2016-- A Year of Discontinuity

If there is one word that summarizes 2016, it’s discontinuity and rejection of political correctness.  It was a year in which the most improbable became reality.  Great Britain voted itself out of the EU Club, a nonpolitician won the U.S. presidency, and the Cubs won the World Series.   The odds against all three occurring were long indeed.

Politics

The world order and, indeed, traditional political alignments in the entire Western world are being reordered in the most significant way since the end of WWII.  In both Great Britain and the United States, the political system voiced dissatisfaction and voted with their feet.    Great Britain voted to affirm its sovereignty and exit the EU.  In America, voters rejected both the Democratic Party and the Republican Establishment and elected a populist that defied both.   As the sun sets on the Obama administration, it is unclear exactly where all this will end, but it’s clear that voters were willing to gamble on a change.   Who would have thought that a Republican that asserted that Bush lied, was protectionist and advocated a $1 trillion infrastructure spending package could not only get the nomination but defeat an incumbent party in the midst of an economic recovery with unemployment below 5% and who was solidly backed by the MSM?  For the second time, Hillary Clinton failed to defeat an opponent with NO executive experience.   This time, she failed to defeat an opponent that didn’t even have the solid backing of his party.   I assert that Trump and Brexit are two sides of the same coin.  Both represent a desire to push back against a faceless, unaccountable bureaucracy and a desire to reassert nationhood.  Both Great Britain and the United States have a great national identity and culture and a belief that they hold special place in the world.   A nation is composed  of three basic pillars:  language, culture and borders.   The Brits saw the EU attempting to erode those pillars and Barack Obama and the liberals tried the same here in various ways.    An aspect of this reassertion is the Muslim refugee problem.  As Americans and Brits saw Muslim refugees overwhelm Europe and the ever present threat of Islamic terrorism (which both Angela Merkel and Barack Obama downplayed), voters called a time out.  Trump and Brexit were also reactions to an increasingly undemocratic political process where decisions were being imposed more and more without the consent of the governed (Obama with his pen and phone and regulatory agencies; the EU Commission).  Voters decided that they had had enough.  The consequences of both are hard to ascertain, but they mean change.

Economy

While the economy continued to grow and finally kicked up past 3% for the first time in Obama’s tenure as a result of revised figures.  This recovery is seven years old and one of the longest on record, yet it’s hard to find many people that think of this period as salad days.  Most Americans have lost ground during this expansion.  Increased taxes and health insurance costs suffocated many families financially.  Many industries are drowning in regulations.  Many businesspeople I talk to liken this era as “like trying to swim in peanut butter,” and conversely, one businessperson said of Trump’s election, “I feel like somebody took a plastic bag off my head—for the first time I feel like I can breathe.”  Hillary Clinton promised more of the same—more regulations, higher taxes, and much bigger estate tax, and because of the pressure put on by Bernie Sanders, gave up on free trade.   And despite Paul Krugman’s dire warnings that the stock market “may never recover,” the market has boomed since the election, despite an increase in interest rates.   

Trump is considering appointing Larry Kudlow, an old Reaganite to the post of Chairman of the Council of Economic Advisors.  That would be a real plus.  Kudlow understands the incentives created and distorted by excessive taxation and regulation and could be a real force in getting Trump to moderate his protectionist inclinations.  Despite the accelerating growth, our economy has some real headwinds—the damage done by the ACA and other regulations as under Dodd Frank, rising interest rates, a strong dollar, low productivity, an aging workforce, student debt,  $10 trillion in debt and low household formation and labor participation rates.  Layered on top is a dysfunctional, bloated government that needs to go on a diet.   So far, Trump’s appointees have been solid, but Trump’s protectionism and his bullying tactics (as with Carrier) remain wild cards.

Foreign Affairs

Nowhere has the toxic blend of Obama’s narcissism and naivete become more dangerous and dreadful than on the foreign stage.  Just a few days before Christmas, Obama was still complaining about slavery and colonialism as if remedying those ills should be a priority guidepost for today’s foreign policy.  His worldview of Western Civilization as an evil to be contained has turned the world completely upside down and we now have a foreign policy that embraces and does deals with sworn enemies like Cuba and Iran and kicks longtime allies like Israel.  Instead of being the lantern of liberty in the world, the Obama foreign policy apparatus has cozied up to antidemocratic regimes that have been hostile to “Western Imperialism.”   Obama has been silent on the world’s great humanitarian crisis—the collapse of Venezuela---largely, I believe, because Venezuela represents the logical endpoint of socialism. Perhaps my greatest contempt is reserved for U.N. Ambassador Samantha Power.  I read her entire treatise:  A Problem from Hell- America in the Age of Genocide in which she took the U.S. to task for not acting sooner as the genocides in places like Rwanda and Bosnia-Herzegovina unfolded.  Yet she has been nearly silent as ISIS perpetrated its genocide against Christians in the Middle East and Putin and Assad teamed up to wreak havoc in Syria, causing a humanitarian crisis not only in the Middle East but Europe which directly led to Brexit.   Power’s shameful tenure at the U.N. was capped off by the abstention of the U.S. vote that censured Israel.   With any luck, Samantha Power will soon be teaching political science at some inconsequential liberal arts college where the harm she inflicts on humanity will be minimized.   It will take the rest of my lifetime to reverse out some of the damage done to Western Civilization by the Obama administration.

Film.

There have been some interesting films this year and I admit there are some that I have yet to see.  But my favorite film is Manchester by the Sea.  Its authenticity is gripping.  Its drama, vivid but not overdone.   A close runner up was Moonlight—raw and intense, a film that tracks a boy growing up in the Miami ghetto, coming to terms with his identity.  Moonlight was an emotionally tough film, but one of the best of the year.   After dining on the Downton Abbey series for awhile, it was quite a change of pace to see films centered on working class whites and urban blacks---people with REAL problems to deal with.

Music

2016 was marked by losses rather than gains in 2016.  We lost some big names in 2016—Leonard Cohen, Prince and David Bowie and just a few days ago, George Michael.   My favorite live concert of the year was the performance done by the tribute band that does the season ending concert at Ravinia in Highland Park. In past years they have done the Beatles, Pink Floyd and Led Zeppelin.  This year was a tribute to David Bowie, which was wonderful on a warm September night.  They did all of his best songs—Space Oddity, Suffragette City,  Let’s Dance,  Young Americans, and Heroes.  It was a great event to recognize the talents of one of rock’s greatest innovators.   Another giant in music was recognized in 2016.  Bob Dylan was awarded the Nobel Prize in Literature.   While the award stirred up some controversy, I was supportive of it.   Dylan stood as a giant in the music world for decades and his was delighted to see him get the award even if the Nobel Committee had to stretch to get it to him.

Sports

In sports, obviously, the big story was the Cubs.  They broke their 108 year drought in Cubs style by scaring the hell out of us as they gave up a 6-3 lead, only to win it in 10 innings.  Although nominally a Sox fan, I was pleased as punch to see the lovable losers finally do it.  Now, I have lived to see all the major sports teams in Chicago win a championship in my lifetime—Bulls, White Sox, Bears, Blackhawks and the Cubs.  The most fun championship was the ’85 Bears—lots of personality and swagger-- and from the looks of things, Chicago may not see another Super Bowl champion in my lifetime.

Still, the Cubs victory was sweet and they should be competitive for years to come.

Books

There have been so many good books out this year…and so many that I haven’t yet gotten a chance to read.   But the two that I thought were can’t miss were Hillbilly Elegy by J.D. Vance and The Mandibles by Lionel Shriver.

In the nonfiction category, I thought Hillbilly Elegy was masterful.  Sincere, honest and without pretense, J.D. Vance turns the concept of “white privilege” on its head with his memoir of growing up working class white of Appalachian heritage.   I reviewed the book in my September 19 post, so I refer the reader to that post for more commentary, but I loved this book.

In the fiction category, I liked the The Mandibles by Lionel Shriver a great deal.  The book chronicles a family of at least some means that is trying to cope with a Venezuela-type collapse of the United States.  It is laced with humor, but its dystopian future has become all too realistic as U.S. debt rises, our economy seems to be stuck in neutral and spending seems out of control.   Shriver is a talented writer whose prior work, We Need to Talk About Kevin also received accolades.  Interestingly, Shriver found herself in the midst of a controversy as there appears to be a movement among writers of minority status to assert that nonminorities cannot and should not write their point of view in a novel with authenticity.  Shriver pushed back hard and responded, “Otherwise, all I could write about would be smart-alecky 59 year old, 5 foot- 2 inch white women from North Carolina.”

Good for you, Lionel.

Words and Phrases

It’s official.  Despite riots, threats, and recounts, the Electoral College cast its vote and Donald Trump will be our next president.  And he will have a Republican House and Senate.  How did this happen?

We know how powerful images can be and that they can shape public opinion and foreign policy decisions.  For instance, nothing captures the Vietnam War more than the iconic image of the naked girl running down the road fleeing as her village was being napalmed or the image of police chief general Nguyen Ngoc Loan just as he pulls the trigger and executes a Viet Cong prisoner at point blank range. But words and phrases can carry just as much power and be just as lasting as visual imagery.  They can  be just as determinative of political outcomes and how policies and results are perceived. 

Democrats are still in various stages of grief.   If you follow the 5 stages of grief set out by Elizabeth Kubler-Ross several decades ago, their reactions will be familiar to you.  It started out with anger as evidenced by the rioting in places like Portland and it has moved on to denial and sometimes bargaining.  They are blaming the Electoral College, Richard Comey,  the Russians, and as of late last week, Obama was blaming unfair media coverage of Hillary (cough, cough).   The Democrats had deep advantages.  The economy was putatively in recovery.  Nominal unemployment was below 5%.  Barack Obama’s approval rating was still above 50%.  Clinton had raised a lot of money and had 104 electoral votes in the bag (NY, CA and IL).  She was running against a candidate with very high negatives.  The MSM was in her corner, and Wikileaks demonstrated that the media actually collaborated with the Democrats on several occasions.  Much of the conservative base was at least wary of Trump, and most real conservatives eschewed him.  Yet, Democrats managed to squander all those advantages.

I believe it is the power of words and phrases that were used by the Obama administration that had a tremendous impact on the electorate.  I have faith that the American people are able to connect up the words and phrases with reality as they perceive it, and reconcile them with reality. 

Rather than do a traditional summary and evaluation of the Obama years, I thought it would be more appropriate to pick out the words and phrases that Obama (or his underlings) used that I believe were deadly to the Democrats.  Some of these may be more memorable than others, but they hold important clues as to why the Democrats lost the White House, failed to take the Senate, the House, and have control of only 15 state legislatures.

Here are the top 6 that I thought ultimately cost the Democrats control of the government.

11.      “…they get bitter, they cling to guns or religion or antipathy toward people who aren’t like them.”  This Obama quote early in his administration had a lot packed in one phrase and was a most concise attack on small town, traditional middle America.  Obama in a single phrase was able to level an attack on the 2^nd Amendment, the 1^st Amendment (freedom of religion), and categorized middle America as embittered and bigoted.  It was the precursor to the “Basket of Deplorables” and reinforced by  Hillary Clinton during the campaign.   Its message is that if you disagree with us, and have different values than we are espousing, you are a backwards throwback.   It reflected a sneering contemptuous attitude toward people that adhered to some basic tenets of life:  marrying someone of the opposite sex, staying married, going to church every Sunday raising your kids and wanting a job that pays a fair wage.  There doesn’t seem to be anything controversial about those things.  Worse, Obama jumps to the conclusion that these people are bigoted and intolerant.  No surprise then when middle America  decided that the Democratic party—traditionally the workingman’s party—had no room for them.

22.       “If you like your doctor, you can keep your doctor”
This catchphrase was used time and time again to peddle the Affordable Care Act.   It turned out to be horrendously false as the ACA unraveled, with insurance companies pulling out of exchanges, signups of young people way below projection and premiums soaring and deductibles skyrocketing.   Millions were forced to give up the networks they liked and the doctors they were comfortable with.  They phrase became a national joke.  It turned less than funny for Democrats on election day as premium notices went out just before the election.   The sticker shock for working people undoubtedly was a major factor in the election results.

33.       “ISIS is the J.V.,”   “ISIS is not Islamic,” “ISIS is contained.”
Every high school football and basketball coach in the country knows that it is folly to underestimate an adversary.  True, ISIS doesn’t represent an existential threat the way that the Soviet Union did (or Russia does now), but time and time again, ISIS proved to be resilient and capable of directly or indirectly committing heinous attacks and atrocities.  As Joshua Cooper  Ramo noted in his book  “The Seventh Sense,” ISIS was able to capitalize on the power of networks to wreak havoc.   Obama’s contention that ISIS is not Islamic has been countered by many commentators, most notably by Graeme Wood in his  March 2015 piece in the Atlantic, “What ISIS Really Wants.”  The failure of Obama’s ISIS strategy was irrefutably laid bare when he confidently announced that “ISIS is contained” the day before the Paris terrorist attack last fall.  Even an uneducated plebe from Wisconsin knew then and there that Obama had gotten the ISIS strategy terribly wrong.

44.       Leading from Behind.
      Leading from behind was the pithy little phrase probably designed to differentiate Democratic foreign policy from the Bush policy that led the invasion of Iraq.  I’m not sure they thought about it, but it sounded much like the counter to the pro-American swashbuckling George Patton quote, “Lead me, follow me, or get out of the way.”  This was defense by consensus but most people know that the wisdom of Yoda still prevails, “Either Do or Do Not.”   After carping at Bush for years over Iraq, Obama and Clinton did EXACTLY the same thing in Libya.  To be sure, they did it on the cheap, but they deposed a secular tyrant without a plan and created a culture dish for ISIS in Libya.  And the ultimate consequence was to lose 4 American lives including Ambassador Stevens at Benghazi.  America cannot lead from behind.  It need to lead.  Period.  There is no other nation willing or capable.  Aleppo is what happens when America hands that responsibility to another nation.

55.       Basket of Deplorables. 
This was the nail in the coffin of the Democrats.  Their contempt and misjudgment over the electorate was on full display with the use of this phrase by Hillary.  Many voters were uncomfortable with  Donald Trump, yet recoiled at being labeled “deplorable” because they dared to differ with Democrats on such issues as the size of government, America’s role in the world, or marriage equality.  Trump seized on the phrase immediately and had an image from Les Miserables as a backdrop for his campaign with the words “Les Deplorables” across it.  It was a fatal error for Clinton.

66.       I’ve got a pen and I’ve got a phone.  This phrase belied Obama’s contempt for the legislative process and his desire to issue edicts like any Latin American  tin pot dictator.  Obama acted as if Congress had spontaneously sprouted up instead of being elected by the people.  However obstinate and obstructionist he may thought them to be, they were the duly elected representatives of the people and he had to deal with them.  But he chose not to and simply issued executive orders whenever and wherever he could, and courts rebuked him often and on important matters such as environmental laws, immigration enforcement and NLRB appointments.  Even more galling was the fact that he negotiated a deal with Iran (arguably a treaty subject to Senate approval, yet could not reach deals with his own countrymen.  Even the liberal leaning New York Times ran a front page article expressing discomfort with Obama’s growing comfort in circumventing Congress and ruling by decree. 

There were other runner ups: 

 “Christians shouldn’t get on their high horse over Islamic extremism” (Barack Obama) 
As if events a millennium ago have any bearing on the current problem of Islamic terrorism.

“We can’t kill our way out of this problem.  We need to go after the root causes that leads people to join these groups, whether it’s a lack of opportunity for jobs..”  (Marie Harf)
The much derided sorority sister of foreign policy set forth her infamous ‘jobs for jihadis’ position.  She was ridiculed so heavily for this remark, she disappeared from public view within weeks and has not been heard from since.

 “The most effective way to combat terrorism is with love.” (Loretta Lynch)
ISIS leaders and Hezbollah are still giggling about this one.

“I do think, at a certain point, you’ve made enough money.” (Barack Obama)
Another swipe at capitalism and free markets.  The alternative is to hand it over to government, right?

“If you’ve got a business, you didn’t build that.  Somebody else made that happen.” (Barack Obama)
This was an echo of a comment by Elizabeth Warren.  Every entrepreneur in the country that worked 18 hour days turned purple with rage over this one. 

“I think when you spread the wealth around, it’s good for everybody.” (Barack Obama)
Apparently, he believes this regardless of how hard you work or how much risk you are willing to take.

 “If I had a son, he’d look like Trayvon.”  And  “The Cambridge police acted stupidly.” (Barack Obama)
These were the lead-ins to the war on police that lead to the spike in deaths of police officers, including the assassination of police in Dallas and Baton Rouge.  Obama’s willingness to jump to conclusions about the nation’s law enforcement officers and subsequent “soft strike” has lead to the spike in officer deaths and violent crime in urban areas that has been trending down for decades.

“We’re going to put a lot of coal companies and coal miners out of business.” (Hillary Clinton) 
Hillary’s willingness to sweep working people aside in her zeal to have a government directed economy proved costly to the Democrats.

“Don’t let anybody tell you that it’s corporations and businesses that create jobs.” (Hillary Clinton)
This is the corollary to the “you didn’t build that” comment.

“He [Bowie Bergdahl] served with honor and distinction.” (Susan Rice)
This was shown to be patently false as Obama sought to justify his trade of Gitmo prisoners for this deserter. Bergdahl will be court-martialed. This comment along with her assertion that the filmmaker was responsible for the attacks on Benghazi assures us that Rice will finish out her ignominious career as an obscure lecturer at some left leaning university. 

“The future must not belong to those who slander the prophet of Islam.” (Barack Obama)
This was asserted in his Cairo speech, the most important of Obama’s apology tour.  The problem with this statement is that it lays the foundation for making blasphemy and “hate speech” a crime.  The Netherlands just did exactly that by prosecuting Geert Wilders.  America holds nothing sacred.   We thought “The Life of Brian” was hilarious.  “The Book of Mormon” sold out.   We poke fun at televangelists.   “Old Jews Telling Jokes” is having a great run.  Islam doesn’t get a special exemption from the First Amendment.

More than the Electoral College, the FBI investigation into Hillary’s server, fake news, the leaked emails by Wikileaks, or any of the other assorted excuses for their losses at the ballot boxes, these words and phrases resonated with people as much as images and the electorate understood that they were either falsehoods or inconsistent with their values and beliefs.  If you read all of these statements, you can see why Democrats have a lot of work to do.

The Authentic, the Sweet and the Intense

As the year closes, the election has concluded (we think)  and the weather turns cold, I have had more opportunities to see more films and there are three currently playing in theaters that I highly recommend.   All three wrestle with fundamental human experience in a very direct and raw way.  Two of them use humor very appropriately to cushion some of the hard drama that the characters are experiencing.  Here are three brief capsules and why you should see them.   The main character in each film captures life crises at different stages of life:  A Man Called Ove at the end of life, Manchester by the Sea at midlife, and Moonlight is a coming of age story.

Manchester by the Sea

Ken Lonergan’s film starring Casey Affleck, Lucas Hedges, and Kyle Chandler (of the TV series Friday Night Lights) captivated me entirely.   I confess that after hearing Lonergan’s interview with Terry Gross on NPR’s Fresh Air, I was compelled to see it.  One word captures this film—authentic.  From the cold, dreary New England harbor scenery to the blue collar Irish pub to the family interactions, it has all the feel and language of a working class family enmeshed in drama.  Lonergan opens the film with Lee Chandler’s (Affleck) quotidian existence—as an apartment maintenance man, fixing leaks, repairing shower heads, and unplugging toilets in a frank and businesslike way.  Having suffered one tragedy, his life gets upended again when his brother dies and he is left to become the guardian of his 15 year old nephew, played by Lucas Hedges.  Hedges does a wonderful job of playing a typical teenage boy experiencing his typical teenage boy life—self-centered, and focused on girls, sports and his band.  He fiercely tries to hold on to his life while simultaneously processes the loss of his father, who was a single dad because of the mother’s substance abuse problems.  Despite the terrible sadness that pervades the film, there is humor sprinkled in as Affleck adapts to his new role as a surrogate father and Hedges adapts to him.  Lonergan masterfully portrays these very ordinary human beings as they struggle with the aftermath of human tragedies.  Yet he does not permit the dramatic to devolve into the melodramatic.  His attention to detail makes Manchester by the Sea the most authentic film I’ve seen since Saving Private Ryan.

A Man Called Ove

A Man Called Ove is a delightful Swedish film, which, like Manchester by the Sea weaves comical scenes throughout a film that, like Manchester by the Sea,  is centered around loss.   It is a in a film that confronts the theme of aging and purpose.  Ove is the main character who lives in a little housing cooperative.  On the surface, he is an old crank, the self-appointed enforcer who polices the homeowers association regulations in a most imperious and obnoxious way.  We warm to him and empathize with him as we learn that he has recently lost his adorable, vivacious wife to cancer. He then loses his job at the company that employed both he and his father at one time.  His personal despair finally deepens to the point where he makes several  suicide attempts.  A young couple moves in next door, however, and he helps them integrate into the neighborhood sometimes funny results, and we see that underneath the surface of this grumpy old guy is a man with a heart of gold that he keeps well hidden.   Every time he gets close to doing himself in, the doorbell rings with someone that needs his help for something.   Before our eyes, the incorrigible old crank turns into an endearing character and he finds purpose in the life he has left in helping others.  A Man Called Ove is a redemptive, sweet little film that should not be missed.

Moonlight

Moonlight is a film that has received critical acclaim and follows the maturation of the main character, Chiron through three distinct phases of his life in black inner city Miami, growing up in a fatherless home with a drug addicted mother.   Although played by three separate actors through these separate phases of his life, the acting is good enough that it is seamless – sort of like an inner city version of Boyhood.  Chiron is an outsider in both grade school and high school as his peers detect his gay inclinations early.   Partially as a consequence of his sexual orientation, the neglect by his mother gets magnified and he is abused and bullied mercilessly by his peers throughout his youth.  Moonlight is sometimes an uncomfortable film to watch as you see this boy struggle with a harsh family and social life, his sexuality, and his separateness and loneliness, and his attempt to be his authentic self.   The film reaffirmed my theory that there is often a person that fits with you like a lock and key and that fit doesn't diminish over time.  Unlike A Man Called Ove and Manchester by the Sea, there is no comic relief in this film.  It is a must see but I would wait until the holidays are over.

Manchester by the Sea was my favorite among these films, but all three have something profound to say about the human experience.  

Pivoting East

In my last post, I took Donald Trump to task for his ham fisted and Chavez-like method of keeping companies in the states.   Trump went well being the usual tax incentives to try to prevent companies from offshoring and resorted to threats, promising a 35% tax on goods made by U.S. companies that relocate their operations elsewhere and ship goods back into the U.S.  This is the kind of coercive government that many conservatives feared and exhibited the worst side of Trump.

While we commemorate the 75^th anniversary of Japan’s sneak attack on the U.S., we are once again faced with challenges from the East.  Under the Obama administration, they were allowed to fester and worsen.   Trump’s opening moves on the domestic  front are open to criticism but on the foreign policy side, Trump executed a brilliant move.  By taking the congratulatory phone call of Tsai Ing-Wen, duly elected president of Taiwan, Trump accomplished several objectives with one single blow.  It was perfectly calibrated and proportional. 

First, it was a bold signal to China that the U.S. is no longer willing to play patsy to them.  China has continued to manipulate its currency and thereby drain manufacturing from the U.S.  While North Korea has continued to develop its nuclear and ballistic missile programs that now threaten our allies and perhaps our west coast, China has done little to curtail North Korea’s nuclear ambitions, even though it is in a position to exert leverage over them.  China regularly pilfers our intellectual property.  More ominously, it has asserted itself militarily be building islands and bases in the South China Sea.  It was almost certainly behind the cybertheft of the personnel records at OPM last year.  Our response on each of these fronts was muted.  It was reported that the navy had to beg Obama to challenge free navigation of the seas around the islands constructed by China.  And if there was any response at all to the OPM hack (which included individuals with top level security clearance), we didn’t hear about it. 

Second, it was a signal that the U.S. is back in the business of supporting free peoples.  Under the Obama administration, the Green Revolution was quickly and violently snuffed out by the thugs in Iran while Obama stood silent.   Obama granted Cuba huge unilateral concessions and recognition even though it vowed it would not change and Cuban dissidents were not invited to the opening ceremony marking the restoration of diplomatic ties.  In his most recent South American tour, he told the not Argentinians not to get stuck on any particular ideology, but go with “whatever works,” begging the question of “for whom does it work?”  We have given the cold shoulder to the only functioning democracy in the Middle East and the Obama administration was even discovered to have supported Netanyahu’s opposition.  After eight years of abandonment, taking the call from Taiwan was a powerful message that the U.S. is once again prepared to stand with free peoples.

Third, it was a negotiating lever.  With Cuba, Russia and Iran, Obama had a bad habit of granting unilateral concessions in the false hope that it would buy him something.  We opened an embassy and took Cuba off the list of sponsors of terror.  We unilaterally withdrew our planned anti-missile defense system from Poland and the Czech Republic and got nothing for it.  We chased the mullahs around like love struck teenagers and permitted them to self report compliance (no anytime, anywhere inspections) and promised to help them defend their nuclear program.  The call with Taiwan messaged to China and the rest of the world that the U.S. is no longer negotiating from a position of weakness and is willing to be assertive once again in staking out our position.

Obama promised to pivot East in his foreign policy.  This is what pivoting East looks like.

Coercive Capitalism

Rather than looking hard in the mirror for answers as to why the November election turned out to be such a catastrophe, most Democrats are indulging themselves in a practice most of our parents tried to shake out of us by second grade:  blaming others.  Despite a president with solid favorability ratings, a growing economy, and a relatively low unemployment rate, the Democrats managed to lose the White House, failed to take the Senate or the House, and control only 15 state houses.  While they try to console themselves with Hillary’s popular vote margin, the fact is that Republicans ran the table on them and Hillary lost (once again) to someone with no executive experience in government.  You would think that would cause them to ask some hard questions about what they might do differently, but they immediately re-upped aged Nancy Pelosi as their house leader and variously blamed white nationalism, Fox news, and the electoral college. 

Meanwhile, how is Trump doing in the transition?   Some good.  Some bad.  Much still to come.

First, the bad (I will deal with the good in a subsequent post).  I side with Larry Summers on the Carrier deal.   Yes, I agree that government should do more to promote job generation in the US.  But mostly, that can be accomplished by simply getting out of the way.  We have had eight full years of veritable assault on business from every direction—increase in taxes, regulatory assaults from the EPA, OSHA, DOL, a real crunch through Dodd Frank and the CFPB, and of course, the extraordinary costs and disruption layered on business through the ACA.   Business deaths outnumbered births and in particular, young people were eschewing entrepreneurship.  The Obama Administration routinely demonized business, and singled out certain out of favor  industries for termination through regulations—coal, payday lenders and vapor cigarettes, for instance.  Others were forced to consolidate --- with a resulting death of jobs--- because of the regulatory burden.   Community banking (a lifeblood of small business) was particularly hard hit by the new and onerous regulatory scheme.

I’m wholly supportive of Donald Trump’s efforts to create an environment that is conducive to job creation, especially in the inner cities and small town America, but the Carrier deal is not the route.  Most of the country is clapping and cheering over keeping 1,000 jobs in Indiana.  Even Charles Payne, Fox Business commentator and avowed capitalist seemed exuberant and brushed aside concerns about how this deal went down.  I am not so sanguine.  Sure, states have been engaging in “bidding wars” with various tax abatements and incentives to attract and retain companies for a long time (my own Chicago White Sox are only here because owner Jerry Reinsdorf mounted a credible threat to move the franchise to Florida and squeezed financial incentives out of the city).  But Trump took this concept a step further.  First, this is the federal government, not a state or municipality.  Second, he coupled the $7 million of incentives with a threat—that any companies that move and then sell product back to the U.S. will be subject to “retribution or consequence.”  His announcement was eerily reminiscent of the tone of Hugo Chavez and he immediately went after another Indiana company, Rexnord when he caught wind that they were moving 300 jobs to Mexico. 

What’s wrong with this?  Several things, including precedence.  There is the moral hazard created by threatening to leave and getting government goodies that advantage you vis-à-vis your competitors. 

 There will be nothing to stop future presidents that are not as business friendly to single out companies they like for favors and companies they don’t like for punishment.  Obama has already done this, regulating some industries nearly out of existence and granting special favors to other “pets” (Solyndra is the poster child). Moreover, Trump needs to differentiate himself from Obama/Clinton.  After the Democrats lost Congress,  Obama governed largely through his “pen and phone” and regulatory bodies, unilaterally imposing  restrictions and rules and limiting the ability of companies to act.  Firms had to staff up in their compliance departments- sometimes expanding them by two or three times to keep up with the bevy of regulations. Often, small businesses gave up and sold themselves to larger competitors that had enough scale to deal with the avalanche.  Hillary Clinton promised  more of the same.   

But is Trump really different?  Yes, there were financially inducements, but there were warnings and bullying.  And bullying is bullying, whether it is done by Obama for one purpose or Trump for another.  Instead, Trump needs to focus on creating a tax and regulatory environment that is less hostile toward business and employment creation, mostly through the legislative process.  Yes, I’m glad that jobs are staying in Indiana, but Sarah Palin has it mostly right--deals like Carrier tilt the tables, and threaten to become the worst combination of crony capitalism and coercive capitalism. Government's job is to create an environment that makes companies happy to stay, not bludgeon them if they choose otherwise.