Donald Trump enters the office with the highest debt to GDP ratio of any president since Truman in 1948 (post WWII). (via SRP) pic.twitter.com/Pw3W6v9RYy
— Holger Zschaepitz (@Schuldensuehner) January 20, 2017
Today America will do something that’s always been pretty rare in human history, the peaceful transition of power. Back when Washington transitioned to Adams, it was unheard of. Today, a lot more common thankfully. I saw the above tweet and thought about other transitions of power. For example, Obama inherited quite a mess when he took over.
Presidents can only control so much. The second President Bush certainly didn’t anticipate wackos flying planes into buildings which caused his whole administration to switch focus. In the book Freedom From Fear, Roosevelt and Hoover didn’t get along. Hoover wanted to enact somethings to help the country during the transition period but Roosevelt and the Democrats wouldn’t play ball with him. That created more momentum for Roosevelt’s first 100 days.
Anyone that knows me knows I was not a fan of President Obama. I am an out of the closet Republican in Chicago. Obama was historic in more ways than just being the first non-white person elected President. I disagree entirely with his world view, and his view of institutionalized governments role in our lives. Economics experts will disagree depending on how they frame things. Supporters of Obama like Paul Krugman see no problem with debt and will say he was great economically for the country. People who see it the other way like John Cochrane will tell you GDP is anemic. We have had no real growth and Obama hurt more people than he helped with his policies. Obama is now for the history books.
That being said, I don’t agree in lockstep with the Republicans on every single issue.
There is no telling what Trump will do but he inherits different messes than most presidents. Debt to GDP ratio’s are important because you cannot borrow forever. Harry Truman’s was caused by fighting and winning WW2. Today, the deficit isn’t massive because of the war on terror. 65% of the federal budget is entitlements, cash payments to citizens via government programs. The way those programs are currently structured is unsustainable. No President from either side of the aisle has messed with them since they are the 3rd rail of American politics. Trump will have to.
Trump is certainly not your normal President. I wouldn’t expect that his policies will fall into strict Republican or Democratic lines. He uses Twitter in a similar manner that FDR used radio. But, 140 characters isn’t enough to do deep dives on specifics. I disagree with those that are in full panic mode and protesting. I think what Sarah Hoyt wrote is funny, and tongue and cheek.
Trump is not going to put you all in camps and install a Nazi state. He can’t, because George W. Bush already put you all in camps and installed a Nazi state. Oh, wait, he never got to do it, because we were already all dead in the nuclear war our cowboy president, Ronald Reagan, started by talking tough to the Russians. And that is when I got to the States. I’m sure people who’ve been here longer can explain to you how other Republican administrations already destroyed everything.
At the same time, there are certainly things that might be afoot that worry me. I am a big free trader. I don’t think that President or government should lean on corporate America to get what it wants. This past week, the Obama Administration received $20B in fines from various companies for various things. I don’t like that anymore than I do seeing a president talk to a CEO and negotiate directly.
I am a believer in common sense immigration policy. I think we need strong borders and we need to stop illegal immigration. I agree, we shouldn’t knowingly let terrorists into our country. But, America is better off because of immigration so we need to have a policy that works which will eliminate the black market in immigration and change incentives.
All the protesting seems very distasteful to me. In 2008 and 2012, Republicans weren’t boycotting or marching in the street. Instead they fixed their messaging and policies and won election after election both nationally and in states. The boycotting and protesting will further isolate Democrats into their urban bubbles. I think true Independents will find it bitter too and it will drive them into the Trump camp.
That doesn’t mean I think Democrats should just go along. Of course they shouldn’t. But, if they haven’t realized that identity politics doesn’t play well at the polls, they need to take a step back and re-examine where they are headed and where they are. They are the party of Big Unions, Big Government, and teetering on a full embrace of socialism. The last time Republicans were in this bad of shape it was 1974. Reagan changed them for the better. Democrats simply saying “They will fight” without having anything new to fight for isn’t going to work.
A lot of Democratic policy is rooted in FDR or Woodrow Wilson. Much of what we did in the US was turned into a system. Factories, factory farms, factory schools, factory government. We churned out things. With the evolution of technology and the way things are going, that philosophy doesn’t work anymore. “One size fits all” has turned into “Custom fit for your DNA”. Despite what people are saying, the technological advances we are seeing daily should give everyone hope for a better life in the future. How many hours will be freed up by driverless cars?
We have seen a lot of institutions exposed in the past year for what they really are. As Warren Buffett says, “Only when the tide goes out do you discover who’s been swimming naked.” The media, agencies in our government that are supposed to treat everyone equally, and other long time institutions are actually weaponized on behalf of one side.
Trump and the Republicans have four years to get some things done. Their hold on power is more tenuous than you think. In 2000, Bush over reached on some issues and it lead to a 2006 loss of both houses of Congress-and Obama in 2008. Business executives assuming the levers of power in government will find that they have a lot of process to go through that they aren’t used to. Government moves at the speed of molasses. However, don’t underestimate their familiarity with building consensus. CEO’s of corporations aren’t kings that rule like dictators.
Despite the rally in the stock market, there are undercurrents in the economy that are very troubling. While waters on the surface seem calm, a lot of us see below them and don’t like what we see.