Trump’s First Mistake

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Given his electoral-college victory, Donald Trump has amassed short-term political capital.  How he spends it will determine his success.  Early indications are that he will fritter it away.

Beginning January 20, 1917, Americans should expect an ultra-conservative government accentuated by Trump’s impetuousness and irascibility.  We can count on the Trump Administration to overreach.  That’s why Trump will misuse his political capital.

Trump was elected because his supporters believed he would shakeup the economic order.  Before the election, Democratic pollster Pat Caddell’ survey of likely voters (http://www.foxnews.com/opinion/2016/11/07/patrick-caddell-real-election-surprise-uprising-american-people.html#) found 87 percent of respondents believed, “The country is run by an alliance of incumbent politicians, media pundits, lobbyists and other powerful money interests for their own gain at the expense of the American people.”  The New York Times exit poll indicated that of those voters whose most important candidate quality was “can bring needed change,” 83 percent chose Trump.

Jobs:  Trump should use his political capital for a massive job-creation initiative.

Trump won the election because his supporters believed that an outsider could shake up the status quo and bring some new measure of economic prosperity to America’s have-nots.  In his election night speech, Trump said: “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals.  We’re going to rebuild our infrastructure, which will become, by the way, second to none.  And we will put millions of our people to work as we rebuild it.”

What Trump is suggesting seems to be the same program that President Obama suggested after the initial recovery from the great recession; at that time it was blocked by congressional Republicans.  Obama wanted a massive infrastructure-based jobs program financed by taxing corporations and the wealthy.  Republicans didn’t want new taxes, and they couldn’t abide deficit financing for jobs, so they squashed Obama’s program.

Now Trump is proposing a similar infrastructure-based jobs program but with a different method of financing: “The American Infrastructure Act leverages public-private partnerships and private investments through tax incentives to spur $1 trillion in infrastructure investment over the next ten years.”  For example, in Trump’s plan, America would finance new highways by giving construction companies tax incentives up front and, after the highway was completed, letting the builder charge tolls.

It’s difficult to see how Trump’s approach will jumpstart job creation or how it will rebuild America’s diverse infrastructure. Furthermore, it seems unlikely that Trump will get the support of establishment Republicans. (http://www.theatlantic.com/politics/archive/2016/11/trumps-infrastructure-challenge-to-republicans/507656/)

If Trump really is a transformational President — if he really is serious about changing a rigged system — then he will use his political capital to push through a real infrastructure program.  For an early reading of Trump’s intention, watch what happens when the Indianapolis Carrier factory closes [http://www.nytimes.com/2016/11/13/business/economy/can-trump-save-their-jobs-theyre-counting-on-it.html].  (For comparison six months into the Trump Administration: as. of 11/8/16, the U.S. unemployment rate was 4.9 percent, the number of manufacturing jobs was 12.2 million, and quarterly GDP growth was 2.9 percent.)

Immigration: Rather than focus on jobs, Trump will likely settle for some sort of immigration initiative.

During his campaign, Trump made three immigration-related promises:  build “a wall” along the US Mexico border, deport all of America’s undocumented immigrants, and block immigration of all Muslims.  Early indications are that Trump has softened his position on each of these.  (http://www.nytimes.com/2016/11/14/us/politics/donald-trump-twitter-white-house.html?partner=rss&emc=rss)

Initially Trump said his wall would be 1000 miles long, rise 35-40 feet, and cost $8 billion.  The Washington Post studied Trump’s wall design and estimated that it would cost $25 billion for design and material; in addition, the construction would require “40,000 workers per year for at least four years.”  (https://www.washingtonpost.com/news/fact-checker/wp/2016/02/11/trumps-dubious-claim-that-his-border-wall-would-cost-8-billion/)

Trump has backed off his demand that Mexico pay for the wall which leaves its funding an open question.  One way to finance the wall would be to hide it in the Department of Homeland Security budget  — estimated at more than $40 billion in FY 2017.  If packaged in this fashion, the Trump Administration could try to sell the wall as a “twofer,” a combination security measure and jobs initiative — even though the construction jobs would not help workers in the rust-belt states.

Trump has also softened his position on deporting illegal immigrants.  Pew Research says there are actually 11.3 million illegal immigrants (who comprise about 5.1 percent of the US labor force) (http://www.pewresearch.org/fact-tank/2015/11/19/5-facts-about-illegal-immigration-in-the-u-s/.)  The Atlantic estimates it would cost $140 billion to deport them – with additional billions in economic consequences [http://www.theatlantic.com/politics/archive/2015/08/how-much-trumps-immigration-plan-would-cost-the-us/445830/].

Now Trump says he would initially deport “two million to three million immigrants” he sees as criminals or “dangerous.”  Fact checkers say there are only “820,000 undocumented immigrants living in the US with a criminal record.” (http://www.truth-out.org/news/item/38362-trump-puts-3-million-on-notice-for-deportation)

Finally, in December Trump called for “a total and complete shutdown of Muslims entering the United States.” Once again his position has evolved and now Trump calls for banning immigrants from “terrorist countries.”

It’s clear that Trump could ban immigrants from countries such as Afghanistan, Iraq, Pakistan, and Syria without much congressional opposition.

Trade: Rather than focus on jobs or immigration, Trump might take the easy way out and focus his political capital on trade,

During his campaign Trump railed against trade deals such as the Trans Pacific Partnership (TPP) and NAFTA.  While the TPP is already dead — it can’t get the necessary congressional votes, NAFTA continues.  Trump could kill it without getting congressional approval (http://money.cnn.com/2016/11/15/news/economy/trump-nafta/) by invoking article 2205 on day one — US withdrawal would happen six months later.  It’s unclear what the impact would be.

Prediction: Trump’s presidency will be defined by his first 100 days in office.  Rather than govern as an outsider, and enact a radical populist initiative, such as an infrastructure-based job program, Trump will succumb to the Republican establishment and settle for xenophobic immigration programs.  It will be his first big mistake and one that is likely to scuttle Republican prospects ins 2018.