“With audacity one can undertake anything, but not do
everything.” – Napolean Bonaparte
The Republicans just won the White House and both houses of
Congress on the economy (inflation) and immigration, mostly on the economy. Sure, there are the culture wars, DEI, gender
issues, “wokeism”, etc. But ultimately, it’s
about the economy and how government decisions and policies impact real people
in their everyday lives. When it comes to the economy, timing is everything. And, for the most part, whether it’s the Republicans
or the Democrats in control; Washington finds a way to get it wrong.
The Republicans, specifically Trump and his team, have been
given the greatest opportunity to positively impact the future of the United
States since the Louisiana Purchase in 1803.
And they are blowing it…big time. First of all, they are just flat wrong on tariffs.
Secondly, while cutting government spending is a must and they are to be applauded
for making it a priority; they are going about it the wrong way. Most of these federal government agencies, as
bloated and inefficient as they may be, actually do some good and necessary
work. Third, shutting down illegal
immigration and deporting violent criminals, drug dealers and sex traffickers is
the right thing to do. Setting off panic
among those undocumented immigrants who are here working and behaving themselves
will have negative consequences for many industries.
More to the point on the immigration issue. No question we must clean up the mess of the
last four years. But if the objective is
to clean up “the mess” of the last 75 years, by deporting all those who are here
illegally, that is a fool’s errand. Time
and money would be better spent establishing rational immigration policies and providing
resources to manage it, including a pathway to citizenship for those who have
been here for a long time quietly working and staying out of trouble.
The DOGE project to cut government waste and reduce spending
is long overdue and well-intended. But
its approach and methods are ill-advised.
We consider some corporations as being “too big to fail” knowing that if
they did, it would have a catastrophic domino effect on the entire global
economy. The fact of the matter is that
the U.S. Federal Government is by far the largest institution on the
planet. Its budget dwarfs those of the world’s
largest corporations. Shutting down entire
agencies or pulling all funding from them will create unnecessary hardships for
millions of people around the world. The
mess that is our federal bureaucracy was created over decades and some of it
for good reasons. Attempting to undo it in a matter of weeks is a recipe for disaster. My advice to DOGE: “Measure twice, cut once”…
and realize that while the government is not a charitable organization, it’s not
the same as a business either.
And then there are the tariffs. In general tariffs are a bad
idea. When a country is not cost
competitive in their domestic production and distribution of a product, placing
tariffs on foreign producers only hurts your domestic consumers. If we had excess capacity (plants, equipment
and workers) it might make some sense even if it raised prices on the product in
the short run. If we were not deep in
debt and could afford to subsidize domestic producers until they were competitive
with foreign producers, it might make sense.
But for now, we are dependent on foreign producers; far too dependent. It’s a hole we’ve dug for ourselves since the
end of WW2. It may take a generation to
restore domestic manufacturing to a level which makes us less dependent on foreign
producers. In the meantime, we could use
tariffs selectively in cases where other nations are clearly dumping products
to gain market share, stealing technology or engaged in unfair trade
practices. But just because we have a
negative trade balance with some other nation doesn’t mean it’s their fault or necessarily
a bad thing.
Republicans would do well to understand that if their
crusade to correct for all the bad policies and programs established by those Democrats
AND Republicans who came before them ends up creating the next Great Recession,
they might not win another election for 20 years. And even worse, the ones who take their place will likely
double down on the same old bad policies that got us into this mess in the
first place.
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