolution of areas for improvement identified by the business community will speed approval by Congress in 2016.”

With due respect, what on earth are they talking about other than the aforementioned clarifications and interpretations that unfortunately are entirely unilateral, and have no standing under the new TPP regime?

It seems that when the Offshoring Lobby touted the importance of banning Congressional amendments to TPP, it meant all amendments except its own. You can’t blame its organizations for seeking such blatant favoritism; it’s their job. Now we’ll see if Congress believes that enforcing the principle of equality under the law is its job.