Donald Trump and the Trump Phenomenon – An Update

The Donald Trump Administration had forced global politics to accept a new style of leadership from the US. A president who talks tough about America’s place in the world has begun to worry leaders in sensitive regions such as North Asia and Europe. Len Harlan has been a close observer of US politics over many years – his business interests have brought him close to Washington and New York politics while also maintaining close links with Australia, which he visits regularly. On a visit to Australia, Len Harlan addressed The Sydney Institute on Monday 20 March 2017, to review the Trump phenomenon and the new Trump administration in Washington DC.

DONALD TRUMP AND THE TRUMP PHENOMENON – AN UPDATE

LEONARD HARLAN

I’m very honoured to be here and I’m thrilled that so many people are here, so I hope I’ve justified your coming. First of all, it’s important when talking about something like this, to tell you where my politics are. That would give you a reference point. I am fundamentally a centrist. I used to be left of centre and now I’m right of centre. Some people in the States would refer to me as a “Rockefeller Republican” if you want some kind of traditional definition.

What I’d like to do is first set the stage for the phenomenon called Trump. The US in recent years has had a government, political parties and politicians all out of touch with the American people. Just plain out of touch. The attitude was, “Here’s what I’m going to do for you”. It was not, “Here’s how you can be involved with government.”

We probably have the most patriotic country in the world. JFK once said, “Ask not what your government can do for you; ask what you can do for your government.” He catalysed the American people. Then he followed it by defining the mission and that mission was the Moon Shot. These are two very important elements of leadership that have been missing for maybe the last 20 years. Before Trump, the American people felt, in my estimation, that they were ignored, out of touch, and that the Washington establishment was running the country for its own benefit.

So, politicians were not addressing the effects of the internet. They were not really addressing, in tangible form, the hollowing out of the middle class. They were not addressing, in tangible form, wage stagnation. They were not talking about something very fundamental such as the fear of terrorism. And political correctness, that has been so pervasive and growing in the US, has captivated everybody, so that an American, even our President, dare not refer to terrorism in its detail. And yet, underneath it all, has been an anxiety ever since 9/11.

So the government has been seen as not delivering. Instead it was seen as bloated, self-involved, with politicians simply point-scoring among themselves, playing the game for their own benefit and not living up to promises. How many politicians deliver on their promises? A very, very tiny percentage. Lots of glowing statements ahead of elections and, once in office, they disappear.

So you have here a frustration. The frustration is then amplified by a highly politicised press. In the old days, the press reported in the reported section in an objective manner and kept opinion to the opinion pages. The editorial page is fundamentally gone in the United States. That includes the vaunted New York Times. This is a very serious matter, with news merging with opinion, the result is fake news. The proliferation of fake news comes through the new media which has not been fully recognised. As a result, there is a tremendous concern for the truth. And that concern for the truth creates anxiety – who do you believe? And that’s a very serious matter.

Along with this is the fear of job loss, which adds to the insecurity. I’m sad to report that over the last three, even four, years more businesses failed in the United States than were incorporated. That’s not the United States of the past. So this is the environment that gave us Trump.

The US is over regulated and the regulators are seen to be myopic and simply focused on their task without any relationship to the impact it might have on the overall society. I’ll give you an example. The EPA. This example comes from Senator Chuck Schumer. He pointed out that upstate New York has a huge unemployment problem. In one of the small communities upstate, a major corporation wanted to put in a new plant, which would employ about 500 people. They were blocked by the EPA because of some obscure bird in a swamp or some such which had to be protected. Fortunately, Schumer got involved and the rest is history in terms of actually having the plant there. But this has been multiplied time and time again. This is an abuse of power.

Let me give you an interesting set of facts. We all know that in the United States we have a separation of powers – we have the legislative, we have the administrative and we have the judicial. Each of them are to have equal power to keep a sense of order. When special agencies were established, like the EPA, the IRS, the SEC, and  they make the regulations, they administer the regulations and they have their own court system. Now, think about that. That’s a serious deterioration in the fundamentals of our society. For years the government relied on people who really had a sense of responsibility. A lack of separation of powers in those agencies was not abused. But sad to say, in the last 20 or so years, the abuse has been terrible. And the abuse involves threatening people, threatening organisations, and threatening businesses that if they don’t comply, the agencies will go public in a politicised press which loves to go after people. They can ruin a person or a company’s reputation by this public exposure. And the level of recourse is very limited.

We also have excessive political correctness. People are tired of it. There is a desire to call it like it is. Obamacare has opened up many problems. Costs are rising – lies were told saying that a person could keep his or her own doctor and the price would not go up. Such promises were immediately violated. It was said that Obamacare would substantially reduce the load on emergency rooms. In the United States these are basically free to anybody who cannot afford to pay. In the last three years throughout the country, attendance at emergency rooms has risen between 30 and 40 per cent. The problems of medical costs rising with Obamacare, and the failure of medical insurance exchanges where it would be available to everybody have a disgruntled people saying, “What’s going on in Washington?”

So, what did the public want with Trump? The public wanted not just another politician with vague promises, but somebody to shake up the town. The public wanted to feel important and involved, and they wanted a strong leader with a clear, clear vision. So who is Trump?

Trump is that strong leader. Just ask him – he’ll tell you. Absolutely. But he’s an optimist. He’s a man who never gives up. This is a man who has been, purportedly, bankrupt several times. But he never entered bankruptcy because he was an optimist, he built his name as a brand and he worked through the problems. At one point, it is said, that he was with Ivanka Trump, his daughter, and they were walking up Fifth Avenue. There was a homeless man begging and Trump said to Ivanka, “You know, that man is a hundred million dollars wealthier than I am.”

Trump is a showman, not a politician. He knows how to work a crowd. He’s irreverent, not politically correct, he tells it like it is, or as he sees it. He has brilliantly bypassed the politicised press by using his tweets and is able to put out exactly what he wants. He became the news item. He didn’t have to buy ads. In fact, the cost of his campaign was dramatically less than his opponent Hilary Clinton. He demonstrated that the shibboleths of the past no longer apply; he’s rich, he’s a business man, he’s from New York and he is an independent, politically incorrect, outspoken individual.

Trump is a deal maker – that’s the key to everything. He’s been acting on his beliefs for over 25 years. Check out on YouTube the Oprah Winfrey interview with him on her TV show 25 years ago. He said everything then that he said in the campaign. It’s not something he did out of expediency; he has believed this for years. This is very important, because one of the problems with voters is the question, “Do our politicians really believe in what they’re saying?”

Trump is a negotiator. He views life as a negotiation. His style is to keep people off balance. With the best negotiators, you never know where they’re coming from. With Trump, you don’t know where he is and where he’s going. Trump is a strong leader with an articulated vision that people can understand and support. That is also very important. If you watch, you’ll see him implementing just what he said he would do in the campaign. In his first 100 days, you can see it already – virtually everything he said he was going to do, he is doing.

I say to my friends, don’t listen to what he says, watch what he does. Take for example the Cabinet. It’s an incredibly good group of individuals and public servants, but public servants from the private sector. Most of the Cabinet are not career politicians; most are independent enough to say, “if I can’t get it done properly, I’m out of here.” Remember, for Trump to implement his policies, he needs his Cabinet members to run those particular offices consistent with the set of beliefs and vision that he has.

So we’re talking about an outstanding group. One example I know extremely well is Wilbur Ross. Wilbur Ross is Secretary of Commerce. He and I were section mates at Harvard Business School just a few years ago. We’ve been good friends ever since. Wilbur is one of the brightest, most thoughtful, well-equilibrated individuals that I know. He is an internationalist and he came from nothing to being a very wealthy man. He is a thinker and he is a doer. From what I can see, he will be substantially responsible for international trade policy and it will not be isolationist. Not at all.

Look at the Supreme Court nominee. One would have expected if one was an ideologue, that you’d have somebody who would be extreme. This is not the case. The overall trait of the Supreme Court nominee is respect for the Constitution, which is really what most Americans would like to see.

Trump’s vision, as I see it, is to make America great again. Now that’s a novel expression. But what does that really mean? A great economy.. Manufacturing.. Innovation.. Rebuild and expand the infrastructure.. Reduce taxes.. Reduce regulation.

Secondly, his vision is the protection of the American people, so the American people feel safe. Remember I started by mentioning 9/11 and how since then there’s been a level of anxiety. That means, first, having a strong defence. Here Trump has proposals to substantially increase the defence spending. And in that regard, to make sure that our allies carry their fair share of the costs. In other words, all the members of NATO. They were supposed to contribute two per cent of their budget and they’re not. That was a problem with Merkel just this past week. Trump, the negotiator, says, “What’s the quid pro quo? You want something from me, what do I get from you?” It’s the key to watching what Trump does.

Trump wants a well-conceived and implemented immigration and border protection plan. In other words, he’s saying – which is the history of America – that people who come to the United States as immigrants (we are an immigrant society) should want to be part of our society. He is saying they must want to be an integral part of our society. That has been the history of our waves of immigration, and that’s what has  made us strong. Trump is saying what we want to focus on. The furor over the seven Muslim states is nonsense. Trump simply said he wanted a moratorium for 90 days so we could figure out how the US would vet these people so that they can come in. It’s consistent with our history of taking everyone, as the Statue of Liberty has defined it.

Trump wants a strong, workable healthcare system, to maintain Medicare and Medicaid. You hear the opposition saying he wants to get rid of that. We have a safety net in Medicaid and Medicare that’s extraordinary. It was already in place, coupled with, as I said earlier, the emergency rooms throughout the country which are equipped to take care of everybody and anybody regardless of income or social standing. But Trump does not want to force people to buy insurance. Make insurance competitive instead of cookie cutter, so that, like when you buy home insurance, or any other kind of insurance, you can choose what fits your needs and pay accordingly. Some feel they can self-insure, for others they can’t. Trump wants tax credits to offset the cost at the bottom level. As one’s income rises, the tax credits decrease, which to me is very fair.

A lot of young people don’t want to buy insurance. They feel they’re healthy and shouldn’t be compelled to buy insurance or have a penalty attached. When the Congressional budget office went through the Ryan Plan, which is the Trump Plan, it claimed that around 24 million people would be uninsured in four or five years time. However, if you read down in the text, about 17-18 million of them are young people who choose not to buy insurance. In fact, the number of people who would not be insured is remarkably low when you factor this in. But it made a big headline that 24 million would be uninsured under the Ryan Plan.

Trumps’ “make America great again” is a plan for America to be respected in the world. And that means support for our true allies, not the least of which is Australia. Americans have a love affair with all of you. That’s very true. And it means diplomacy is backed up by strong armed forces. If you have a strong military, it means you don’t have to use it. That’s a very key point here. In other words, the stronger the military, the less likely he will use it. But there will be hard diplomacy instead of soft diplomacy.

These are our common traits – international trade, fair and well balanced agreements, the quid pro quo approach and not isolationist, growing the economy by reducing and simplifying taxes, and letting small business grow. The essence of the United States is small business. With the concentration of banking because of the Dodd-Frank bill, the United States has seen the loss of 3000 country and regional banks – the backbone of small business. Hopefully, we will start to see that reversed. I also start to see a challenge to the concept of too big to fail.

With infrastructure, Trump’s forte is building. He knows it well. When New York City was floundering over the rebuilding of an ice skating rink called the Wollman Rink in Central Park, Trump said, “Give it to me and I will rebuild it.” And he rebuilt it in less time, and for less money.

We’ll see the use of the private sector for infrastructure funds, which largely were invented here by Macquarie Bank. You’ll see the use of such infrastructure funds and other unique private financing vehicles to rebuild our infrastructure. Reduction of regulations already has meant a freeze and review and some rollbacks at the EPA and  SEC. Add to that the Consumer Financial Protection Board (CFPB) which was constituted by installing one person at the top who cannot be fired and has no responsibility to anybody and yet can ruin people’s lives. We’ll see the Dodd-Frank Bill attacked and the whole issue of too big to fail. Already Trump has announced that he wants to substantially cut the budget of the EPA and the State Department. In the United States, you can’t fire public servants easily. But you can get rid of them by getting rid of their jobs. So there’s a method to the madness.

There will be tax reform, cutting corporate taxes so that American companies will repatriate dollars to the United States. Cut the corporate tax rate so it’s much more competitive and cut individual taxes. You might well ask – how can all this happen? Well, if you expand the economy, tax collections will go up. So the key is an expanded economy. There will be a revamping of Obamacare and on foreign policy we’ll see that Trump will be an internationalist. His own investments have been international so why not. As I said, look at what he does, not what he says. Trump has hotels and investments all over the globe.

Trump loves to negotiate and to tell it like it is. Trump will be for equality in negotiations. Not trading hard stuff for soft stuff. Let me give you an example. The United States under the Iran Agreement gave Iran $150 billion while all it got in return were soft things – promises and niceties and wishful thinking. That will be gone. Trump will be very very pragmatic. He will work with China. He is respectful of strong leaders, as he is of strong economies. I can’t define how it will work, but I do believe that the US and China will work out something so that it will not be an antagonistic relationship.

Trump will focus on what America wants to see when it goes international. Instead of starting with democracy, you start with the rule of law. You want to see a country have the rule of law. Secondly, you want to see a free market economy, capitalism if you will. And then, if those are well in place and they work, democracy can evolve. In my mind, we’ve had a terribly disjointed approach. We start with aiming for democracy only to have failure, after failure, after failure.

Trump’s approach is to go directly to the American people. He’ll bypass the press with his tweets and big rallies – he loves them. He’s good at it. Thousands of people in an arena or a hanger is very exciting; people will get turned on and feel that he’s relating to them. That’s the point that’s been missed. Not sticking inside the beltway and pontificating. He does not want to be seen as locked inside the beltway. Note the number of times he goes to Florida, the number of times he goes to New York as well as being in Washington.

I believe Trump will implement what he says. He will carry through on those campaign promises. Most importantly, and this is key, he has a four year runway to execute his programs. Even if Congress changes in two years, he has an enormous amount of power to effect change during that four year period. What happens after that will be up to the electorate.

I am very optimistic. I believe we have a pragmatist here, not an ideologue. That is very important. We have an optimist and we have a doer. A man who if he says something he does it. We’ve already seen evidence of that. The Trump process will be more confrontational. Things will appear less smooth than with traditional diplomacy. As I said, don’t listen to what he says, watch what he does. The negotiating tool is to keep people of balance, off guard. I suggest to all my friends,  adjust your expectations and we will then get much more than we expected. And I do think we shall all be pleasantly surprised.