President Trump could trip up, but not for the reasons liberals think
Niall Ferguson says Trump may want to do what Reagan did for America in the 1980s, but he faces several daunting stumbling blocks: fickle voters, frosty ties with his fellow Republicans, and a China on the rise
US President Donald Trump’s favourite Twitter hashtag is #MAGA, which of course stands for “Make America Great Again”. His critics often complain that this implies the US is not great now, whereas in fact it is much better than ever in terms of such crucial metrics as the number of community organisers in Chicago, the model shooting-range – sorry, city – of the Obama years.
But Trump’s supporters know just what he means: Make It the 1980s Again. For those in the older age groups who broke decisively for the Republicans in November, this is one last chance to turn the clock back to when they and their country were in their prime.
Watch: Donald Trump’s inaugural address
Both men painted a picture of economic stagnation. Where Trump spoke of “rusted out factories scattered like tombstones across the landscape”, Reagan lamented “idle industries … unemployment, human misery, and personal indignity”. Both made clear that the time was up for malaise. “This American carnage stops right here, and stops right now,” said Trump. “Let there be no misunderstanding,” declared Reagan. “We are going to begin to act, beginning today.”
Both men put some of the blame for the nation’s troubles on the federal government. “Politicians prospered but the jobs left and the factories closed,” said Trump. Thirty-six years ago, Reagan’s most famous line was: “Government is not the solution to our problem; government is the problem.”
And both men identified themselves as populists. “What matters is not which party controls the government,” said Trump on Friday, “but whether government is controlled by the people.” Reagan used similar language: “Our concern must be for a special interest group that has been too long neglected … ‘We the people’.”
Likening Trump to Reagan is a dangerous thing to do. But my point is not that they are the same, as will become clear. It’s just that their circumstances are similar. The Left despised Reagan as they despise Trump. Both men had become famous on the screen before entering politics. Both succeeded a Democrat who was seen as weak on foreign policy.
It’s not accidental that Trump has talked about a summit meeting with Russian President Vladimir Putin, perhaps in Iceland. Reykjavik was the scene of the most famous of the meetings between Reagan and Soviet leader Mikhail Gorbachev, in 1986.
Watch: Ronald Reagan’s “Morning in America” ad
Yet this is not “morning again in America”, as Reagan’s famous 1984 television ad put it. In Trump’s America, it feels more like twilight – the twilight of the era of economic globalisation that the Reagan administration kicked off. For the most striking feature of Trump’s inaugural address was its overt protectionism. “Protection will lead to great prosperity and strength,” said Trump, once again using the 1930s isolationist slogan: “America First”. His administration would apply “two simple rules: Buy American and hire American”.
Trump blamed globalisation, not government, for America’s economic ills. By contrast, Reagan saw free trade as part of the solution. While Trump promises a programme of infrastructure investment, Reagan slammed high taxation and deficits.
So here we are. Trump is president. He’s given the speech. Now comes the tricky bit.
Like all presidents, Trump will be judged by how far he makes good on his pledges. In one of his debates with Hillary Clinton, he talked of raising the US growth rate “from 1 per cent up to 4 per cent” and perhaps to “5 per cent or 6 per cent”. He intends to achieve this not only through protectionism but also through tax reform and deregulation, though neither was mentioned on Friday.
On foreign policy, Trump is an avowed realist who asserts “the right of all nations to put their own interests first”, and has no intention of imposing the American way of life on anyone. The sole exception to this is his intention to “eradicate … radical Islamic terrorism … completely from the face of the Earth”.
It is important to distinguish between the real and the imaginary obstacles Trump now faces. In the latter category are the leftist hooligans who ran amok in Washington on Friday, the liberal journalists who insist that Hitler has come to power, and the Hollywood stars who can’t shut up about how triggered they feel. What these people fail to understand is that Trump is anti-fragile in relation to their attacks: they make him stronger.
The real obstacles are as follows. First, voters – especially the independents and late deciders who voted for Trump on November 8 – are fickle. Polls show that the new president’s approval rating fell between his election and inauguration, which almost never happens. No president has entered the White House so unpopular.
Secondly, key Republicans, especially in the Senate, feel little loyalty to Trump. If the multiple investigations into Russian meddling in the election turn up compromising evidence, do not expect John McCain or Ted Cruz to shed tears at the prospect of Mike Pence following in the footsteps of Gerald Ford. And even if “Wettergate” goes away, Paul Ryan and Mitch McConnell will to a large extent control the direction of the Trump administration wherever legislation is required.
Thirdly, precisely because this not the 1980s, the economy may not deliver. The Federal Reserve expects growth to be between 1.9 and 2.3 per cent this year, and slightly worse next year. That’s roughly half Trump’s target.
Meanwhile, Congress may deliver tax cuts but no additional revenue, leading the deficit to balloon. The Fed may then tighten short-term rates, following the upward move we have already seen in the bond market.
Finally, there’s China. Back in 1981, the Chinese economy accounted for under 3 per cent of world output. Today it is around 18 per cent. “America First” has a good ring to it in a speech, but there is a whole library full of economic history which implies that protectionism could backfire badly.
With all due respect to British Prime Minister Theresa May’s argument for a “global” Brexit, the other big speech last week was Xi Jinping’s (習近平) defence of globalisation at Davos. “Pursuing protectionism is like locking oneself in a dark room,” said Xi. “While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war.”
The Art of the Deal was published by Trump in 1987. “My style of deal-making is quite simple and straightforward,” he wrote. “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.”
The artist of the deal is now getting acquainted with what could prove to be his two biggest foes. One is the political class of the Washington Beltway, personified by Frank Underwood, the anti-hero of House of Cards. “Proximity to power deludes some into thinking they wield it,” says Underwood in one episode. And: “The president is like a lone tree in an empty field: he leans whichever way the wind is blowing.”
Trump’s other big foe could be China. The Art of War was written by Sun Tzu 25 centuries before The Art of the Deal. “So it is said that if you know you enemies and know yourself, you will not be put at risk even in a hundred battles,” writes Sun Tzu. But “if you only know yourself, but not your opponent, you may win or may lose”.
No one should underestimate Trump. But MAGAlomania alone will not be enough if he underestimates his enemies.
Niall Ferguson is a senior fellow at the Hoover Institution, Stanford