First, an apology. In my cover story last week (‘The Cory revolution’) I implied that Miranda Devine supported the Turnbull coup against Tony Abbott. I now accept that that was not correct, as her articles from the time clearly show. Please accept my apologies, Miranda.
Something very strange is happening in the US. While anti-fascists were shooting Roman candles at Milo Yiannopoulos, Sarah Silverman was trying to stage a military coup, and the entire planet temporarily lost its mind because six Yemeni peasants had to wait a few weeks before moving into New York public housing, Donald Trump quietly entered the second stage of his fiscal reforms. The first was marked by a few relatively modest gestures to CEOs and investors aimed at putting Americans back to work. A few were secured through one-off tax breaks, but most just followed from conveying a renewed confidence in the American market. Trump would sit down with the fat cats, explain his economic vision to them, and they’d rush to get a slice of the pie while the gettin’s good. Before he could purge the smell of menthols from the Oval Office he’d already lined up over a million new jobs
Now we’re seeing exactly what the incentives are. Much has been made of his 15 per cent corporate tax rate, which left free-marketeers from Tony Abbott to Grace Collier scrambling for some scheme that will keep Aussie employers from popping over the Pacific. Why would any sane executive pay 30 per cent and suffer this renewable targets nonsense? Less publicised, however, was an executive order Trump signed on February 3 rolling back the Dodd-Frank Act. For those of you who don’t know (and there’s no reason you should), Dodd-Frank was the Democrats’ response to the so-called Great Recession that heaped punitive regulations on the financial sector. The 1,400-page bill was way too long to describe here, but its worst feature by far was the red tape strewn across start-ups, making it virtually impossible for entrepreneurs to generate seed capital.
Meanwhile, stage three is already in the works. Trump withdrew from the TPP, much to Prime Minister Turnbull’s chagrin – and, later to his embarrassment. When he taunted Washington with proposals that China take America’s place in the Partnership, Japan promptly dismissed the gesture as ‘meaningless’. With investors rushing to employ American workers and the financial sector at last freed after nearly a decade of the Obama Administration, Trump’s now following through on his promise to negotiate the best deals for America. He’s doing so carefully, and always from a position of strength. He’s giving mates’ rates to the US’s traditional partners, but isn’t hesitating to suggest that he’ll look elsewhere if his country’s interests aren’t met. And it seems to be working: with Britain’s departure from the single market now in sight, Theresa May’s gazing wistfully across the Pond. If Australia doesn’t follow suit, its job creators will make a mad dash for California.
Stage four of course is The Wall, and all the immigration reforms that attend it. This one’s short and sweet. Opponents of border security say illegal immigrants are necessary to fuel corporate America’s appetite for cheap labour. (These are usually Democrats, by the way – the self-described champion of the unions. But let that go.) By plugging the holes in the southern border Trump will force employers to hire American citizens, pay them a fair wage, and guarantee safe working conditions.
Partisans on both sides of the aisle are banging their heads against the wall trying to pin some grave ideological sin on Trump. Chief among them (no pun intended) (well, maybe a bit) is Elizabeth ‘Fauxcahontas’ Warren, senator from my home state of Taxachusetts. ‘Donald Trump talked a big game about Wall Street during his campaign,’ she screeched, following the Dodd-Frank repeal, ‘but as president, we’re finding out whose side he’s really on.’ The thing is that the President, unlike the Senator and most of her colleagues at Harvard, isn’t a complete intellectual cripple. He understands that, in order for workers to make a decent wage, corporations need to have money. Otherwise those big cheques will bounce. But nor is he ushering in an age of paranoid, Stalin-esque economic nationalism, as some neo-liberal stalwarts have suggested. To quote Dear Leader on Outsiders, ‘It’s not the trade, it’s the trade deals.’
Taken together, it’s all pretty astounding – revolutionary, even. Trump’s just ‘protectionist’ enough to keep up appearances… yet he isn’t actually doing anything protectionistic. He broke through the ideological duopoly that for years has told American voters they can either have an interventionist government that serves blue-collar interests, or a non-interventionist government serving white-collar ones. Trump’s managed to represent the entire commonwealth, while neither crusading against big business nor sitting on his hands and letting it run amok. ‘But the tariffs!’ you cry. Yes, those are a bit of a bugger. But it’s worth noting that they haven’t yet materialised. And maybe, if his four-stage agenda gets the economy moving again, he won’t have to implement that fifth stage at all. Maybe that’s the point.
Aussie pollies looking to redirect populist momentum away from hardline protectionism (cough Bernardi) might bear this in mind. In fact, it’s good advice for any right-of-centre government. There’s a healthy balance to be struck between scepticism toward government power and Burke’s description of the state as ‘a contrivance of human wisdom to provide for human wants.’ You can deliver an economic agenda that serves the working- and middle-classes without ushering in a bloated regulatory state. In fact, you can deliver such an agenda while rolling back a bloated regulatory state. Hell – when the alternative is Bob Katter’s embargo on Chinese-made ‘Indigenous-style art’, it’s worth a shot.
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