Donald Trump’s Biggest Vulnerability, According to a Nobel Prize–Winning Economist – Joseph E. Stiglitz
There is no wall big enough to solve this problem.
by Joseph E. Stiglitz – Vanity Fair
Lurking beneath all the troubling questions about Donald Trump — would he really try to renegotiate the national debt? Would he really build a wall between Mexico and the United States? Would he really try to prevent Muslims from entering the country? Would he really encourage other countries to develop nuclear weapons?
— lies an even more fundamental question: Can he possibly find the thousands of people he needs to perform the most basic task of government, which is, after all, to govern? It is a truism that governing a country is different from running a business. It’s also a truism that no business is even close to the size and complexity of the federal government.
One hundred and seventy-five years ago, the federal government was embryonic, representing a fraction of gross domestic product. The country was largely agrarian; industrialization was just beginning. Interstate trade was modest and the problems associated with regulating commerce barely presented themselves. Even foreign trade was relatively small. The federal government’s role in banking was limited — the office of Comptroller of the Currency wasn’t established until 1863. The Federal Deposit Insurance Corporation wouldn’t be created for another 70 years. Our natural resources seemed boundless, with no need for protection. There were, of course, major political problems which tore the country apart — tariffs, the national bank, slavery. It made a difference who was elected. But the normal management of government was not a daunting task.
Today, matters are markedly different. The president sits atop a federal apparatus with a budget of nearly $4 trillion, representing some 20 percent of G.D.P. Even these numbers don’t capture the reach of government. In our complex society, we need regulations and administrators to manage the environment, the economy, health, safety — virtually everything.
No single individual can run an enterprise of this size. He or she needs a team — a large team. Different countries obtain the professionalism they need in different ways. In the early days of the Republic, the spoils system allowed an elected president and his party to replace virtually everyone in public service. This regime was inefficient and corrupt, and eventually (in 1871) a civil-service system was introduced, bringing with it the idea of hiring based on merit. One characteristic of all advanced countries is a professional civil service, though it functions in different ways in different places. In the United Kingdom, when a new government is elected, the minister and perhaps the deputy minister of a government office may be replaced, but that’s it. A person called the permanent secretary really runs the department, and a vast civil service below the permanent secretary remains intact. The civil service is committed to executing the agenda of the government, within the constraints of the law.
The U.S.A. is exceptional. When a new president is elected, more than 3,000 officials are appointed to replace those who are departing — not just, for instance, the secretary of treasury, but the deputy secretary, the undersecretaries, the assistant secretaries, the deputy assistant secretaries, and in some cases, even bureau heads. Of these appointed people, nearly half must be confirmed by the Senate. You can find a list of all the jobs, and which ones need confirmation, in something called the “Plum Book,” ostensibly named for the color of its cover but maybe also for the coveted nature of the jobs themselves.
Let’s leave aside any problems inherent in the confirmation process (which are only becoming more acute). Even if the new president could simply name the new appointees by decree, the task is immense: you have to find thousands of people to fill executive jobs that require knowledge, experience, and often technical expertise. Typically, the building up of lists of potential appointees begins months before — years before — the election. (Hillary Clinton has effectively been gathering names her entire time in public life.)
Presidential aspirants are generally cognizant of the magnitude of what faces them. Going back many generations, all major aspirants have had multiple networks upon which they could draw. Many of them had been in public life before, often in positions of great responsibility. They had been involved not only in politics but also business or the military. They had close ties with a political party, and deep personal relationships with men and women who had networks of their own. One can argue the merits and demerits of an “establishment” — the establishment has let us down repeatedly, on many fronts — but one thing it can furnish, and reliably does, is competent people who know what they’re doing when given some routine but important sector of government operations to run. The United States has achieved what few other societies have: citizen bureaucrats, individuals who give back to their country by providing a few years of public service.
Often these are people who have served in a previous administration. George W. Bush drew upon many who had served his father, and his father drew on many who had served Gerald Ford and Richard Nixon. Bill Clinton drew upon many who had been in the Carter administration. Barack Obama drew upon many who had been in the Clinton administration. New presidents combine all this with their own personal networks — Obama had multiple networks, including those from Chicago and Harvard. Add to this the networks provided by the think tanks and the public-policy schools, and any normal presidential aspirant has a strong bench to work with. And it still takes an enormous amount of effort. Transitions are hell, even if you’re starting fast out of the gates.
What networks would Trump draw upon? His lack of experience in government is important. Government is different. He may renegotiate what he owes his bondholders and his contractors, knowing precisely how much he can cheat them before they are likely to go to court. But governments can’t operate on the same principles, and they can’t be run entirely by people whose background is in hotel marketing or financial legerdemain. Trump will have to find thousands of experienced people to fill appointed positions in the federal government. Unlike a Hillary Clinton or a Jeb Bush, with their carousel-size Rolodexes linked to hundreds of other Rolodexes, he has few or no existing networks to draw on outside his very narrow world of real estate and entertainment.
The one existing network that would ordinarily be available to a Republican president — the party itself — will find it hard to step up in key areas. Trump’s positions on too many issues are at odds with what the establishment stands for. Take economic policy. Republican arithmetic always offers challenges: combining tax cuts with deficit reductions, without reducing any of the popular government programs, has proved impossible in practice. But Trump’s promises are on a totally different scale, making fiscal conservatives blanch. No economist or corporate executive with mainstream conservative views could sign on with a straight face for any job in the Treasury Department, the Office of Management and Budget, or the Council of Economic Advisors. It would be a betrayal of principles and would tarnish that person in Republican circles for life.
Trump has torn up other key tenets of Republican orthodoxy. In some cases, he may be speaking only what is common sense, but that in itself may be heretical and make entire categories of federal service impossible to fill for a conventional Republican. Free trade was supposed to make everybody better off. Clearly, large swaths of America know that they are worse off today than they were a third of a century ago. Trade may have been good for the G.D.P., but it wasn’t good for them. While this is totally consistent with textbook economics, Republican orthodoxy has denied textbook economics — even opposing assistance for those who have lost their jobs. For a young Republican to sign up to work with Trump in international economics is to cast his lot with a set of ideas that will never be accepted by the Republican establishment.
Republicans have rhetorically avowed values of inclusion and equality — the “party of Lincoln” — but they have long played off racism and fear. Many Republicans have long opposed measures to eliminate gender discrimination. Unlike his predecessors, Trump has not even paid lip service to inclusion and equality. He has expressed views that many Americans find contemptible. So again, anyone joining the Trump team in areas involved in civil rights, voting rights, immigration, or criminal justice faces the near certainty of being badly tainted.
A President Donald Trump would need to hire more than 3,000 people — “quality people,” as he would say — in a period of little more than two months. He does not know who these people will be. He has spent no part of his life making the acquaintance of likely candidates. He has virtually nowhere to go for help. And he shows no sign that he is even aware of the problem, much less taken steps to deal with it.
Joseph Eugene Stiglitz, ForMemRS, FBA (born February 9, 1943), is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the (US president’s) Council of Economic Advisers. He is known for his critical view of the management of globalization, laissez-faire economists (whom he calls “free market fundamentalists“), and some international institutions like the International Monetary Fund and the World Bank. [Read more]