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China Lodges Formal Complaint
We're about three weeks into the Trump era, and still about six weeks from the commencement of the Trump presidency, and The Donald has triggered his first couple of international crises. First, on Wednesday Trump cozied up to Pakistan, which made India very angry. Yesterday, as we and everyone else reported, it was an enormous breach of protocol when he accepted a phone call from Taiwanese president Tsai Ing-wen (because on paper, at least, the U.S. does not believe Taiwan is a country so at best its "president" is really the "governor" of a Chinese province). Yesterday, China lodged a formal complaint with the U.S. State Department, writing (in part), "We urge the relevant side in the US to adhere to the 'one China' policy, abide by the pledges in the three joint China-US communiques, and handle issues related to Taiwan carefully and properly to avoid causing unnecessary interference to the overall China-U.S. relationship."
Trump and his lieutenants are shocked (or, at least, pretending to be shocked) by the response. He himself took to Twitter to observe that it is, "Interesting how the U.S. sells Taiwan billions of dollars of military equipment but I should not accept a congratulatory call." Similarly, Sen. Ted Cruz (R-TX) took to the platform to tweet that, "I would much rather have Donald Trump talking to President Tsai than to Cuba's Raul Castro or Iran's Hasan Rouhani. This is an improvement." Do they really not understand the distinction here? Ted Cruz, smart as he is, is surely just being disingenuous. As to Trump, who knows? Nobody, even the Chinese government, actually thinks the Taiwanese government does not exist. Similarly, nobody believes that Tsai Ing-wen is a greater evil than Hasan Rouhani or Raul Castro. These issues are entirely symbolic; for the President of the United States to take Tsai's phone call is tantamount to serving beef when India's contingent visits the White House, or asking Pope Francis if he'd like "some female companionship" when he comes to town, or putting Union Jack bedsheets on the bed when the President of Ireland (Michael D. Higgins) visits. Whether or not such actions were deliberate, the recipients are going to assume they were, and will act accordingly. Given Trump's remarks earlier this week about burning the American flag, presumably he grasps how powerful symbolic gestures can be.
And while it may not be clear exactly what Trump is thinking, there is one thing that has already become crystal clear: He is being played by the world's leaders. Tsai Ing-wen never got Barack Obama on the phone, and likely never even tried. On the other hand, she jumped at the opportunity to ring Trump, and then promptly let everyone (translation: China) know the call had taken place. Pakistan's Nawaz Sharif went even further, not only getting a call through to The Donald, but then releasing the transcript, so that everyone (translation: India) could see it. These are shrewd operators, with decades in public service, who sense that there is an amateur in Trump Tower just waiting to be exploited. The longer that Trump & Co. deny this, the more damage that will be done. (Z)
David Petraeus to Audition for Secretary of State Today
Disgraced former four-star general David Petraeus clearly wants to be Secretary of State. He also knows that Donald Trump gets most of his news from watching "the shows." So today Petraeus will audition for the job by appearing on ABC's "This Week." Petraeus' problem is that he intentionally (and illegally) gave a journalist, who happened to be his lover, classified material. Since one of Trump's main lines of attack on Hillary Clinton is that her use of a private email server might have allowed classified material to fall into unauthorized hands, the fact that Petraeus intentionally gave classified material to an unauthorized person is going to be a huge problem at a Senate confirmation hearing. The issue is sure to come up during the interview today on ABC and what Petraeus has to do is show how he will respond under fire. He might say: "Yes, I gave away classified material and was convicted for it, but I paid my fine so all is well now. Case closed." The media and Trump will be listening very closely to what he has to say on the matter since his chances of getting a cabinet job certainly hinge on it. (V)
Sarah Palin Attacks Trump
Some Republicans have praised president-elect Donald Trump's deal with Carrier to save about 1,000 jobs in Indiana, saying it is evidence that he can save American jobs. Former vice presidential candidate Sarah Palin is not impressed, calling the deal "crony capitalism" and a perversion of the free market. She said that the free market cannot function properly if politicians threaten or bribe individual companies to do things that benefit the politicians. Palin was not subtle at all. She described what Trump did as a "hallmark of corruption" and "socialism."
Palin's views are a bit surprising because she supported Trump during the campaign and was being considered for the position of Secretary of Veterans Affairs, even though she is not a veteran and knows little to nothing about their affairs. Given that Trump generally hires people who are completely loyal to him, Palin is probably out of the running now. (V)
Job Destruction is Part of America's Secret Sauce
Donald Trump presumably expected his Carrier deal to be widely celebrated and, if the past is any indication, is probably fuming about the criticism he's gotten. University of Michigan economist Justin Wolfers, writing for the New York Times, has offered an interesting assessment of how Trump's thinking on this subject has everything backwards. Wolfers argues that job destruction is a critical part of the dynamism of the American economy. Using the metaphor of a parking garage, he proposes that some cars pull out (jobs destroyed), more cars pull in (new jobs created), and the real goal is to keep the garage as full of new cars as is possible. In just the two hours that it took Trump to fly to Indiana to brag about the 1,000 jobs he'd saved, 6,000 American jobs were destroyed. Wolfers proposes that saving jobs that are no longer viable for the U.S. economy is tantamount to stopping cars from leaving the garage, when instead the president should actually be focused on encouraging new cars to park. This kind of churn keeps the U.S. economy competitive and cutting-edge, while the Trump approach is largely about clinging desperately to the past.
Meanwhile, one of the nation's foremost watchdogs for this kind of corporate welfare is Good Jobs First, which works to catalog these supposedly job-saving deals while also advocating for "smart growth" of the sort that Wolfers is talking about. To nobody's surprise, they too are sharply critical of the Carrier deal, agreeing with Sarah Palin (see above) that it's just another case of crony capitalism. In a press release, Executive Director Greg LeRoy writes, "While I congratulate those fortunate workers whose jobs will be retained, I hope no one will mistake this episode as any kind of policy breakthrough. By swapping taxpayer dollars for political favors, this Carrier deal is very much business as usual." It will be interesting to see if Trump attempts this kind of maneuver again, or if it's going to be a one-off, given both his time constraints and the blowback he's gotten. (Z)
Trump Inherits a "B or B+" Economy
In 2007-08, the U.S. economy hit depths unknown for decades, perhaps as far back as the Great Depression. Under Barack Obama's stewardship, it has steadily recovered, with unemployment reaching a remarkably low 4.6%, and the stock market soaring to record heights. This is the happy news for Donald Trump, who inherits what economist Paul Ashworth calls a "B or B+" economy.
And now, the bad news. Donald Trump has promised to drive the economy to even greater heights, promising 4% growth (thus doubling the 2% we've seen during the Obama years). Beyond the fact that the U.S. economy rarely trends upward for 10-12 straight years (and by "rarely," we mean "it never has"), there's another huge problem. Two major factors drive growth: (1) More people entering the workforce and (2) workers being more productive on the job. The first of these is simply unachievable under current circumstances. Unemployment is low, and many of those who still do not have jobs (or aren't even looking) are handcuffed by not having the skills needed for a 21st century economy. Importing workers from abroad is obviously a non-starter for a president elected on an anti-immigrant platform.
These things being the case, #1 is off the table, and the only viable path to growth would seem to be #2: increased productivity for the workers that are already employed. The problem here is that these kinds of gains are very hard to achieve, particularly in the short term, since they depend on education and retraining, research, experimentation, and the "churn" described above. Further, Trump has taken no actions, nor announced any policies, that would seem to attack the problem from this angle. So, that 4% annual growth is seeming rather unlikely. Indeed, if the devil visited Trump (again?) and offered to guarantee 2% growth for another 4 years (say, in exchange for Mike Pence's mortal soul, or maybe a night in the Lincoln bedroom), Trump should jump on that deal. (Z)
No Recount in Pennsylvania...Maybe
The state of Pennsylvania really, really doesn't want a recount because it would be expensive, and difficult, and probably wouldn't change anything. Consequently, a state judge threw up some pretty big roadblocks in front of Jill Stein and the Green Party on Friday, including an unexpected demand for a $1 million bond. The Greens say they don't have the cash, so they dropped their bid for a recount in the Keystone State. Or, at least, that's what all the news outlets reported.
Late Saturday, Stein & Co. announced that what they were actually doing was shifting gears; dropping their fight in Pennsylvania's state courts so that they could move it to federal court. Details are necessarily scarce, so who knows what she has up her sleeve? However, it is certainly the case that a federal court is going to be reluctant to get involved, and that if they do, they're going to want a better reason than, "We just don't think it was fair." So, at the moment, this seems like a desperation move, though of course we'll find out for sure sometime this week. (Z)
NeverTrumpers Throw in the Towel
During the campaign, a substantial number of Republicans bitterly attacked Donald Trump as unfit for public office. As the reality of a Trump presidency begins to sink in, many of them are changing their tune. Mitt Romney excoriated Trump as a "fraud" and a "con man" during the campaign, but sat down with him for a lovely dinner of frogs' legs and crow a few days ago. Former Defense Secretary Robert Gates wrote an op-ed earlier this year calling Trump "beyond repair" and "unqualified and unfit to be commander in chief." Last week, he visited Trump twice in Trump Tower. Former counterterrorism official Fran Townsend signed an open letter during the campaign saying that Trump would make America less safe. This week she also met with Trump, and is said to be under consideration for Secretary of Homeland Security. Gov. Nikki Haley (R-SC) earlier this year said that if Trump became president, we would have a world war. So naturally he appointed her ambassador to the United Nations to prevent said war. There are numerous other examples. (V)
Could Italy Be Next?
A lot of people around the world are unhappy with the current state of affairs. The first big rejection of the status quo came in the form of Brexit, the referendum in which Britons decided to leave the European Union. Next came the unexpected election of Donald Trump. Today, Italians will go to the polls to vote on a set of constitutional reforms championed by the Italian Prime Minister, Matteo Renzi. If Renzi loses, it will be the third major rejection of business as usual and a golden opportunity for the Five Star Movement, a populist movement that opposes the Italian establishment.
Italy is the next chance for people to poke the powers that be in the eye with a sharp stick, but it won't be the last. by any means. On March 15, 2017, there will be elections in The Netherlands, In recent polls, the anti-immigrant party of Geert Wilders, a sort of mini-Trump with hair to match, is expected to become the largest party (although not a majority of the parliament). In France, extreme right-wing candidate Marine Le Pen will try to be elected president in April. Depending on how well these candidates do, there could be more of them making strong showings in other countries afterwards. (V)
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