Things look truly dismal for President Trump right now. His own congressional party did not overturn Obamacare. His immigration plan seems to have zero traction. His infrastructure proposals are also going nowhere.
Yes, there may be a tax reform bill, but according to some reports Republican congressional leaders are cutting him out of the deal. Not only has he not scored notable legislative victories, but he has also incurred embarrassing defeats, the worst of which was adopting a foolish Russia sanctions policy by veto-proof majorities of both Houses. Trump has also quarreled publicly with members of his own administration, including Attorney General Jeff Sessions.
Then there was Charlottesville. Although a majority of voters appear to think that Confederate monuments should stand (including a plurality of African-Americans polled), you would never know it from the media reaction to Trump’s comments on the subject. The firestorm over his remarks hastened the departure of Steve Bannon, an event that may trigger a revolt in Trump’s base.
Trump may eventually find himself in the cross-hairs of two groups: those who agree with him that “both sides” were to blame for Charlottesville (even if the Nazis and Klu Klux Klan were more so), and those who found his remarks incendiary. The numbers again are closer than the media appreciates.
It’s Even Worse than All That
Trump may try to regain ground by pivoting to foreign policy. But he is a novice in that area and relies heavily on the advice of those with more expertise. Unfortunately, the “experts” in military and foreign policy have been badly mistaken for decades, leading the country into a succession of blunders. Trump’s recent decision to prolong an unwinnable war in Afghanistan, now in its sixteenth year, is contrary to his position during the campaign, disappoints a war-weary nation, disillusions core supporters, and is probably contrary to his own sound instincts.
He holds out the prospect of victory in what looks like an unwinnable war, but offers no strategic clarity about what victory would consist of. Worse, some of Trump’s close advisors seem to be advocating a preventive war against North Korea. The consequences could be catastrophic, not only for Trump’s presidency, but for East Asia and the rest of the world.
Despite carrying enough baggage to sink a fleet of aircraft carriers, Democrats seem to have the momentum. This is so even if their charge of “Russia collusion” proves to be a hoax, as seems very possible at this point in the investigations. Minority Leader Nancy Pelosi plans to introduce a motion to censure Trump in the House—surely intended as a prelude to impeachment—and that motion may drive a wedge between House Republicans. A report in Barron’s newspaper says Democrats may retake Congress next year. Overall Trump seems weak, ineffective, and isolated. Is there no hope for him?
Pivot, Pivot, Triangulate!
There is indeed a ray of hope. The basic idea comes from Secretary of Commerce Wilbur Ross, one of the ablest and cleverest members of the Trump administration. Ross is a gentlemanly, softly spoken, 80-year-old billionaire, a graduate of both Yale and Harvard, who made his fortune building new companies after purchasing the assets of distressed ones. Like Steve Bannon, he has an insider’s view of the world of investment banking, having worked for Rothschild Inc. from 1976 to 2000.
In his business career, Ross showed a particular interest in the U.S. steel industry. He formed the International Steel Group out of the remnants of four steel companies, restarted idle mills, and sold out at a large profit. He has advocated that the Trump administration protect the domestic steel industry and the jobs of American steel workers. Obviously, like Bannon, Ross has a populist streak. Unlike many members of the Trump White House and administration, he seems to understand and sympathize with the concerns of the voters who put Trump in the White House.
Ross has just weighed in on tax reform. He’s pointedly argued that tax reform can be fitted into a Trump administration campaign against the country’s financial elites, such as the CEOs who resigned from one of Trump’s advisory councils last week, to the praise of The New York Times editorial board. Ross said, “We must drain the swamp of corporate tax lobbyists and the loopholes they create for special interests … We can no longer coddle the elite and let them hide smugly behind their K Street hired guns.”
Corporate Leaders Are Overdue for A Kneecapping
The “smugness” of our corporate elites was on display last week when a roster of corporate CEOs resigned from a presidential advisory council. Ever mindful of the force of flattery, The New York Times, the house organ of our cultural elites, praised the “moral voice of corporate America.” But it takes little courage in contemporary corporate America for a CEO to denounce neo-Nazis and the KKK. (That was not so true of our corporate leaders in the 1930s—see Brown Brothers Harriman, IBM, and Ford and GM.)
Rather than taking controversial moral positions, many corporate leaders seem more concerned with following the current trend, whatever it may be and wherever it may lead. Take Under Armour CEO Kevin Plank, one of those who resigned last week. Plank had praised Trump last February as a “real asset to the country.” But just a week later, faced with the threat of a boycott, he retreated, taking out a full-page ad in The Baltimore Sun in which to eat his words. Nonetheless, these second thoughts did not prevent him from remaining on Trump’s advisory council until last week. This is someone of rare moral courage? Or an amoral weathervane?
Trump should take Ross’ idea and run with it. Tax reform should become the preferred vehicle for exposing the smugness and hypocrisy of our corporate and moneyed elites. These elites are accustomed to lording it over the country’s political system and in many cases have bankrolled the Democratic Party and the Clinton machine. De facto if not consciously, they have also been the allies and enablers of the cultural elite that despises Trump and that has assiduously sought to overturn his election victory.
How Trump Should Do It
Barron’s magazine reported last week that Republican congressional leaders are framing their own tax reform plan independently of Trump. They are considering asking for Democratic help in enacting it. It goes without saying that a congressional GOP tax plan will include large tax cuts for those in the upper brackets.
But Trump should counter with an administration tax reform plan. It should sharply raise income taxes on the wealthiest, including (let’s say) all households with incomes over a quarter-million dollars. Trump should also propose to raise short-term capital gains taxes. And he should recommend imposing significant estate taxes on mega-fortunes. To the extent possible, these changes should be retroactive. The target of these reforms should explicitly be the top 1 percent in the nation’s wealth and income.
At the same time, the Trump plan should cut payroll taxes as much as possible. The benefits of the Trump tax package should fall to the middle and working class—the kind of people who carried Ohio, Pennsylvania, and Wisconsin for Trump. Trump’s presence may be unacceptable at the Kennedy Center, but he would still get a warm welcome at a NASCAR rally. He needs to remember that.
Having tabled his own proposals, Trump should then invite congressional Democrats to support his plan and reject the congressional GOP one. Can the Democrats say no? Of course they can—they have become the party of sheer obstruction and negativism. But it would be hard for them to explain to their constituents next year why they allowed a big tax cut for the wealthiest to become law while rejecting deep cuts in the payroll tax.
The Trump administration should also consider other tax reforms. The ultra-wealthy use charitable deductions to finance foundations that promote a liberal cultural agenda. Trump should consider capping the amount people can deduct for “charitable” activities. In addition, he should propose a family-friendly increase in the child tax credit.
Apart from a tax proposal, Trump should announce that he is giving up reforming or rescinding Obamacare until after a new Senate meets. He should then rename Obamacare “McCaincare.” And he should offer to start meeting with Democrats to discuss future reforms.
Some Other Potential Action Items
Trump could work in other ways with Democrats instead of the invidious and destructive members of his own congressional party. Passing a major infrastructure bill is an obvious possibility. Another is relieving the burden of student debt, perhaps simply by permitting its discharge in bankruptcy. Other kinds of debt do not receive such creditor-friendly treatment; the assumption is that the credit market itself will punish those who default. The same should be true of loans that are taken out to pay for education. A creditor-friendly approach is not, in this instance, a market-reliant approach.
And of course there is The Next Big Thing: renegotiating trade deals. Bannon said Republicans can win as long as they back economic nationalism while the Democrats talk only about race. True or not, Bannon’s remark was shrewd. The public, indeed even liberal Democrat intellectuals like Mark Lilla, is gradually becoming aware of the nation-destroying consequences of the racial identity politics that the Democrats have been playing for so long.
Moreover, if there is one overriding lesson to be learned from Trump’s electoral victory, it is that the “revolt of the elites” that the late Christopher Lasch diagnosed some 30 years ago has now run its course. Those who have not enjoyed their share of the economic benefits of globalization have begun to push back, hard. Trade, trade, trade should be Trump’s mantra from now onward. As secretary of Commerce, Ross is and should be Trump’s point-man on trade.
This Is How Trump Gets Re-Elected
No question, this is a risky game for Trump to play. Two presidents in our past have decoupled from their congressional parties—John Adams and John Tyler—and both went down to subsequent defeat. On the other hand, congressional Republicans have been playing an even more hazardous game. After Adams’ defeat, his Federalist Party came crashing down not much later.
The Republican establishment is dangerously out of touch with its majority, on issues including war policy, trade, immigration, and perhaps even the intelligence agencies. Congressional Republicans seem to be both members of and apologists for the financial, corporate, and cultural elites last year’s election repudiated. They do not recognize (or refuse to accept) something that Ross Douthat noted 12 years ago: that the Republican Party has become the Party of Sam’s Club.
Without Trump voters, Republicans will not control Congress for very long. The Republican Party seems to be heading for disintegration in the very near future. Angelo Codevilla speaks for many Trump voters when he argues that the Republican Party needs to be—and will soon be—replaced.
Trump should not hitch his wagon to these losers. He can come back and win a smashing victory again if he promotes his signature issues from last year, trade above all. And he should weaponize tax reform against his enemies, both outside his party and, no less importantly, within it.