12/01/2018 No. 136
 
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Does Trump Have a Strategy to Run the US? Yes, But...
Mainstream and Organic Views
By Ifay Chang
October 1, 2018


Donald Trump was an unusual Presidential candidate. His campaign style was unusual, combative, rude, impromptu and rash in presentation. His tweets were also unusual, but he was successful in getting millions of followers and created a new political fad, now adopted by many politicians. He was not eloquent in speeches with his limited vocabulary, but he was persistent in his claims, attacks and promises even without evidential data while being challenged by the media. His ability to occupy the media limelight by attacking the media was another unusual political phenomenon which never occurred before. He was able to cast almost all his opposing and negative media reports into one disposal – ‘fake news’– amazingly, it worked.

 

Donald Trump surprised the media and the nation in winning the 45th US Presidency. He surrounded himself in the cabinet and White House with new faces leaning towards the right wing, hawkish and supportive of his ‘America First’ political slogan. Not everyone adjusted well in his new Administration. Trump was not shy in blaming his subordinates for blunders or crises, whether they were created by them or by himself. One thing which has become clear is that Trump is determined to deliver his campaign promises as his way of proving his worth to the elected presidency. On the issues raised during his presidential campaign, such as immigration, military revamping, job creation, trade imbalance, infrastructure as well as general economy, he has focused on fulfilling his promises during his term.

 

Taking immigration, he was serious about building a wall along the US-Mexico border. He was also harsh in dealing with illegal immigrants, demanding deportation and even mercilessly causing separation of children from their parents. He is pressuring Mexico to pay for the wall by saying “one way or the other Mexico will pay for the wall”. Trump’s immigration policy is to stop the illegals from consuming the US social welfare dollars, to build a wall to stop the inflow of illegal immigrants and to avoid drug smuggling into the US draining the US economy – there is conceptually nothing wrong with these goals. President Trump’s desire to expand the military was a core promise during his presidential campaign. However, his proposed $54B increase in the military budget raised concerns about federal budget cuts on non-military spending. He encouraged updating US Navy and Air Force military power but demanded more frugal budgets on weapon development from military suppliers – a balance sheet approach. Under the Trump Administration, the US sold more military weapons than in previous years, enriching the military industry complex, which is good for winning campaign donations and votes but has little to do with long term national defense planning or world security.

 

President Trump had proposed tax cuts to induce American corporations to move their manufacturing facilities back home to create jobs, but no coherent policy was announced to make that happen. Trump’s solution for job creation is also bottom-line thinking. He hopes to induce corporations to bring headquarters and factories back to the US simply by cutting taxes but without tackling the problem of skill obsolescence – a fundamental education issue. He decided to initiate a trade war to reduce trade imbalances with US trading partners without a clear road map to hit homeruns. Thus, we see Harley Davidson announcing the move of manufacturing to Europe, citing the impact of a 25% tariff on steel imports. Tesla, valuing the potential China market for electric cars, is making plans to establish a manufacturing factory in Shanghai’s free trade zone. Trump wants to levy tariffs on imports, a simple balance sheet approach, to balance trade, but without careful analysis of the impact on the full national and global economies.

 

Trump claims: “for too long, US lawmakers have invested in infrastructure inefficiently”, ignoring critical needs, and resulting in deterioration. Therefore, the United States has fallen behind other countries. Trump wants to give Americans the working, modern infrastructure they deserve, but his plan of creating a $1.5 trillion program for infrastructure repair and upgrade hinges on leveraging $200B in federal funds for five to one State and local government funding – simply a transfer of burden. The infrastructure burden has been shifting to the State and local governments for decades, however, most local governments on deficit budgets are unable to upgrade their infrastructure. So, shifting the burden off the federal balance sheet is too simplistic to wish away the deteriorating national infrastructure. Without understanding what resources are needed, what magnitude of the budget is required, what priorities must be set up in a coordinated national plan executed in a timely fashion, how local governments can fix the infrastructure problem – it seems impossible.

 

After the the housing-loan bubble in 2008, the US general economy has slowly recovered and been stable with the stock market showing a healthy pulse. However, all this can burst like a balloon again, if Trump’s trade war would bring down the US GDP by one half or one percent, as some economists have warned. In the main stream media, the anti-Trump sentiment is running feverishly high, although Trump seems to be able to hold his core supporters together sustaining his approval rating. What troubles the public including his supporters is that he has not laid out a clear blue print to make America Great other than repeating his ‘America First’ campaign slogan and ‘money-driven agenda’.

 

The trillion dollar question is whether Trump has a strategy and a secret plan for governing the US domestic issues and foreign affairs. The media does not believe he does and thus constantly bashes him in a bad light. But in all fairness, based on his track record in office for the past nineteen months, I will say that President Trump had been very active in taking initiatives. Analyzing what he has done so far, I am willing to say that Trump does have a strategy. His strategy is a ‘money-driven agenda’ to bring money to the US treasury. He wants others to pay for the US spending, demanding NATO and US allies to increase their defense budgets, selling more arms worldwide and squeezing defense contractors, all based on a businessman’s simple balance sheet mentality with little security analysis. In Trump’s business mind, a positive cash flow and bottom line on the balance sheet represents success. With more money and a better fiscal state, the US can better manage her national and international affairs – there is nothing wrong with that concept.

 

However, this kind of money-driven balance sheet approach to deal with the US domestic and international issues is very much like using an abacus to solve a complex economic problem which can hardly be characterized by a differential equation. We expect that the Trump ‘money’ strategy will run into more problems than providing solutions in the long run. Take the trade policy or tariff war alone: many analysts have questioned its wisdom; some call it a poker player’s bluff of which the US cannot afford the consequences. The US cannot solve the trade issue using bluffs. God has dealt the US very rich resources. The heart of the US economic problem is productivity, work ethics, as well as effective education and economic development policies. The trade imbalance was a result of trades made between willing partners. Trump’s tariff threats may get trading partners to negotiate faster, but the Trump Administration must have a deal in mind with every trade partner and must be prepared if a deal goes sour.

 

Trump’s deal with EU President Jean-Claude Juncker made on 7-25-2018 is a reasonable outcome. But asking China to give up her ‘made in China 2025 plan’ and deny her market value to attract capital and technology investment seems to be no deal and an unfair proposal. Based on the tariffs already enacted by the Trump Administration (and the total impact by escalated retaliation), the consequence may be a reduction of long-term US GDP by 0.06% (0.47%), wages 0.04% (0.33%) and full-time jobs 48,585 (364,786). (Erica York and Kyle Pomerleau, Tracking the Economic Impact of US Tariffs and Retaliation Actions, Tax Foundation 6-22-2018 updated 7-20-2018.) A Wharton Budget Model even predicted a reduction of GDP by 0.9% and wages by 1.1% by 2027. Trump must realize that a ‘money-driven’ strategy is not adequate and that a more in-depth analysis with fair assumptions must be made to support a government policy.

 

Ifay Chang, Ph.D. 張一飛

Producer/Host, Weekly TV Community Education - Scrammble Game Show, Columnist, Dr. Wordman & Director, US-Chinaforum.org

Trustee, Somers Central School District, 

Recent Books Published

New World Order - The Bipolar View

ISBN 13 9781981506941  (2018 pp300)

Two Lovely Space Stories (2017 pp183)

ISBN 13 978154461655

Changing Giants The US and China 

ISBN-13 9780977159451 (2017 pp340)

Understanding the US and China 

ISBN-13 9780977159444 (2016 pp300)

US-China Relations

ISBN-13 9780977159420 (2015 pp281)

Facebook.com/ifaychang Websites: 

http://www.tlcis.us ipo2u.com+10Twitter: ifaychang@drwordman.com, DrWordman@scrammble.com

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Ifay Chang. Ph.D.; Producer/Host, Community Education - Scrammble Game Show, Weekly TV; Columnist, www.us-chinaforum.org - Dr. Wordman; Trustee, Somers Central School District, President, Somers Republican Club; New Book, 4-25-2015, US-China Relations, Mainstream and Organic Views; Facebook.com/ifaychang Websites: www.tlcis.us; Twitter: ifaychang@drwordman.com, Dr. Wordman@scrammble.com; http://www.amazon.com/U-S-China-Relations-Mainstream-Organic/dp/0977159426;
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