The Good, the Bad and the Ugly

For the past eight years, the Federal Reserve Board has been the primary force behind the U.S. economy. That hasn’t worked out so well.

Now President Trump is in charge of the U.S. and its economy.

Whether that will revive the economy and make America great again remains to be seen. While the Trump presidency is still brand new, we’ve already seen more action take place that will affect the economy than we saw in the past eight years.trump_cowboy_2509705

Some of what’s taking place appears to be good. Some of it appears to be bad. And some of it appears to be ugly.

The good. Already, President Trump has signed a slew of executive orders. While we’re no fan of executive orders, every president has used them to a degree–and it was one way to make a quick impact, even before his cabinet has been confirmed.

Regulation, as we have frequently noted, has paralyzed the economy, having its greatest impact on small businesses. That President Trump is serious about deregulation is clear by what he’s done to date.

One of his executive orders requires that whenever a new regulation is approved, it must be offset by “the elimination of existing costs associated with at least two prior regulations.” The order adds that the “total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law.”

His chief of staff, Reince Priebus, also signed a “regulatory freeze” that created an immediate halt to new regulations; it will expire after his nominees to key agencies are confirmed by the U.S. Senate.

Another executive order is designed to minimize the economic burden of the Patient Protection and Affordable Care Act, pending its repeal. The order suggests that federal agencies give states, insurance companies and consumers maximum flexibility in complying with the law.

He also ordered a review of the Dodd-Frank Wall Street and Consumer Protection Act and suspended the Department of Labor’s fiduciary rule, which was scheduled to go into effect this spring.

President Trump also attempted to move the Keystone and Dakota Access pipelines forward with executive orders, although requiring that they be built with American steel could be infeasible in addition to violating international trade law.

President Trump also signed an ethics bill requiring a five-year ban on lobbying after executive branch employees leave their job.

Given all of the activity in the Oval Office, the Federal Reserve Board no longer plays a central role in managing the economy. The Fed met last week and decided not to raise interest rates. It issued its usual policy statement, in which the most significant change was a line saying, “Measures of consumer and business sentiment have improved of late.”

As if we didn’t know that already. For once, the Fed’s policy statement received scant media attention, even though it was the first board meeting under the Trump administration.

The bad. President Trump apparently meant what he said when he was running for office. He deserves credit for keeping his campaign promises, but in some cases, we wish he hadn’t.

He’s already taken steps toward building a wall between the U.S. and Mexico, to be paid for with tariffs on Mexican goods. With an executive order, he’s imposed a 90-day ban on immigrants from seven predominantly Muslim countries, which was not well thought out. And he’s pulled out of the Trans-Pacific Partnership (TTP).

Why pick on Mexico? We’d prefer a strong stand against Iran or North Korea. Mexico is an important trading partner and, while it is a source of drugs and illegal immigrants, the number of illegal immigrants coming from Mexico declined from 1.6 million in 2000 to just 229,000 in 2014 (i.e., just 15% as many as we had when the millennium began).

And, with working conditions improving in Mexico, 1 million illegal immigrants willingly returned to Mexico between 2009 and 2014, which means more Mexicans have been leaving the U.S. than have been coming here.

President Trump has suggested that he will pay for the wall by imposing a 20% tariff on goods imported from Mexico. That will hurt the Mexican economy, which, ironically, could drive more Mexicans to immigrate illegally to the U.S. The net effect of the wall, in other words, could be that the U.S. has more illegal immigrants from Mexico than before the wall was built.

The temporary ban of a large population of Muslim immigrants showed that President Trump is serious about protecting U.S. citizens from terrorism, but the ban was ill conceived and potentially illegal.

The affected countries–Iran, Iraq, Libya, Sudan, Somalia, Syria and Yemen–have produced some nasty characters we’d feel safer keeping out of the U.S., but there is no foolproof method for separating the good from the bad.

The executive order failed to anticipate potential problems. Initially, for example, the policy didn’t take into account people who were in the U.S. on green cards. President Trump also continued the unfair practice of his predecessor by failing to make allowances for those living in hostile countries who have helped the U.S. by providing intelligence and other support. Their lives remain in danger and it sends the message that those who help the U.S. will not receive help in return.

As for the TTP, opposition was already a given, since Democratic rival Hillary Clinton had also spoken out against it. But free trade benefits all parties–and protectionism hurts all parties. When America imposes tariffs or insists that American steel be used in oil pipelines other countries will retaliate and do the same.

The resulting trade wars will cost jobs. If the dollar continues to strengthen and other countries place tariffs on American goods, the U.S. economy will suffer.

The ugly. The United States is no longer united. While President Trump won the election, many are still refusing to accept his victory.

Democrats and Republicans used to work together to do what’s best for the country. Today, many in the Democratic Party are channeling all of their efforts into ensuring the failure of the Trump presidency.

As one example consider the nomination of Neil Gorsuch to the U.S. Supreme Court. By virtually all accounts, Gorsuch is an ideal candidate. Yet Democrats are already talking about a filibuster during the confirmation process.

Republicans did not attack the Supreme Court nominees of President Obama or President Clinton. Obama nominees Sonia Sotomayor and Elena Kagan were confirmed by votes of 68-31 and 63-37, respectively. Clinton nominees Ruth Bader Ginsburg and Stephen Breyer were confirmed by votes of 96-3 and 87-9.

Millions nationally protested after President Trump was elected based on electoral votes, while losing the popular vote. They were back protesting after President Trump signed his executive order limiting immigration from Muslim countries.

Media have fanned the progressive flames. Google “Trump fascist” and you’ll get 12.7 million hits. The Washington Post in particular has argued that theme several times. And if you define “fascist” as “anyone who disagrees with me,” the Post is correct.

In reality, if President Trump were a fascist, he would be adding more government control with new regulations like his predecessor, rather than deregulating.

In an apparent attempt to fight fascism with fascism, Comedienne Sarah Silverman called for a military coup to overthrow President Trump. Believe it or not, she wasn’t trying to be funny.

Google “Trump Nazi” and you’ll get 42.1 million hits (and counting). And that’s after just a couple of weeks in office. In spite of George W. Bush’s eight years as president, “Bush Nazi” has a modest 13.9 million hits–and some are attributable to George H.W. Bush.

This tasteless name-calling has been taking plan on the left and the right. Google “Obama Nazi” and you’ll get 33.1 million hits.

For those who fear fascism, it’s time to recognize that the best antidote is democracy. Democracy requires that parties work together for the common good. Trying to impose your will on the country after losing an election is closer to fascism than anything that President Trump has done.

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