I write out of disarray, from a field of compatriots in disarray. We’re drifting like astronauts, distantly tethered by emails like the one I just got from a friend: ‘i feel like he is making everyone sick, and bipolar./i feel like I am so incredibly ill-equipped to deal with any of this./i’m taking blind advice from all comers without feeling like anything is remotely adequate./ i feel nostalgic for all of life before Nov 8, 2016.’ Music helps and hurts. In a college classroom I played Gil Scott-Heron’s ‘Winter in America’, stirring up my old Nixon-era sense of abjection, and cried in front of my students. Of course, such behaviour makes us eligible for the web-scorn of alt-right triumphalists (‘Anguished by Trump, Lena Dunham Flees to Posh Arizona Resort, Asks Rocks for “Guidance”’). At these moments we’re the special snowflakes we were wishing to see in the world, the canaries in our own dystopian coal mines. But we’ll brandish our sensitivities proudly (if not our safety pins, which may be too smug and lame a gesture), since they’re what we’ve got, and are anyway better than robotic numbness, better than ‘normalisation’.
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Vol. 39 No. 2 · 19 January 2017
The LRB has by now published quite a lot about Donald Trump, none of it laudatory, much of it contemptuous, most recently by Jonathan Lethem (LRB, 15 December 2016). I happen to believe that Trump has three perfectly realistic ways of fulfilling his promises to his voters and ensuring his re-election. His first big idea is to build more than a trillion dollars’ worth of much needed infrastructure (including canal locks and other such things, not just highways, bridges and tunnels) on an accelerated schedule. This will generate millions of well-paid construction jobs and relaunch the global commodity cycle, in effect compensating for the Chinese deceleration, thereby increasing demand for US heavy construction and mining gear. Obama too had wanted ‘shovel-ready’ public works when he came in, but he also appointed people at the Environmental Protection Agency and elsewhere in government who were determined to study every project ad infinitum, all too ready to kill it over their concern for a rare species of frog or whatever. They also efficiently blocked everything they could block, starting with oil pipelines. Trump will not sabotage himself as Obama did: he has named someone at the EPA who will enforce the law, and no more than that. Nor will he write hundreds of executive orders as Obama did to block things that the law would allow. Simply by revoking some of Obama’s executive orders, he can create a few hundred thousand jobs on top of the millions that will be generated by his infrastructure programmes.
Trump’s second big idea is deregulation. Aside from the regulatory explosion of the Obama years, which has inflicted costly, sometimes crippling, new restrictions on industry (and even on small workshops), there is a mass of badly outdated regulations that impede economic activity. Most reflect the preferences of the privileged, for whom an infinitesimal environmental improvement is worth any number of lost jobs, but there are also consumer-protection laws that degrade the standard of living of many Americans. For example, at present more than 50 per cent of American households cannot afford a new car because of regulations that satisfy the safety-conscious affluent but also greatly add to the price. The cheapest cars in Europe can be bought for less than €8000; in the US, the cheapest cars cost $13,000.
Trump’s third big idea is that US trade policy should seek to maximise employment, instead of being an expression of religious purity in service of the Free Trade god. He has complained that the huge chronic trade deficit with China implies the loss of millions of manufacturing jobs. Trump wants some of them back, and if exhortation fails, he is willing to use his executive powers to put pressure on US companies that do their manufacturing abroad to come home. Anti-Trump columnists insistently and confidently assert that the billionaire has no intention of keeping his promises to his voters, and would therefore do nothing at all for them. I happen to disagree.
Chevy Chase, Maryland
Vol. 39 No. 4 · 16 February 2017
Edward Luttwak, setting out what he believes will be Trump’s faithfulness to his voters and the ultimate success of his economic policies, is both unfair to Obama’s legacy and panglossian in his estimation of the likelihood that Trump will succeed (Letters, 19 January). First, Obama’s stimulus package was constrained by the Republican Congress. To ensure its passage he had to cut $62 billion that would have gone directly to infrastructure spending. Much of the package had to be spent as transfer payments to individual states which, faced with an accelerating downturn in the economy, had to bridge huge budget gaps. Obama’s stimulus package was not nearly enough to counter the downturn while simultaneously boosting recovery. In size it will be dwarfed several times over by what the new Republican Congress is prepared to grant Trump.
Second, to blame Obama’s limited impact on environmental vigilance and necessary regulation is both short-sighted and a diversion. The record of Republican deregulation efforts has been disastrous: from the near collapse of the airline industry and implosion of savings and loan banks in the 1980s to the financial crisis of 2007-8 that nearly precipitated a depression.
Third, Luttwak fails to consider Trump’s infrastructure spending plans in the context of his economic programme. Trump proposes massive cuts to corporate and individual income tax rates for the wealthy on the basis that this will generate new investment in manufacturing and lead to the reshoring of American industry. Never mind that this approach failed to work in Canada. Combined with massive spending on infrastructure (one trillion over ten years), it will balloon the national debt and create an inflationary spiral that the Federal Reserve Bank’s raising of interest rates will be insufficient to staunch. The Fed has indicated that the current strength of the economy bequeathed by Obama makes such a stimulus unnecessary and even dangerous.
What’s more, Trump’s protectionist trade policy will not lead to a significant increase in American employment, for two reasons. It will be accompanied by greater investment in robotics, as a hedge against higher US wage rates. The Mexican plant abandoned by Ford under pressure from Trump was slated to employ 2800 workers; the Michigan plant that will assume its load will employ just seven hundred. And Trump’s trade policy is likely to provoke a trade war with countries that presently enjoy a trade surplus with the US. Tariffs on their goods will handicap American importers and disrupt supply chains, which will lead to higher unemployment. Trump’s economic programme is more likely to lead back to the stagflation of the 1970s than forward to an explosion of economic growth. Obama’s steadily mounting real growth will be looked on with nostalgia in four years’ time.
University of California Los Angeles