DOMEocracy

hardline political news and analysis

Month: December, 2018

Good for Grassroots, Bad for Business

Back in the mid-1990s, the Clinton Administration embraced a so-called “royalty holiday” for oil companies that developed leases in the deeper waters of the Gulf of Mexico. The idea was pretty simple: rather than impose royalties of 12 1/2% to 16 2/3% for developing publicly-owned resources (already paltry by international royalty standards), encourage domestic exploration and production by giving oil companies the leases for little or no royalty.

Having worked on offshore oil policy since the mid-1970s, I was skeptical such inducements were needed; there was enthusiastic drilling in deeper North Sea wells absent such promotional incentives, under much more challenging conditions than anything that would be faced in the Gulf of Mexico. 

My boss, Rep. George Miller, sent me off to talk with  executives at several of the oil refineries in his California district, and every one of them told me the same thing: if you want to give me a lease for nothing, I’ll take it. But I would never make a decision to invest hundreds of millions of dollars on developing a deep-water lease based on a “promise” Congress could rescind.

The experience taught me a valuable lesson about the thinking of private industry executives, an area of knowledge about which my training as a labor historian had left me somewhat deficient. Business naturally favors low taxes and weak regulations, but equally important is certainty — or whatever can pass as certainty — in public policy. Give them a challenge – tougher environmental regulations, safer workplaces, higher minimum wages – and most businesses will figure out how to make it work. But sow economic chaos and they are reluctant to invest, hire or innovate.

Which brings me to the question of how long the business community in the United States can tolerate Donald Trump as president. True, some were doubtless elated that a son of the private sector had been elevated to the presidency. But Trump wasn’t the kind of businessman they really wanted: he was well known in New York as a reckless blowhard whose main product was his name and personality, and whose bankruptcy-prone track record reflected little of the training he presumably received at Wharton. 

In the waning weeks of 2018, Trump’s executive driven form of governing has created needless and dangerous chaos in the nation’s economy. Even though Trump’s “great” economic success is little but a continuation of the steady recovery from the 2008 meltdown, the economy is, by many measures, sound (if you ignore issues like record deficits, income inequality and sluggish wage growth). 

The combined impact of Trump’s unilateral decisions on trade policy, military alliances, environmental policies, and weapons limitations, combined with threats against the Fed chairman and massive high-level staff turnover in the White House and executive branch departments, have all combined to produce a hair-raising end to the year on Wall Street. The Dow Jones plummeted on Christmas Eve, then skyrocketed on the 26th, then dropped again: down 4,000 points since October. Overall, the S&P index is likely to record its largest annual percentage decline since 2008, when the nation was in the midst of the worst economic crisis since the Great Depression.

There is real loss behind these wild fluctuations: many hundreds of billions of dollars disappearing from IRAs, pension funds, college and retirement accounts, and other personal and business investments. The only volatile element provoking such losses appears to be the erratic chaos-producing gremlin in the Oval Office whose incomprehensible, self-aggrandizing antics are costing tens of millions of Americans enormous amounts of money, destabilizing markets, damaging trade relations and undermining confidence in the economy – all for no reason.

Which brings me back to the value of predictability. It seems self-evident that there is a core of fanatical Trump supporters whose loyalty is virtually unshakable regardless of the boorish behavior, the habitual mendacity, the mean-spiritedness, or even the questioning of Santa Claus’s existence to a 7-year old believer. But one must wonder how long the supposed beneficiaries of Trumpian and Republican policies – the ultra-wealthy and the corporate and financial elite – can tolerate the economic tsunamis he triggers for no apparent reason except to own the momentary news cycle.

Whether they are liberal or conservative policies, the business community needs to know the rules going forward, and with Trump, it is obvious there can be no such clarity because there is no over-arching philosophy of governance. The challenge for the boardrooms and Wall Street is what to do about the problem. A conservative challenge to Trump is pointless given his base support; a moderate business-friendly Republican (like John Kasich) stands little chance in the 2020 GOP primaries and caucuses. Instead, the business community may have to consider the unlikeliest of options: throw its considerable money and influence behind an acceptable Democratic opponent in the nominating process in hopes that a short-term alliance purges the GOP of Trump’s taint without empowering a liberal who promotes policies antithetical to the corporate world.

That’s a tough choice for conservatives, and some who have profited handsomely from the GOP-Trump deficit-inducing tax cut may prefer to sit it out on their fat wallets and purses. But for many, I suspect, the chaos is getting too chronic, too disruptive, and too expensive.

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Bush Without Tears

The presidency of George H.W. Bush is enjoying a nostalgic portrayal following the death of “41” on November 30. His is being called “the most successful one term presidency in history,” and that description may well endure given the obvious fact that, by definition, one term presidencies have invariably ended in rejection by voters.

The nostalgia for Bush is certainly enhanced by the stark contrast between his Brahmin, New England absence of braggadocio and the crude narcissism of the current occupant of the Oval Office. Bush’s self-confidence in the role of statesman was doubtless influenced by his having been surrounded by powerful politicians — his father was a U.S. senator from Connecticut — his entire life. A member of Congress once described to me Bush’s comment to Democratic Rep. Dan Rostenkowski, with whom he had served in the House, as he settled into his chair in the Oval Office. “Danny!” Bush 41 reportedly exclaimed, “Can you believe I’m the [expletive deleted] president of the United States?” 

Bush had a deep appreciation for the role Congress played in the policymaking process although his service in the House was limited to just two terms. Despite subsequently holding a litany of high offices — CIA  director, ambassador to China and to the United Nations, Vice President — Bush may well have shared a sentiment I have heard from many whom moved on from the South wing of the Capitol: no job was more fun than being a member of the House.

Indeed, even as president, Bush would use his lifetime privileges in the House gym to play vigorous games of paddle ball (I think it was) with current members, understanding as some of his successors did not the enormous value of developing and nurturing personal ties with those you will need to implement your legislative agenda. Of course, with both houses of Congress in Democratic hands during his presidency (the Senate had been in Republican control for three quarters of the Reagan years), one might say Bush had little option but to find ways to cooperate with Democrats, but Bush’s efforts paid off when he needed congressional support for the war against Saddam Hussein’s invasion of Kuwait or for the urgent tax increase that may well have cost him his presidency.

Still, it is important not to let the testimonials accumulate without maintaining a critical eye on Bush’s overall record. As unpretentious as his demeanor could be, his legacy will have to account for some decisions that historians cannot help but view critically. He gained the presidency, many believe, thanks to a race-tinged commercial that, using grainy footage and menacing music, linked Democratic nominee Gov. Michael Dukakis to Willie Horton, an African American murderer who had committed horrific crimes while on a weekend furlough from prison allowed by Massachusetts law. Politics, and campaigns, can certainly be ugly; this commercial, however, is often credited as being among the nastiest — and most effective.

Bush also committed a serious error by making a totally incompetent Dan Quayle his running mate. I recall seeing the headline announcing the selection and wondering, “Who on earth could that? The only Quayle I know is Dan, and no one would ever put him in line to the presidency!” Quayle would be the source of multiple embarrassments during the Bush years, as well as countless prayers offered up for the president’s continued good health.

More consequentially, Bush appointed the ultra-conservative Clarence Thomas to the Supreme Court in what many viewed as a gratuitous act to replace Thurgood Marshall with another African-American justice. The impact of that 1991 appointment continues to have devastating implications more than a quarter century later. Bush would not be the first president to appoint a justice whose rulings were at odds with the ideology of the man who appointed him, but Thomas’ reactionary views were well known at the time of his controversial appointment and even more contentious confirmation, which did not move Bush to withdraw the selection despite a massive public outcry. 

Neither historians, the press or the public should attempt to define a person’s legacy based on a few incidents, even if criticism is merited, and certainly that is the case with one whose service to the country lasted nearly three quarters of a century. Bush is being remembered rightly as one who displayed political courage and personal generosity and bipartisan friendship. He may even deserve that title as the best one-term president in history.