Reflections on a Tumultuous 2017
President Donald Trump’s first year is nearly in the history books. It is unclear whether he will complete his four-year term due to the Russia probe, which might lead to his impeachment. While there is a lot of circumstantial evidence, there is as yet no smoking gun on the President’s involvement in his campaign’s apparent relationship with the Russian efforts to sway the American electorate against Hillary Clinton.
Let’s keep our eye on the ball, which are the 2018 mid term elections in the House and the Senate.
The economic recovery birthed by President Obama has yet to be derailed by President Trump, and he is now taking full credit for the growth engendered by his predecessor’s sound policies. His recently passed tax cuts and deregulatory efforts will stimulate, but might overheat the economy, now into its ninth year of recovery. There is still plenty of slack in domestic manufacturing and consumption, and many people are still hurting in some rural regions and central cities. We must avoid a speculative bubble at all costs.
Tax reform is urgently needed; this, however, was not what Congress passed. The recently enacted tax cuts are weighted to the biggest Republican donors and their lobbyists. They don’t create the right incentives for the productivity improvements that are the enduring foundations of long term economic growth. They will further exacerbate income inequality. The Administration’s deregulatory efforts have been far too much focused on propping up sunset industries (like coal) and insufficiently attentive to the growth needs of sunrise industries that can create sustainable job and income growth.
Trump’s anti-immigrant and anti free trade policies are likely to do long term damage to American competitiveness and deprive our country of a young highly productive workforce. They are already doing damage to our long-standing relationships with trading partners in Asia, Europe, and Latin America.
Trump’s divisive rhetoric and tweets are shoring up his hard right base and alienating possibly irreparably the rest of the country. He may be recasting the Republican party as a nativist, racist and old boy reactionary party filled with yearning for their salad days and lacking any coherent vision on the important issues for America’s future. This is no longer the party for young, striving entrepreneurs, but rather of an old, confused kleptocrat and his coterie. Republican members of Congress are retiring in droves rather than push back against the President for their own values and visions for the GOP.
So what are the competing Democratic visions? In many ways I think they are still caught up in the visions and policies of ex Presidents Clinton and Obama, but what is really needed is more akin to the times of Presidents Kennedy and Johnson – a thoroughgoing revitalization of the nation. There is a rot in our basic institutions that needs to be addressed. This includes elections, tax policy, education, health, income distribution, immigration reforms, public sector performance and accountability reforms, progress for the forgotten Americans, infrastructure and a future looking economic policy. We need political leaders with a vision and courage to match our nation’s very real challenges.
Prepared by: Lucien Wulsin