Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

08 December 2016

How Trump Thinks


[For a recently popular page on the coming transition in free-world leadership, click here. For a recent post on saving federalism in the EU and US, click here. For a regularly updated page on Trump’s transition, click here.]

Immigration
Keeping factories at home
Taiwan
Global warming
Conclusion

Is Donald Trump as erratic, scatterbrained and tone deaf as he sometimes seems? Increasingly, the answer appears to be “no.”

What makes him seem that way is something that lots of us do. It’s a way of arriving at solutions to problems gradually, by proposing rough and obviously imperfect solutions and then testing and modifying them until they seem right.

Scientists and engineers use the method all the time. They call it “approaching a solution by successive approximations.” The term is self-explanatory.

Politicians seldom use that method because each approximation, especially the first and roughest, can foment opposition if made public. Unfortunately, Trump does all his thinking in public; he loves the attention. If his successive approximations zig and zag across ideological lines, his successive-approximation method can make almost everyone hate him by the time he arrives at his final approximation. By then his detractors may hate him so much that they can’t even focus on whether the final approximation might actually work.

What drives the establishment, foreign diplomats, and much of the public crazy about Trump may be just this method. It may also be that Trump is self-evidently only midway through his many course corrections for his most important policies. Let’s take a look.

Immigration

Perhaps more than any other, immigration is the issue that got Trump elected. More particularly, it’s what to do with the estimated eleven million undocumented immigrants who are here in the US already.

Donald’s initial solution—his first and roughest approximation—was to deport them all. After all, they’re here illegally, aren’t they? That’s what a lot of his supporters and so-called “conservatives” think.

But that idea didn’t sit well with the Hispanic community and many others. The eleven million are mostly hard-working, peaceful and productive workers, who contribute to our economy in myriad ways. Many of them make life more pleasant for the 0.1%—including Trump himself—by serving as nannies, cooks, housekeepers, maids, gardeners, and handymen, or in the restaurants and hotels where the 0.1% spend large parts of their lives.

Undocumented immigrants accept low wages and imperfect working conditions because they are undocumented and fear deportation. So they lower costs for American businesses, including Trump’s own. That’s why Republicans often demagogue the undocumented but never get rid of them.

Finally, deporting all the undocumented would break up families that include citizens and lawful permanent residents, thereby causing heavy human suffering for no apparently good reason. Doing that would violate both our basic American credo, “Live and let live,” and doctors’ Hippocratic Oath: “Do no harm.”

So, after waves of assaults on these points, Trump now has proposed his next iteration: let’s deport only the undocumented immigrants who are criminals. That appears to be where he is now.

But this is where it gets interesting. Trump has aroused so much opposition by proposing initially to deport all eleven million, that huge numbers of voters and pols don’t trust him now, and maybe won’t ever. They say to themselves,
Oh, I get it! Trump is going to channel the infamous anti-immigrant Arizona Sheriff Joe Arpaio. He’s going to stop and frisk every Hispanic-looking person. Then he’ll deport anyone he can get to plead to (or convict of) a minor offense like jaywalking or driving with a broken taillight. He’s going to deport as many as he can, up to the whole eleven million, by making as many into ‘criminals’ as he can.”
Not surprisingly, that notion—which Trump himself has never contradicted—stirred up a lot of opposition, especially in California. It also stirred up a lot of support among Trump’s most rabid followers, who want to see all eleven million deported but never think about the unintended consequences.

But suppose Trump does something that he hasn’t done yet but might. Suppose he says, “No, I mean real criminals, i.e., those convicted of violent or dangerous felonies.” What then?

That might be the final approximation to a reasonable policy. How many people, including Hispanics and those on the left, are going to object to deporting convicted violent or dangerous undocumented felons, as long as the dragnet goes no further than that?

Keeping factories at home

The central problem of Trumps’s coming administration, and what he must to do appease his supporters, is to keep yet more American factories from going abroad and taking good American jobs with them. If he can’t do that, many of his own strong supporters say they will dump him.

His first approximation of a solution to this problem was to resurrect Smoot and Hawley. Remember them? They were the members of Congress who sponsored the high tariffs against Japan and Germany that helped provoke World War II. Trump sought to emulate them by threatening to impose 35% tariffs on goods imported from China and Mexico.

As many people pointed out—including many from Trumps’s own party—that was and is a terrible idea for a whole host of reasons. Among other things, it would penalize innocent and unknowing businesses, their owners and their employees in both Mexico and China. It would create instant inflation here at home, plus instant shortages of imported stuff we no longer make. If China and/or Mexico retaliated, it would create the biggest trade war in human history, which (if WWII is any guide) might lead to the biggest shooting war in human history, worse than World War II. At very least, it might cause China to stop buying our Treasury bonds, raising interest rates and our deficit and generally upsetting the global economic applecart.

So Trump’s first approximation of a solution to the departing-factories problem was a very, very bad idea. But yesterday he changed it, seemingly just a little bit. What if he leaves tariffs on goods from China and Mexico just where they are today: at zero or near zero, in accordance with GATT, WTO and other modern trade treaties? But what if he imposes brand-new 35% tariffs on imported goods made by American factories that move American jobs abroad?

That’s a whole different kettle of fish. Or at least it could be. The big question, which Donald hasn’t answered yet, is whether the tariffs would be imposed retroactively on the products of existing factories moved abroad, or only prospectively on the goods of factories moved abroad after a warning and/or a certain date.

If prospective, the new tariff would avoid almost all the objections to raw protectionism. It wouldn’t apply to the goods of any existing factories abroad. So it wouldn’t spike inflation, cause shortages, or tick off China or Mexico. In fact, neither China nor Mexico would see any immediate effect, or possibly any effect at all. Why? Because the purpose of the prospective tariff would be to prevent American factories from moving their jobs abroad.

If the tariff worked as intended, its entire impact would be to keep jobs in the United States, but not by making goods of foreign factories more expensive to buy here. Instead, it would prevent goods from ever being made abroad by moving additional American factories abroad.

It’s hard to characterize such a plan as “protectionist.” It wouldn’t protect American goods against foreign competition by making the foreign goods more expensive—the classical definition of “protectionism.” Instead, it would simply influence the plutocrats’ calculus in deciding whether to sell out American jobs for a temporary labor-cost advantage. It would force them to consider more carefully the longer-term advantages of building or preserving American factories for the American market: lower transportation costs (for both raw materials and finished products), proximity to distributors and customers, cultural familiarity with the marketplace (our own), and possible advantages in the education and skill of the work force.

To characterize these effects as “protectionism,” you’d have to be an extreme “free-market” ideologue. You’d have to believe that “free trade” necessarily means allowing the 0.1% to enrich themselves obscenely, whenever a temporary labor cost advantage allows, at the cost of selling American jobs abroad and importing lower-cost goods, to be sold to people whose “service” jobs have cut their salaries in half or more. Isn’t that exactly the opposite of what Henry Ford did—raising the salaries of factory workers so they could afford the cars they made and jump-start our Yankee consumer economy?

If the proposed prospective tariff worked as intended, it would never apply. It would be like nuclear weapons properly used as a deterrent, but never exploded. It would simply influence decisions in American corporate boardrooms to take into account American employees, the society that feeds them, and the longer term.

Taiwan

There are several other cases in which Donald Trump’s “successive approximations” style might make sense, but it’s too early to tell. One is his making a recent “impromptu” call to the president of Taiwan.

Every informed person knows the basic facts. China considers Taiwan a renegade province of China. Even over American intervention, China could probably conquer it in weeks, if not days. But the conquest would be horribly bloody, unnecessary and tragic for the Chinese people and for China’s stature in the world.

Moreover, Taiwan’s relatively autonomous existence serves both China and the US well. For China, it provides as an experiment in democracy and free markets, close to China itself and controlled for culture and language. (In this respect Taiwan is much like capitalist West Germany during the Cold War. Its “experimental” contrast with Communist East Germany was controlled for culture, language and history. We all know how that experiment turned out.) Taiwan’s free markets and vibrant world trade encourage massive cross-Straits trade in goods, services, capital and personnel, which has jump-started the economic development of China’s neighboring provinces.

Like Hong Kong, a relatively autonomous Taiwan also serves as a laboratory and breeding ground for democracy with a Chinese language and flavor. It allows China to observe and review, at close range and without language or cultural barriers, the results of changes that China’s own highly conservative government sees as too risky to make in China itself.

Both China and the United States hope that China and Taiwan can change, over the coming decades or centuries, so that Taiwan eventually merges with China peacefully and voluntarily, without war. That’s why both sides adhere to the present ambiguity of “one China, two systems.”

In making the improper and way-beyond-protocol phone call, Trump may have been reminding the Chinese not to take American cooperation and complicity in this rather delicate and self-contradictory ambiguity for granted. He may have been simply reminding China of the great value of American acquiescence in China’s view of Taiwan, as a bargaining chip with respect to other issues, such as trade and currency manipulation.

Global warming

As in the case of deporting undocumented immigrants, Donald’s initial position on global warming is alarming: ignore it! It’s a hoax spawned by China to bring us Yanks down.

That certainly woke a lot of people up! It not only got the attention of rubes who love their gas-guzzling muscle cars. It doubled down on their half-conscious suspicion that China, and not our own plutocrats, is responsible for them flipping hamburgers at McDonald’s or greeting customers at Wal Mart, instead of making cars, TVs, or appliances with more self-respect and for much more money.

But like Donald’s extreme initial position on deporting all eleven million undocumented immigrants, it’s only an opening bid. What matters is how and where the successive approximations go or, if you like, the bargaining process. That process, I think, is now in it’s very early stages, if only because Donald has not heard much about global warming except from his fellow developers, plutocrats and entertainers who, to put it mildly, don’t know much about climate change, or about science generally.

For those who are, perforce, already coming to know Donald Trump, it was no great surprise that he “accidentally” spent an hour and a half with Al Gore. He may not be humble or have complete intuition on what he doesn’t know. And his attention span is reportedly not very long. But he does seem to be willing to listen. And he does seem to have a vague intuition when his own knowledge and understanding are grossly deficient. That is certainly true of global warming.

Fortunately, there are plenty of politicians (including Republicans) and powerful business tycoons who can set him straight. The problem is that the mostly obscure and unknown people he has nominated or appointed to his Cabinet so far don’t seem to be among them. That’s why it’s important for the great show of notables traipsing to Trump Tower to continue.

Conclusion

Maybe it’s best to not to prejudge what a guy with absolutely no experience and little knowledge, but who appears willing to learn and to listen to anyone, does in the first rude weeks of his improbable transition.

What often makes Donald Trump seems crazy or retarded is the extremity of his initial positions. That’s certainly true of immigration. “Deport them all!” is not a practical, fair, economically advantageous, or even possible solution to the presence of eleven million undocumented people deeply woven into the fabric of our economy and culture. But it certainly got Trump a lot of attention, plus some votes from the crowd that doesn’t think beyond its last uncomfortable encounter with Spanish at the supermarket check-out counter.

That was his goal then: shaking things up and winning a high-stakes election. Now he has done that, past tense. And it’s hard to argue with his success, specially against such mincing, un-original temporizers as Hillary and Jeb!

So my advice to everyone, at this early stage, is to sit back and watch the show. It’s certainly not what any of us expected. But, then again, most of us observers expected skilled workers to grudgingly accept their increasingly sad fate in order to justify our abstract theories of what “free trade” and “liberal economies” mean, and how the world ought to work but self-evidently doesn’t.

Trump, his supporters and their likes in Europe have blasted those little theories of ours into a thousand little pieces. Trump himself has won the hardest and most important job in the world. His methods are unusual, to say the least.

But his next goal is to “make American great again” by putting millions of our skilled workers back into jobs worthy of their skills. Before we write off a guy who has, from out of nowhere, disrupted everybody’s fixed expectations, we ought at least to watch him for a while.

I don’t know about you, but I could get behind deporting undocumented immigrants who have been convicted of violent or dangerous felonies—and only them. I could also get behind a tariff on imports from factories designed and built overseas, using American capital and technology, by overpaid executives who were warned beforehand that such tariffs would apply. In fact, unless someone shows me some specific, dire and foreseeable unintended consequences of those tariffs—besides those aforementioned executives having to think smarter and plan a little longer-term in order to earn their obscene pay—I could even cheer a little for them.

In 1993, Hillary Clinton famously closed off the process of developing “Hillarycare," even to members of her own party. It failed. After promising to put the negotiations on C-SPAN, President Obama likewise closed down the process of developing the thousand-page legislative behemoth that became “Obamacare.” It passed, but with only four votes in the Senate. And it has been the subject of controversy ever since. Part of the reason for that controversy is the law’s obscurity, length and hideous complexity.

Wouldn’t it be better to arrive at a rough national consensus on a few clear basic principles before we let the lawyers complexify them to death? Trump’s successive-approximations approach could do that.

Sure, Trump’s thinking out loud on the world’s biggest stage is messy and risky. Sure, it’s not the way things have been done in Dodge City up to now. Sure, the only people who can participate in the successive approximations are the elite whom Trump calls into Trump Tower, or the elite who bull their way in with prestige and panache.

But if modern, disputatious lawyers had drafted our Constitution, it would weigh and read like the federal budget, and no one would pay the slightest attention to it. Anyway, isn’t the whole Trumpeting process, as messy and embarrassing as it is, more democratic than letting unknown and obscure advisors like Steve Mnuchin, Wilbur Ross, and Ben Carson call the shots in secret sessions? Isn’t it in everyone’s interest to have the parade of notables into Trump Tower continue for as long as possible?

So before we write Donald Trump off early in his transition, let’s see what a successive-approximations thinker and reputed hard bargainer can do. Rush Limbaugh and Darth McConnell are hardly great thinkers, humanitarians, or even real patriots. They wrote President Obama off within two days of his inauguration. That hasn’t worked out so well, has it?

Update on 12/9/16: Trump’s nomination of de-regulatory radical Scott Pruitt for the post of EPA Administrator changes this analysis somewhat. So do his nominations of Wilbur Ross for Commerce and Ben Carson for HUD. For detailed analysis, click here.

If, as they say, personnel is policy, these three nominations probably represent Trump’s final approximations on the issues of fossil fuels, pollution, global warming, support for big business generally, and fair housing. Whether they will affect his successive approximations on other vital issues, such as immigration, deportation, and keeping factories at home remains to be seen.

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