Cromwell

At least environmentalists can be cheered;  Trump clearly believes in recycling his garbage.  In this case, it was his “Midnight in America” convention speech.

The Inaugural Address was terrible–even worse than I would have predicted.  He showed no imagination in falling back on his campaign themes.  His portrayal of a rotting American society is at complete variance with the facts.  Instead of attempting to uplift and unite, he flipped the bird to the rest of the world.  His weird neo-mercantilist ideas were on full display.  And so on.

In response, my wife and I have decided to engage in the most meaningful and entertaining form of protest available.  We’re going to see “La La Land.”

The 45th President Trump

Thinks following rules is for chumps.

Our man of the hour

Just worships raw power.

If you don’t like it, go take a jump.

             It’s The End Of The World As We Know It

That’s great!  It starts with an earthquake.

Building walls and guys with balls.

The man is not afraid.

 

Eye of a hurricane; change is coming soon.

Waiting for the axe to fall; it’s just impending doom.

Muzzle wuzzle media, so we can’t hear the news.

Tax and hacks and silence as the crooks are on the loose.

Flames and planes and gold and mold; it’s getting pretty dark.

Can you see the future now?  The view is pretty stark.

The battle’s finally over, but the war has just begun.

Don’t you think the next four years are going to be fun?

 

It’s the end of the world as we know it.

It’s the end of the world as we know it.

It’s the end of the world as we know it.

We’re out of time.

 

Parody of “It’s The End Of The World As We Know It (And I Feel Fine) by R.E.M.

Life in the time of Trump

The dreaded day is here

Catastrophe

For you and me

A nation full of fear

We’ll see the world in different ways

As friends and foes change sides

America the beautiful

Where dreams come home to die

The story here is complicated, so I will break it into parts:

1.  Afghanistan:  Obama portrayed the Afghan War as the “good war” during the 2008 campaign, partly because he believed it, but mostly out of political opportunism.  Once in office, he found himself unable either to make the Afghan government work or to solve the conundrum of Pakistani double-dealing.  He tried to force the Afghans to address their problems by withdrawing, but the Taliban only gained strength, and the withdrawal had to be reversed in part. Today, Afghanistan is a quagmire, with no end in sight, just as it would have been if anyone else had been President.

2.  Iraq:  Obama was unable to persuade the Iraqi government to permit our troops to stay under acceptable terms, so he made lemonade out of lemons and completely withdrew.  The Iraqi government, to no one’s surprise, proved to be sectarian, corrupt, and inept;  anyone who thinks that the continuing presence of American troops would have changed things is kidding himself.  The US initially underestimated the strength of IS, but used the ensuing crisis to its advantage;  a new and more friendly government with more willingness to fight was created. By the end of Obama’s term, IS was on the verge of collapse in Iraq, but none of the underlying political problems had been solved, and more troubles with the Sunnis and Kurds loomed ahead.

3.  Libya:  Obama was pulled into Libya against his wishes by more enthusiastic European governments.  The war was won at very little cost, but the country collapsed into warlordism in the absence of an occupying force on the ground.  IS intervened, but was crushed.  Would you rather live with anarchy or tyranny? Different people would have different answers.

4.  Syria:  Having possibly missed an opportunity early on to bring down the Assad regime, the Obama Administration took the (unspoken, but realistic) position that an acceptable negotiated solution could only come from a balance of power, and behaved accordingly. The Russians and Iranians upset these calculations by escalating the war beyond the administration’s willingness to fight.  Instability in Syria resulted in a refugee crisis that tore Europe apart, and contributed to terrorism at home, as well.  In light of the high price of passivity, would a more aggressive approach have worked better?  We’ll never know;  the only conceptual alternatives were the Libyan approach (limited intervention followed by anarchy) or Iraq (occupation), neither of which was likely to be welcomed by an American public that was sick of wars in the Middle East.

All in all, a mixed bag.

1.  Against the advice of his Cabinet and the will of the American people, Trump quickly enters into a deal with Putin wherein he gives the latter a free hand in the former USSR in exchange for assistance fighting terrorists and benevolent neutrality in disputes with China and Iran.  Trump becomes disillusioned with the deal when it becomes clear that Putin is far more interested in inhaling Ukraine than in helping him deal with his various international crises.  He subsequently pulls a 180 and tries to re-energize NATO.  The Europeans look on, bemused.
2. The outcome of the wars with North Korea and Iran was described in posts last week.
3. Trump engineers a confrontation with the Chinese over the trade deficit and the South China Sea within six months of taking office.  The world watches in horror as it appears that the two nuclear powers could engage in a shooting war.  The war is averted when Trump gives China a free hand in the South China Sea (including Taiwan) in exchange for managed trade–i.e., import and export quotas.
4. The GOP Congress passes a huge and regressive tax cut package.  Business responds to it by stockpiling even more cash and by buying back stock.  There is no resulting boom.
5. The administration, as a whole, looks corrupt and chaotic.  Cabinet members are replaced on a regular basis.
6. Trump withdraws from NAFTA with great fanfare.  Business objects loudly, and a deal is reached with the Mexican government with only cosmetic changes.
7. The combination of protectionist measures and the unnecessary tax cut causes the Fed to raise interest rates significantly.  The result is the “Funhouse Reagan” version of the Trump slump.
8.  After some domestic terrorist incidents, Trump demands new powers of surveillance from Congress, and gets them.  He ignores court decisions finding the new powers unconstitutional.
9. Trump engages in a war with the press, and refuses to speak to anyone except Fox News.  Leakers from his chaotic government are threatened with prosecution, and libel suits are filed, but the MSM continue to oppose him.
10.  There are no major changes to Medicare or Social Security.
11.  Trump gives his unqualified support to the police, and racial tensions increase dramatically.
12.  The US withdraws from the Paris Agreement.  The world reacts with scorn.

By 2020, the market is down, interest rates and unemployment are way up, and American prestige throughout the world has never been lower.  The US is viewed as a rogue and militaristic nation.  China, in spite of all of its weaknesses, is now looked to as a source of stability throughout the world.  Trump has thus made China great again.

Ross Douthat has a fairly measured column in today’s NYT about Obama’s legacy.  I would break it down into three parts:

1. On domestic issues, he is mildly complimentary.  I would agree, with more enthusiasm.
2. On foreign affairs, he gives Obama a lower grade.  That’s reasonable, although it cannot be proved that a more aggressive approach to Syria would have garnered a better result.  In any event, the case against passivity in Syria has to come from someone like John McCain, not Douthat, who didn’t even support our limited involvement in Libya, and never attempted to offer a plausible alternative.
3. While he admits that Obama is hardly the first “imperial” President, he nonetheless condemns him for that.  I have mixed feelings on this subject.  There is no doubt that Obama used his authority to the maximum extent possible, and sometimes pushed the envelope too far.  On the other hand, what were his other choices?  When he continued to try, after several failures, to negotiate in an even-handed way with a Republican Party whose only objective was to drive him out of office, he demoralized his supporters and drove his poll ratings down.  Was he supposed to then tell the American public that, under the Constitution, he was helpless to pursue his agenda, and just leave it at that?

The American public expects the President to be able to act.  Obama’s willingness to use his authority over GOP opposition was a response to that condition; it was not the product of some sort of messianic personality.  If he had simply shrugged his shoulders and told the voters that the Constitution prevented him from getting anything done on issues like climate change and immigration, he would have been rewarded for his high-minded rejection of Caesarism with electoral annihilation.  No politician in his position would have behaved differently.

People tend to forget this, but health care reform wasn’t just a shiny object on the Democrats’ wish list in 2009;  the health care system was creaking, and insurance premiums were soaring, at the time Obama took office.

Obamacare, of course, was based on Romneycare, an approach that had previously enjoyed the support of plenty of Republicans and even the Heritage Foundation.  Once Obama’s name was attached to it, however, GOP support for the concept completely vanished.

The legislative process was long and messy, perhaps unnecessarily so.  Remembering the Clintons’ grim experience with health care reform, Obama took pains to negotiate with insurance companies  and caregivers and gave plenty of authority to Congress to shape the bill instead of presenting legislation and demanding immediate action.  Important parts of the bill, such as the public option, fell by the wayside.  To make matters worse, the roll-out of the website was mishandled, some of the statements made to support the bill were demonstrably untrue, and the Supreme Court limited the scope of the bill in a terrible decision which made the Medicaid expansion optional.  Republican voters hated the program because they viewed it as just another redistribution/entitlement goody bag for the undeserving poor.  Consumers complained about rising costs and limited benefits.  On the whole, therefore, it was a political liability for the administration and for Democrats in general.

From a policy perspective, Obamacare has been a qualified success; the uninsured rate has fallen significantly, and the medical cost curve was bent.  The GOP alternatives to it all benefit the healthy and the wealthy at the expense of the poor and the medically needy.   The GOP is no longer in a position to make cynical and opportunistic objections to the status quo;  they will have full ownership of whatever new product they create.  The outcome of the 2017 legislative process is very much up in the air.

In the worst case scenario, all of the checks and balances in the system are no match for all of Trump’s worst characteristics:  his thin skin; short attention span; authoritarian temperament; lack of interest in policy details; and neo-mercantilist ideas.  The disasters that follow fall into three groups:

1.  No nukes is good nukes:  Threats to use nuclear weapons become a routine part of the Trump diplomatic arsenal.  When opponents refuse to back down, he is forced to follow through in order to maintain any kind of credibility.  As a result, the notion of a nuclear attack on our country is no longer unthinkable. Likely victims:  North Korea and Iran.

2.  The Great Recession, Part Deux:  Trump opts for the “Trade Warrior” economic scenario, with predictably appalling results.  The Fed jacks up interest rates; the dollar rises; exports and the housing market collapse; supply chains are disrupted; and the country falls into a recession.  To make matters worse, the GOP, as a result of its opposition to the Obama stimulus, is intellectually obligated to resort to Hoover-era remedies to the recession, which makes matters even worse.  Stagflation reigns.

3.  Ve have vays of making you talk:  Unable to deal with failure, Trump doubles down by wrapping himself in the flag and ignoring the Constitution. Using his Twitter account, he encourages his reactionary friends to harass and beat up his adversaries.   There is discussion about declaring martial law.  New forms of surveillance and interrogation are put into wide use, and the administration misuses its regulatory powers to stifle opposition.  The GOP leaders in Congress, of course, do nothing to stop this, because, after all, he gave them their big regressive tax cut, and the fate of the country is small potatoes compared to that.

The PM called Queen of the May

Gave her big speech on Brexit today.

Would it be soft or hard?

Now she’s shown us her cards.

It’s the hard one she’s chosen to play.

The HHS man named Tom Price.

To Obamacare’s friends, he’s not nice.

He says ACA must go.

What comes next, no one knows.

Where this ends is a roll of the dice.

The 45th President Trump.

He played the red voters for chumps.

They voted for change

Not a full rearrange

They’ll own it when stocks start to slump.

Obama’s efforts to combat climate change essentially came in the following three waves:

1.  As I noted yesterday, a portion of the stimulus bill was directed towards innovation in clean energy.  Sensitive to the allegation that the administration was “picking winners,” Obama directed funds to a wide range of companies in the hope of improving his chances of success.  Indeed, as expected, some of the funds were wasted, and he paid the price politically, but the cost of clean energy has come down significantly over the last eight years, and these investments are entitled to at least a small part of the credit.
2. In an effort to placate the GOP, Obama proposed a cap-and-trade program in lieu of a carbon tax;  after all, hadn’t McCain supported cap-and-trade?  In the end, however, an alliance of Democrats from energy-producing states and Republicans killed cap-and-trade.  Don’t expect either a carbon tax or cap-and-trade to be resurrected at the federal level in the foreseeable future unless the GOP-affiliated economists who support it in exchange for income tax cuts suddenly gain a lot more influence within the party.
3. In the absence of carbon pricing legislation, Obama did what he could through regulation and  international diplomacy.  It will take some time, but most of these efforts can be overturned if Trump is determined to do so.

How much of the Obama legacy will endure?  Probably less than we would like, but more than we think.  The major polluters have made investment decisions that cannot easily be overturned, and they will probably view the current situation as a regulatory blip, given the state of the data and opinion in the rest of the world.

The best case scenario assumes that Trump ultimately winds up governing more or less as a generic Republican with–shall we say–some major stylistic differences.  This results in the following:

1. The inevitable big regressive tax cut is not accompanied by major entitlement cuts, and the trade war quickly fizzles due to fierce opposition both at home and abroad.  The country consequently experiences what I have labeled the “Funhouse Reagan” economic scenario:  a skyrocketing deficit; higher interest rates; and a recession. It isn’t as bad as the “Trade Warrior” scenario, however.
2. Resistance from Republicans in Congress and members of his own cabinet causes Trump to give up on the Unholy Alliance with Russia.  The Trump foreign policy is conventional, albeit hawkish.
3.  The North Korea war follows the script I posted a few days ago.  Kim does not launch suicide attacks against South Korea and Japan.
4. Trump backs away from his confrontation with China in exchange for some cosmetic changes on trade.
5.  Most of Obama’s climate change measures prove to be irreversible.
6.  Trump violates some constitutional norms, but his efforts to stifle public opponents are limited to Twitter attacks and the odd libel suit.  Our freedoms remain intact.
7.  Dodd-Frank is not repealed, and there is no major banking crisis.
8.  Obamacare is watered down somewhat, but is not truly repealed.

This scenario will only occur if the GOP establishment gains control of the administration due to Trump’s short attention span and lack of interest in policy. Don’t bet the ranch on that.

If I recall correctly, the principal GOP presidential candidates in 2008, even including John McCain, supported some sort of stimulus in the face of the deepening recession.  This was in keeping with past practice, including the period after the bursting of the tech bubble during the Bush Administration. When the Obama Administration proposed a stimulus, however, the GOP completely changed course and complained bitterly about waste and pork.

The stimulus essentially had five parts:  additional safety net payments; aid to state and local governments; temporary tax cuts; a public works program; and investments in clean energy.  The safety net payments effectively reduced misery and propped up aggregate demand. The aid to state and local governments similarly worked to maintain governmental service levels, while boosting demand.  The tax cuts, which were largely an unsuccessful attempt to bring Republicans into the fold, were a mixed bag;  large portions of the proceeds were predictably used for savings or to pay down debt, which didn’t help with the short-term problem.   The public works program was conceived as an updated version of New Deal programs, but the approval process for infrastructure projects is far more convoluted than it was in the 1930’s, and infrastructure is no longer built by armies of strong men with shovels, so this part of the stimulus was a bit of a disappointment.  Unlike the rest of the package, the energy investments were not really viewed as a short-term mechanism to create jobs and boost demand, so their effectiveness needs to be viewed on a longer-term basis.

Taken as a whole, the stimulus was a moderate success;  with the exception of a few GOP ideologues, there is a consensus among economists that it saved millions of jobs.  Left-wing critics, such as Paul Krugman, who complained that the stimulus was too small ignored both political realities and the weaknesses in its public works component.  The real question now is whether the GOP, by its vocal opposition to the Obama program, has precluded its own stimulus in the likely event of a Trump slump.  If it has, things could be even worse than I have predicted, which is saying something.