The Perils of Being Led
by the Bankruptcy King
July 16, 2017
President Trump is currently proposing major changes to three industries that account for approximately one-third of the U.S. economy – health care, energy and the internet. In each case, the decisions are primarily ideologically based, providing red meat to Trump’s base who are completely unaware of the potentially millions of jobs to be lost and damage it will inflict to our economy.
For seven years Republicans have been promising to repeal and replace Obamacare. This was merely a pipe dream so long as President Obama remained in office. The election of Donald Trump gave them that opportunity and quickly revealed that Republicans had no clue how to do it. After more than fifty House votes to repeal Obamacare, the Republicans made it plain that repealing Obamacare was simply about repealing Obama, whose election was anathema to much of their base.
As Republicans try to explain away how taking away health coverage from over 20 million Americans is a good thing, nobody is talking about its impact on jobs. MarketWatch called the House repeal proposal “the greatest threats to jobs in U.S. since the Great Recession,” as an analysis by the Commonwealth Fund and the Milken Institute of Public Health at George Washington University, concluded that the House-passed legislation would lead to a loss of approximately 925,000 jobs. Other analyses pegged the job loss from repeal at over three million jobs. In addition, Federal Reserve Chair Yellen has warned that loss of access to affordable health coverage could impact the economy by causing a shift in consumer spending away from discretionary goods and services and towards healthcare.
Yet Trump and Republicans are pushing for a vote without any hearings or deliberations to address the risk that Trumpcare is an expressway to unemployment.
Net Neutrality Nuttery
Despite having broad bipartisan support among voters, Republicans in Washington continue to have an ideological knee-jerk opposition to President Obama’s net neutrality regulations. As I outlined more fully recently, net neutrality is about ensuring a free and open internet whereby internet providers cannot discriminate against programs or applications selected by consumers or censor their communications.
President Trump’s Federal Communications Commission Chair Ajit Pai is pushing through a repeal of Net Neutrality that would enable Comcast and others to favor their applications over others, erect toll booths to charge for priority access and block content it does not like. Pai’s proposal would stifle innovation, lead to greater economic concentration and increased costs to consumers.
Trump’s Betamax Energy Policy
Despite the near universal consensus view that climate change is real and caused by human activity as expressed by the National Science Foundation and similar foundations worldwide, Trump and the Republicans continue to be climate change deniers. Even worse, the centerpiece of Trump’s energy agenda is the revival of coal and abandonment of alternative fuels. This is equivalent to trying to bring back Fotomats or Betamax video.
Clean energy jobs outnumber fossil fuel jobs by more than 2.5 to 1. The solar industry alone created jobs at 17 times the rate of the national economy and accounted for 1 in 50 new jobs created last year. Yet President Trump thinks renewable energy is a “bad investment”. He is gutting funding for renewable efforts to focus instead on revival of the coal industry that employs fewer workers than Arby’s Roast Beef.
Trump is clearly not listening to Gary Cohn, his top economic advisor, since he says that investing in coal does not “make that much sense anymore,” whereas investing in renewable energy could make the U.S. “a manufacturing powerhouse”.
The economic danger of ideologically driven policy is also evident in our immigration policy, where Trump has implemented a draconian travel ban and suspended an Obama program to provide visas to investors with over $250,000 in capital. The net result has been U.S. companies hiring instead in overseas offices, a reduction in foreign travel to the U.S., and a reduction in foreign students (who pay full tuition) applying to U.S. universities. All great news for Canada or other nations, but not for the U.S. economy.
This is what happens when you have a government led by amateurs driven by ideology and appeasing their base rather than developing policy based on sound analysis. Putting the economy in the hands of a President with zero political experience, who does not read briefings and has already sought bankruptcy protection six times, is more likely to lead to an economic nightmare. Trump will not Make America Great Again, but he might Make Recessions Great Again.