Memoirs of the Addams Administration 12.

President Donald Trump’s administration came into office determined to break with the policies of President Barack Obama’s administration wherever possible.  Last week witnessed more instances of this commitment.

First came the proposed budget.  The big drivers of government spending are defense, Social Security, and Medicare/Medicaid.  The Obama (old) and Trump (new) budget plans both came in at around $4 trillion of spending; both anticipated a deficit of $559 billion.

President Trump’s proposed budget moves the deck furniture around in ways that please some Republicans and enrages most Democrats.  It increases defense spending by 9 percent ($54 billion) and cuts spending in other areas (the Environmental Protection Agency, the State Department, a bunch of social and scientific programs).  National Public Radio, the Corporation for Public Broadcasting, and the National Endowment for the Arts—essentially Meals-on-Wheels for the coastal elites—would be entirely eliminated.[1]

How sensible is the shift of resources from the State Department to the Defense Department?  Most of the cuts appear to come out of the foreign aid budget.  Some of that aid goes for humanitarian causes, essentially spending American money to take some of the rough edges off human catastrophes not directly of American causing.  Some of that aid goes to governments fighting one head or another of the Islamist world-hydra: Afghanistan, Egypt, Iraq, Jordan, the Sahel countries fighting Boko Haram, and the East African states fighting al-Shabab.  One writer derided it as a “Viagra budget” for Trump’s “insecure fanboys.”[2]

From 2010 to 2016, the number of restrictions on trade (tariffs, subsidies to domestic industry) world-wide quadrupled.[3]  The Group of Twenty issued ritualistic denunciations of the rising barriers, but did nothing to reduce them.  So, following the path scouted by other nations, Treasury Secretary Steve Mnuchin told other finance ministers at the annual G-20 meeting that many existing trade agreements were unfair to the United States and he raised the prospect of renegotiating them.  The U.S. also refused to accept a joint statement opposing protectionism.[4]

In 2012, the Obama administration issued regulations on future fuel-efficiency standards for automobiles.[5]  The standards required manufacturers to almost double fuel-efficiency to reach an average of 54.5 miles/gallon by 2025.  Under the Obama administration, the Environmental Protection Agency calculated that the costs for the auto industry would be $200 billion between 2012 and 2025, while the savings on gas costs to drivers would save $1.7 trillion.  Laudable as these goals may be from a climate change perspective, two points are worth making.  First, gasoline prices have fallen since 2012, so the savings by drivers will be less without the costs to manufacturers being reduced.  Since those costs would be passed on to drivers in car prices, the Common Man might take issue with the regulations.  Second, “average” fuel economy meant that less-efficient SUVs and pick-up trucks could be off-set by more-efficient mini-cars.  In short, car-makers would have to produce vehicles that nobody wants in exchange for making cars that people do want.  Put this way, some of the business hostility to government regulations is easy to understand.

[1] “Trump’s budget: Fulfilling his promises?” The Week, 31 March 2017, p. 6.

[2] “Trump budget: Hard power, not soft,” The Week, 31 March 2017, p. 16.  I suppose you can add this term to the lexicon of liberal vitriol, along with “Deplorables.”

[3] The timing suggests that these were responses to the financial crisis and slow-down in trade.

[4] “Trade: U.S. takes a hard line at G-20 meeting,” The Week, 31 March 2017, p. 32.

[5] “Issue of the week: Putting the brakes on fuel standards,” The Week, 31 March 2017, p. 34.

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