Friday, June 28, 2019

Trump policy-making: a new version of 'Whack-a-mole'


Gordon L. Weil

"Whack-a-mole" is an old arcade game that's an exercise in futility.  It has come to mean that each time you try to solve a problem, another problem pops up.

In the original game, players would hit the mole on the head, forcing it back into its hole.  Another would pop up, and players had to move fast to hit each new one.  Satisfaction from whacking each mole did not last long.

Much American policy under President Trump is like playing Whack-a-mole.  In trying to fulfill his campaign promises, each problem Trump attacks seems to create another. 

Take China.  It pursues unfair trade policies and has a trade surplus with the U.S.  It also steals American trade secrets and forces U.S. companies to turn them over, if they want to do business in the huge Chinese market.

Trump whacked China by raising tariffs on its exports, a move reducing trade by making their goods more expensive.  He believes that will bring them to the bargaining table, where the U.S. can win concessions.

But higher tariffs raise prices for American consumers.  U.S. agriculture loses markets in China when it retaliates by increasing its own tariffs and buys elsewhere.  The trade deficit with China has grown a little worse, according to official statistics.

More moles.  Quit the Trans Pacific Partnership and lose allies opposing China and farm exports to Japan.  Meet with the North Korean leader without result, but boost his international standing.  Force a North American trade deal, creating hostility with neighbors. 

Taxes are too high, stifling economic development, Trump says.  They should be cut, notably for the middle class and for business, which will invest the money with the profits yielding offsetting tax revenues.  Smack that mole.

In 2017, the GOP lowered taxes on the biggest taxpayers, also supposedly the biggest investors.  It also allowed corporations to bring foreign profits home and cut the corporate tax rate.

But the tax bill's economic effect faded by 2019.  Corporations used added funds to buy back their stock and increase executive pay, with only a portion going into new productive capacity.  Federal debt grew faster than the promised new tax revenues.  That's the new mole.

Or immigration, Trump's signature issue.  He warned that Mexican gangsters and rapists were streaming into the U.S.  Building a wall, paid for by Mexico, would end the problem.  Meanwhile, separating immigrant families is stepped up, supposedly to serve as a deterrent.

But keeping his promise depended on Congress and Mexico, and neither agreed with him.  Immigrants arrived in even higher numbers.  They were not Mexicans, but mostly from Central America and Africa.  Instead of U.S. aid to slow the flow at the source, it was cut.  Americans were shocked by immigrant family separations. 

Undeterred, Trump promised to sweep up millions of undocumented immigrants and deport them.  But his immigration agencies were caught by surprise and were unready for the task.  The president backed off, saying he wouldn't carry out the threat if the Democrats agreed to his demands to change the immigration laws.

The mole: Iran.  The nuclear deal with Iran was unsatisfactory, because 15 years later Iran could choose to resume its production of nuclear fuel.  Also, the deal did not halt Iran's aggressive moves in the Middle East.

The U.S. withdrew from the deal and has put strong economic pressure on European participants to force them to stop buying Iranian oil.  No direct talks with Iran.

Iran announced that, if the U.S. stops its oil exports, it will restart nuclear fuel development that would have been forestalled under the deal.  The situation became more tense than it was under the now-rejected agreement, as both sides rattle their sabers.

When Iran shot down an American drone, which the U.S. says was over international waters, Trump readied a retaliatory strike, but then backed off.  He said the U.S. did not want to cause 150 deaths.  Is it possible the U.S. was not absolutely sure of the drone's location?

Trump has had some big successes.  He has set a new record in sustaining President Obama's economic recovery.  He has induced European countries to increase NATO-related spending.  He now has China's attention.

But he usually announces immediate solutions – Whack-a-mole – instead of traditionally less dramatic, incremental measures, creating new problems. 

Will the oncoming campaign and what he has learned as president lead Trump to cut back on playing the game?

In his recent immigration and Iran reversals, Trump may have begun to recognize that his sudden policy announcements raise new issues and don't finally settle matters.

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