Excellence in Higher Education, Trump Style

October 6, 2025

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Last week, the Trump administration unveiled its “Compact for Academic Excellence in Higher Education.” The idea is to offer preferential access to federal funding for universities that will embrace certain educational policies. They would lose their funding if they failed to enforce the provisions of the compact on their campuses and to document their continued compliance. This offer is for nine large universities for now, but I suspect the intention is to use it as a model for higher education more broadly.

Equality and nondiscrimination

The most prominent of the compact’s stated goals are equality in admissions and nondiscrimination in hiring:

Therefore, no factor such as sex, ethnicity, race, nationality, political views, sexual orientation, gender identity, religious associations, or proxies for any of those factors shall be considered, explicitly or implicitly, in any decision related to undergraduate or graduate student admissions or financial support, with due exceptions for institutions that are solely or primarily comprised of students of a specific sex or religious denomination.

The compact asserts not only that favoritism toward underrepresented minorities violates civil rights laws, but it damages the very people it is intended to help. “Treating certain groups as categorically incapable of performing—and therefore in need of preferential treatment—perpetuates a dangerous badge of inferiority….” If the administration believes this, I find it strange that the compact requires universities to “publicly report anonymized data for admitted and rejected students, including GPA, standardized test score, or other program-specific measures of accomplishment, by race, national origin, and sex.” If the university is supposed to be race-blind in admissions, then why require it to measure and publicize racial disparities in achievement?

Ironically, this insistence that universities base their admissions and hiring decisions strictly on merit comes from an administration that is noted for placing political loyalty above merit in its own hiring. In the Justice Department, the President has been replacing career prosecutors with less qualified loyalists who are willing to drop investigations against his supporters and bring dubious charges against his enemies.

The marketplace of ideas

Here the compact starts with a noble intention:

Truth-seeking is a core function of institutions of higher education. Fulfilling this mission requires maintaining a vibrant marketplace of ideas where different views can be explored, debated, and challenged.

Again, the issue of hypocrisy looms large, since this administration is hardly a paragon of truth-seeking. Trump is the first president to fire the head of the Bureau of Labor Statistics because he did not like the monthly employment numbers. The “truths” he posts on his Truth Social website are rife with misinformation.

When the compact elaborates on this academic marketplace, it takes a partisan stance. Institutions are charged with the responsibility of “transforming or abolishing institutional units that purposefully punish, belittle, and even spark violence against conservative ideas.” Nothing is said about protecting liberal ideas.

Some might say that liberals are currently too predominant on college campuses to need protecting. But not every university—and certainly not every academic department—is a bastion of liberalism. There is always a danger that people with minority viewpoints will be treated badly, but conservatives are hardly the only ones to experience this. There are staunchly conservative business departments as well as staunchly liberal sociology departments. Wealthy donors like the Koch brothers have funded academic programs explicitly designed to promote their conservative or libertarian views. (See Nancy MacLean’s Democracy in Chains for a description of an academic program designed to produce more right-wing judges.)

In a variety of disciplines, liberalism and conservatism have ebbed and flowed in the natural evolution of intellectual and cultural life. In economics, the conservative views of Milton Friedman were in the ascendancy around the time of the “Reagan Revolution,” but have lost support more recently. Now that conservative ideas are on the defensive in many disciplines, the idea of using government power to bolster conservative views has its appeal, especially to right-wing autocrats and oligarchs. That is not the path to excellence.

The compact calls for a marketplace of ideas with civility on all sides. In practice, we can easily imagine censorship of liberal professors or publications if MAGA supporters have their way. This is, after all, the administration that cheered when corporations used their market power to force liberal comedians off the air, hoping to expand that power by currying favor with the government. This administration has been working to consolidate media under the control of wealthy conservatives like the Ellisons. Are its hopes and plans for our universities any more benign?

Far better to let different schools of though rise and fall on their scholarly merits, without a highly politicized federal administration putting its thumb on the scale.

Science and the public good

The compact says that “signatories shall responsibly deploy their endowments to the public good. Any university with an endowment exceeding $2 million per undergraduate student will not charge tuition for admitted students pursuing hard science programs.”

Like the commitment to truth, the commitment to science may be more than a little hypocritical, considering this administration’s habit of rejecting science in favor of entrenched ideology or personal opinion. On climate change, on covid, on autism, on tariffs, on immigrant crime, the administration has made many claims unsupported or contradicted by scientific facts. The President does seem to like computer science and the technological elite who are making their fortunes from it, but he is far from a student of scientific disciplines, “hard” or otherwise.

Without in any way disparaging science, I doubt that showing favoritism to science majors is good policy in the long run. Now that he has made himself Chairman of the Board of Trustees of the Kennedy Center, perhaps Trump would do well to read the quotation from JFK inscribed on its outer wall:

There is a connection, hard to explain logically but easy to feel, between achievement in public life and progress in the arts.
The age of Pericles was also the age of Phidias.
The age of Lorenzo de Medici was also the age of Leonardo da Vinci.
The age of Elizabeth was also the age of Shakespeare.
And the New Frontier for which I campaign in public life, can also be a New Frontier for American art.

Trump wants to make America great again, but his conception of American greatness is depressingly narrow. The liberal arts and humanities have their place, especially as Americans struggle to define their humanity in the age of smart machines and find work that computers cannot do. As a Washington Post editorial put it:

Yes, “hard” sciences are important, but the artificial intelligence revolution could play out in unexpected ways. Many computer science majors might soon be unemployed, for example, because coding is easily automated. History or philosophy majors might find themselves better equipped to confront the hardest intellectual challenges of the years ahead.

Affordability

The compact is on firmer ground when it expresses concern about the affordability of college and the “life-altering debt” that students have had to take on. It asserts that “universities that receive federal funds have a duty to reduce administrative costs as far as reasonably possible and streamline or eliminate academic programs that fail to serve students.” I would like to see the federal government keep its focus on affordability, while leaving decisions about what to think and what to study to academic professionals and their students.

Here too, I am skeptical of the administration’s intentions. Threatening to withhold funding from American research universities that are the envy of the world does not inspire confidence. Nor is it encouraging that the same administration is making health insurance less affordable by cutting hundreds of billions of dollars from Medicaid and other health insurance subsidies. If Republicans are serious about supporting excellence in higher education or health care, they need to put their money where their mouth is.

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Posted by Ed Steffes

Lawless Inefficiency

February 10, 2025

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We are now three weeks into the second Trump presidency, and I have been trying to organize my thoughts about the firehose of executive orders spewing out from the new administration. I will focus on two of the things that bother me most.

The first is that many of the executive orders and actions are arguably illegal, and those arguments are being made in court.  Often that is because they appear to violate the separation of powers between the executive and legislative branches of government mandated by the Constitution. My second concern is that the President is trying to market many of his most radical measures as exercises in government efficiency, an appealing but misleading notion. In practice, they seem more about getting rid of programs and agencies that Donald Trump and Elon Musk do not like. Musk’s Department of Government Efficiency (DOGE), itself created by executive order rather than by Congressional legislation, might be more accurately named the Department of Government Obstruction.

Beyond the law

Article I of the U.S. Constitution clearly gives Congress the sole authority to levy taxes and approve expenditures. No money can be spent without congressional approval, and approved funds must be spent as Congress directs. Spending money the way Congress intended is part of the President’s responsibility to “take care that the laws be faithfully executed” (Article II, Section 3).

The Congressional Budget and Impoundment Control Act of 1974 reaffirmed Congress’s budgetary control, after President Nixon tried to impound some funds Congress had allocated. The law did leave the President a little wiggle room by allowing some temporary pauses in spending under special circumstances. But even then, the President must report to Congress and give it an opportunity to weigh in.

Shutting down an entire agency by executive action appears to exceed the President’s legal authority, let alone the authority of an unelected and congressionally unapproved associate like Elon Musk. The Agency for International Development was created by Congress over 60 years ago and has been funded with bipartisan support ever since. It has saved millions of lives by fighting hunger and disease around the world. It has also built enormous good will for our country and helped American farmers by buying and distributing their products. Something is very wrong when a president can destroy in a few days what took decades to develop, and do it without so much as a congressional hearing.

Musk has already announced the death of two other federal entities, the Department of Education and the Consumer Financial Protection Bureau. The Education Department provides financial assistance to underfunded schools, funds much of the country’s special education, and administers the student loan program, among other things. The CFPB has saved consumers billions of dollars by cracking down on shady business practices, such as hidden fees imposed by banks.

Of course, we should not be too surprised if a president with a history of indictments and one multicount felony conviction tries to run a lawless administration. During his campaign, Trump talked about being a dictator, and voters should have taken him seriously.

In the name of efficiency

President Trump and his supporters have tried to pass off the most destructive executive decisions as a normal quest for government efficiency. Here is how House Speaker Mike Johnson defended the USAID spending freeze at a recent press conference:

There’s a gross overreaction in the media to what’s happening. The executive branch of government in our system has the right to evaluate how executive branch agencies are operating. It’s not a power grab. That’s what they’re doing—by putting a pause on some of these agencies and by evaluating them, by doing these internal audits. That is a long overdue, much welcome development. We don’t see this as a threat to Article I at all. We see this as an active, engaged, committed executive branch authority doing what the executive branch should do.

Is the aim here really “to evaluate how executive branch agencies are operating,” or is it to impede their operation, maybe permanently? Sending USAID workers home, shutting down the headquarters, taking down the website, and even taking the name off the building are a strange way of evaluating an operation. Would a private company shut down all its production and sales if it intended to remain in business? I thought Republicans wanted federal agencies to run more like businesses; not go out of business!

Efficiency is about getting the best ratio of benefits to costs. Improving efficiency by increasing benefits and/or cutting costs is a challenging task. If taken seriously, it requires working within agencies to find ways of doing things better but less expensively. Sometimes it requires large short-term investments for the sake of long-term payoffs, as when an agency replaces antiquated technology.

We are not hearing much about improving government operations, just cutting them. But cutting costs without regard to the impact on results is not efficient. Consider the President’s “Deferred Resignation” plan, where federal employees can resign now but keep getting their pay and benefits for another seven months. It makes no distinction between the most qualified, productive workers and the least. Is it efficient to pay good workers to leave instead of paying them to keep working? Is it efficient to hire a new worker to do a job, while still paying the old worker not to do the same job? Just getting rid of as many workers as possible appeals to antigovernment ideologues who have trouble imagining federal employees as good workers doing anything important.

Much of the work of Musk’s Department of Government Efficiency is shrouded in secrecy. His workers are mostly young technicians who know a lot about computers, but have less knowledge, experience, or appreciation regarding the government agencies they are supposed to overhaul. When they descend on a department brandishing their butcher’s knives, we do not know whether they are cutting fat or meat, or if they can even tell the difference. Apparently, they just walk in the door and start ordering administrators to cut jobs and stop spending money on things that do not conform to the President’s priorities. Among the kinds of spending they say to stop are the clean energy projects authorized by the Inflation Reduction Act, not because they are wasteful, but because the President doesn’t acknowledge greenhouse gas pollution or climate change as problems. The cuts certainly seems to violate the Impoundment Act and the obligation of the executive to take care that the laws are faithfully executed. DOGE is designed to circumvent the normal congressional budgeting and oversight processes. Trump has also fired the Inspector Generals who are normally responsible for combating waste, fraud, and abuse. His people—or more precisely Musk’s people—will decide what is wasteful.

Remedies

The most obvious remedy for an executive branch run amok—or in this case, run aMusk—is for the legislative branch to reassert its Article I authority. The Republican leadership in Congress shows no interest in doing this. For whatever reason—ideological agreement or intimidation by their bully leader—they seem content to let Trump and Musk dismantle federal agencies. No doubt many Republicans are happy to accomplish by executive fiat what they have been unable to accomplish legislatively, such as killing clean energy and consumer protection.

The third branch of government, the judiciary, is showing signs of life. A number of judges have responded to the many lawsuits already filed by issuing temporary restraining orders, pending hearings on the legal objections. (As I write this, I have just heard that a judge has accused the administration of violating his previous order to stop freezing spending.) Trump, Musk, and Vice President Vance have responded by attacking the judges, with Musk calling for their impeachment. We may be headed for a constitutional crisis, where the President refuses to be bound even by court orders.

No matter what Trump does, removing him from office before his term expires seems a remote prospect, since the Supreme Court has granted him immunity from prosecution and members of his own party will not vote to impeach him. Removal by means of the 25th Amendment would require cooperation of the cabinet, now well-stocked with loyalists who are as extreme as he is.

That leaves public opinion. One reason why Trump and Musk chose USAID to begin their anti-government crusade is probably that foreign aid does not have a very large domestic constituency. Polls have found that Americans grossly exaggerate how much we spend on it—actually about one-half of one percent of the federal budget—and wonder why we do not spend that money at home. As the demolition derby extends its efforts to other targets, Americans may discover how much federal spending impacts their own communities. When budget cuts start hitting local hospitals, schools, farms and construction projects, the administration may discover that cutting spending is much more popular in the abstract than in the concrete. A little civic education might turn out to be the silver lining of the dark cloud that hangs over the country.

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Posted by Ed Steffes

Holding the Center

November 26, 2024

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The latest issue of The Week has a cover depicting several of Trump’s cabinet appointees setting off explosives. The caption is “The Wrecking Crew: How Trump’s nominees could blow up the government.”

The conventional wisdom has been that in a two-party system, the winning party is the one that manages to straddle the center. It is the one that avoids the extremes and appeals more to the large middle of the electorate. Of course, that can be easier said than done. When society is more polarized, middle ground is harder to find. In addition, the center is a moving target. Policies that were once considered extreme, like Medicare or legalized abortion, have become more mainstream; and policies that were once considered normal, like segregation of the races, have become practically unmentionable. Nevertheless, election losses have often occurred when liberals got too far to the left of the voters—like George McGovern in 1972—or conservatives got too far to the right—like Barry Goldwater in 1964.

This year we have a more confusing situation. Many observers want to attribute the Democratic loss to the party’s excessive radicalism, putting them out of touch with “ordinary Americans.” And yet it is the winning party that seems more intent on blowing up the government. What’s going on here?

Radical-left Democrats?

Many of the post-mortems on the election fault the Democrats for endorsing too many unpopular ideas. A common accusation is that Democrats strayed too far from the bread-and-butter issues that interest most working-class voters (often defined as the non-college-educated). That left room for Republicans to claim more of the middle ground, perhaps becoming the new party of the working class.

On some issues, such as protections for transgendered persons, the Democratic position does appeal more to educated liberals than to the general public. However, let’s not forget that when Joe Biden got the Democratic nomination in 2020, he was considered a moderate Democrat, and one with a strong record of supporting working-class interests. As Vice President and eventual presidential candidate, Kamala Harris stuck close to the Biden agenda, so much so that she was criticized for not putting more distance between them. Notice also that other Democrats with moderate positions and solid pro-working-class credentials—Sherrod Brown in Ohio and Bob Casey in Pennsylvania—also lost this year. Democratic extremism seems hardly a good enough explanation.

Two developments early in the Biden presidency damaged his reelection prospects, a spike in inflation and a surge in illegal immigration. Covid played a role in both, creating supply shortages that raised prices and a backlog of migrants who came in only when Covid restrictions were lifted. Biden’s responses to these problems may have been less than fully successful, but they were hardly radical. He supported a bipartisan bill that would have increased border security and processed asylum applications faster, and he acted unilaterally to tighten security when the bill failed. He increased energy production to bring costs down, and supported the Federal Reserve’s use of monetary policy to reduce the rate of inflation.

Or radical-right Republicans?

I think that a fair comparison between the candidates shows Donald Trump and the MAGA Republicans taking the more radical positions. Trump was the one who asked Congressional Republicans to kill the bipartisan immigration bill, so he could keep the issue alive and gather support for his more radical solution of mass deportation. His major economic proposal, high tariffs on imports, has been out of the economic mainstream for the past century. Most economists believe that his policies would hurt the economy and raise costs for consumers. In foreign policy, Trump’s affinity for dictators places him at odds with our foreign policy establishment and pro-democracy forces within his own party.

As he ran for president this time, Trump was being prosecuted for one of the most radical actions in American history, trying to overturn the previous election by illegal means. He could only be reelected by convincing  most of his followers that (a) he had really won the 2020 election despite all evidence to the contrary, and (b) his indictments for this and other illegal behavior were nothing but politically motivated witch hunts.

How did a person so far outside the norms of political policy and behavior manage to capture the middle (almost), by getting just below 50% of the popular vote? One reason was the advantage of not being the incumbent this time. Incumbents have had a tough time winning lately, not only here but in other democratic countries. Voters are restless and dissatisfied, especially because the benefits of economic growth have been going mainly to the richest segments of society for the past half-century. Meanwhile, working-class families have been struggling to get ahead. Neither party has come up with a very good solution to this problem.

As the non-incumbent, Trump could make dubious claims about his proposals without having to test them in the real world, at least not yet. He could exaggerate the revenue gains from his tariffs while pretending that the costs would be borne by foreigners, instead of by US importers and their consumers. As details of the Republican Project 2025 plan came out, and the public turned against it, Trump could say, “I never heard of it,” while knowing full well that his own political associates and allies were writing it. Now he has put its co-author, Russ Vought, in charge of the Office of Management and Budget.

Perhaps most important, Trump had the support of a well-funded right-wing propaganda machine that constantly portrayed his opponents as dangerous radicals and “the enemy within.” He distracted attention from his own radicalism by constantly referring to Biden and Harris as “radical-left Democrats.” One of the campaign’s most effective ads claimed that Harris cared more about “they/them”—a reference to transgender pronouns—than about “us.” A negative campaign does not have to be fair or true to be effective.

How will Trump govern?

No one who follows the news closely should be surprised at the radicalism now on display in the Trump cabinet selections and policy proposals. (Some less informed voters may be scratching their heads and asking, “Is this what I voted for?”) But the federal government is a huge and complicated institution, one that does not change quickly. Many of Trump’s “concepts of a plan” may be too radical to implement fully.

Critics are pointing out that actually rounding up and deporting millions of migrants—and their children, even if they were born here?—would be prohibitively expensive, as well as very disruptive to many communities and industries, such as agriculture and construction. High tariffs on imported goods could also be very costly, especially if they trigger trade wars that hurt our own exports. Trump is promising 25% tariffs on imports from Canada and Mexico, our biggest trading partners, which would violate the existing trade agreement that Trump himself signed. However, his appointed Treasury Secretary, Scott Bessent, is said to be approaching tariffs more cautiously.

MAGA Republicans are now claiming a popular mandate to “dismantle the administrative state.” Half the popular vote is a shaky basis for claiming a mandate for anything this controversial. Thousands of federal workers staff the agencies that make and implement the day-to-day decisions that make the government work. They decide who gets prosecuted (DOJ), how to get the lead out of our water supply (EPA), what qualifies as a charitable deduction (IRS), what drugs get approved (FDA), who qualifies for assistance after a hurricane (FEMA), and on and on. The federal government is a huge employer, and many of these positions are good middle-class jobs that are important to the economy.

Dismantling the administrative state could mean many things, all of which are now under discussion:

  • Placing people in charge of agencies who have neither experience in managing large organizations nor much knowledge of the organization they are supposed to head
  • Reclassifying merit-based civil service jobs to make them political appointments rewarding ideological or financial support for the party in power
  • Centralizing decision-making in the White House, so that the President decides who gets prosecuted, who gets audited by the IRS, which states get disaster relief, and so forth
  • Impounding and refusing to spend money authorized by Congress for government agencies (technically illegal, but appealing to a rogue administration anyway)
  • Eliminating entire departments or agencies (such as favorite Republican targets like the Department of Education, the EPA, and the Consumer Financial Protection Bureau)
  • Drastically cutting the nondefense discretionary parts of the federal budget

Elon Musk and Vivek Ramaswamy have been asked to head a “Department of Government Efficiency,” oddly named because it will not be a real government department. Musk has claimed that he can cut $2 trillion dollars from the government’s $6.75 trillion budget. Critics are quick to point out that without cutting defense spending, Social Security or Medicare, which Trump has promised to protect, and without defaulting on debt payments, the portion of the budget available to cut is less than $3 trillion. Musk’s proposal would require cutting about two-thirds from all the other government programs, from running federal prisons to inspecting meatpacking plants, funding veterans’ benefits, and everything else. Few informed people in their right minds think this can be done.

The administrative state will survive, I trust. But it could come to function less on merit, expertise and political neutrality, and more on partisanship, cronyism and favoritism. That’s how it worked in the bad old days of the “spoils system,” before the Pendleton Act of 1883 reformed it. To me, the attack on the administrative state belongs in the same category as attacks on other democratic institutions—the justice system, the free press, public schools and universities. We need to improve them, yes, but also defend them against destruction by autocrats and oligarchs. Here the Democrats have a responsibility to claim the center and defend it against the radical right. Assuming the more radical designs of the Trump campaign and Project 2025 prove unworkable, the administration may have to settle for smaller victories—a few deportations here, a few new tariffs there, and a few federal regulations eliminated. That may be enough to satisfy many Trump supporters, especially when they are spun as great victories.

The party of the working class?

Maybe the most we can hope for is that the most radical members of Trump’s administration are held at bay, prevented from doing too much damage to the federal government’s ability to carry out its democratically legislated missions.

But where does that leave the working class, who would like to see their government do things that actually improve their economic position? Since Trump won 56% of non-college-educated voters, many pundits have suggested that Republicans are now the party of the working class, possibly a crippling blow to Democrats going forward.

To that, I say that Republicans need to earn that designation by delivering solid economic gains to the working class, as Democrats did from the 1930s to the 1960s. While Trump at least talked about struggling working-class families, he did not do much to address their economic concerns with relevant policy proposals. What he did very effectively was scare them with stories of exaggerated social threats like immigrant crime waves. (Immigrants do not commit more crimes; their crimes just get more publicity.) He took advantage of the fact that so many of his supporters are “low-information” voters who have trouble figuring out who’s telling the truth. Researchers have found that the less people follow the news, the more likely they are to support Trump.

Once he is back in office, President Trump will need a positive program to expand working-class opportunity, or his administration may be no more popular than Biden’s. The working class may benefit slightly from a new round of tax cuts, although most of the gains are likely to go to corporate stockholders and other wealthy Americans. But Republicans may try again to offset those tax cuts with cuts to safety-net programs on which working-class and poor families depend, such as subsidized health insurance. Trump and his health-care appointees are no fans of Medicaid or the Affordable Care Act.

I would be very happy if Republicans, despite their track record, would come up with a formula for sustainable, broad-based economic growth. If not, working-class voters will have supported them in vain, and the political center will remain up for grabs.

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Posted by Ed Steffes

What’s in a Sign?

October 24, 2024

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As I drove into my polling place to perform my civic duty yesterday, I noticed an interesting series of campaign signs. Each sign made one of these comparisons:

  • Trump: Lower taxes/ Kamala: Higher taxes
  • Trump: Low prices/ Kamala: High prices
  • Trump: Secure borders/ Kamala: Open borders
  • Trump: Safety/ Kamala: Crime

I was struck by how succinctly these signs declared the superiority of candidate Trump over candidate Harris, but also how misleadingly they stated the issues.

Call me old-fashioned, but I like a sign that simply announces the name of the candidate one supports, and maybe a brief slogan to capture the spirit of a campaign: Something like “Reagan—Morning Again in America,” or “Obama—Change We Can Believe In.” Trying to compare two candidates with pithy one-liners is a challenging task, even if a campaign is trying to be fair. For a campaign with no concern for facts, it is a public disservice, a kind of democracy malpractice.

Why, by the way, is Donald Trump “Trump,” while Kamala Harris is “Kamala”? The only reason I know for Trump to call his opponent by her first name and deliberately mispronounce it when he says it, is to make Harris sound vaguely foreign, as if her ancestry was somehow disqualifying. Trump tried to do the same thing to Barack Obama by emphasizing his middle name—Hussein—and promoting the “birther” conspiracy that he was born in a foreign country. One more way of dividing the country into us and them.

For each of the above comparisons, a lot of facts come to mind that don’t fit neatly on a campaign sign. Here are a few of them.

“Trump: Lower taxes/ Kamala: Higher taxes”?

To the extent that this is true at all, it is true mainly for corporate taxes. Trump’s 2017 tax cut lowered the corporate tax rate from 35% to 21%. He would lower it further, to 15%, for companies that make their products in the United States. Harris would increase the corporate rate to 28%, but give some tax breaks to small businesses.

Regarding individual taxes, Harris wants to shift the tax burden toward the rich, by raising taxes only on incomes over $400,000 a year. She would reduce taxes on others by increasing the child tax credit and the earned income tax credit. Trump wants to make permanent the 2017 tax cuts whose benefits went primarily to the rich. If he were to adopt the flatter tax rates recommended by Project 2025, the Republican blueprint for a new administration, the tax burden would be shifted even further from the rich to the non-rich. (See my analysis here.)

Trump’s tariff proposal is a tax on imports, in effect a tax on corporations with global supply chains. Economists expect that it would raise costs by several thousand dollars for the average household when those costs are passed along to consumers.

Taken together, Trump’s tax proposals would result in another massive loss of revenue for the federal government and add trillions to the national debt. Economists say that Harris’s proposals would have a much smaller impact, but they would also give people more in tax reductions than they take back in tax increases. To summarize her plan as “higher taxes” is incorrect.

“Trump: Low prices/ Kamala: High prices”?

This makes sense only if we blame Harris for the spike in inflation that occurred shortly after Biden and Harris took office. The factors contributing to that spike were already developing, however. Both the Trump and Biden administrations stimulated economic demand to combat the Covid recession. Meanwhile, Covid was disrupting supply chains, and the war in Ukraine was interrupting the supply of oil. Higher demand + Lower supply = Inflation. Although businesses rarely lower prices once they have raised them, the overall rate of inflation has now dropped back to a more normal level.

The only proposal I have heard from Trump to control inflation is to increase the supply of energy, something the country is already doing. He only seems to care about more oil drilling, not the cleaner forms of energy Biden and Harris have been promoting. Trump’s tariff proposal would raise prices, as noted above.

Harris has proposals to increase the supply of housing and combat price gauging in the food industry. She also proposes to ease costs for first-time home buyers with a tax credit.

“Trump: Secure borders/ Kamala: Open borders”?

Trump’s plan for securing our borders is to close them to asylum seekers, U.S. and international law notwithstanding. He would also place millions of migrants already here in detention camps and then deport them. As far as I know, he makes no exception for those here legally, pending a hearing on their asylum cases.

Trump helped kill the bipartisan immigration reform law that Congress was close to passing earlier this year. It contained some tough provisions on border security: “close loopholes in the asylum process, give the president greater authority to shut down the border and limit parole of migrants” (The Washington Post). At that point, it was Trump who seemed to want the border kept open so he could run on the issue this year. Although President Biden would have preferred a legislated solution, he reduced border entries by executive action when the reform bill failed.

Contrary to the campaign sign, Harris does not support open borders. Like most Americans, she does support some path to citizenship for selected migrants. She also says she would sign the bipartisan reform bill that Trump killed.

“Trump: Safety/ Kamala: Crime”?

Both candidates supported—and Trump signed–the First Step Act, a federal criminal justice reform bill generally described as shifting the emphasis from punishment to rehabilitation.

Trump’s main proposal to reduce crime is to deport immigrants, whom he falsely accuses of committing more crimes than native-born Americans. (Actually, the immigrant crime rate is lower).

Given the rather obvious connection between this country’s exceptionally high rate of gun violence and its exceptionally permissive gun laws, any sensible discussion of crime should include some discussion of guns. Trump has sometimes expressed support for gun-safety measures such as universal background checks, but he refused to support them as president. Harris supports universal background checks and red flag laws.

Associating Harris with crime in general is rather silly. Crime rates have generally fallen during the Biden-Harris administration. Harris spent much of her career as a criminal prosecutor, while Donald Trump is a convicted felon. Harris has demonstrated far more regard for the law and the constitution than her opponent.

These kinds of campaign messages are traps for the unwary and uninformed, who make up a disturbing proportion of the electorate. I am sure that some Trump voters know exactly what to expect from him, whether they are corporate executives wanting lower taxes or struggling workers who see immigrants as standing in their way. But the many voters who expect him to create a stronger economy with lower inflation and less crime are likely to be disappointed. Most economists believe that Trump’s deportations and tariffs are more likely to lower GDP and bring on a recession.

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Posted by Ed Steffes

Lucky Loser (part 3)

October 11, 2024

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As of 2003, according to Buettner and Craig, Donald Trump was personally wealthy, thanks mainly to having received his share of his father’s fortune. But his casino business was still losing money, “thanks to interest payments on the $1.7 billion in bonds and loans that Trump had already loaded on the company’s back.” With the business on the verge of bankruptcy, his image as a superior businessman could have taken a big hit. Instead, it got a powerful boost from an unexpected source.

(Non-)reality television

Mark Burnett, the creator of the “reality TV” series Survivor, wanted to do a show about young entrepreneurs competing in the urban jungle of corporate America. The premise of The Apprentice would be that each season’s participants would take on a business project and compete to win Trump’s favor and an apprenticeship with his company. Trump would get $50,000 per episode and half the show’s profits, just for playing himself. Of course, playing himself meant pretending to be a greater success than he really was. He introduced himself to the viewing audience by claiming, “I’m the largest real estate developer in New York…Now my company is bigger than it ever was. It’s stronger than it ever was.”

Trump’s offices in Trump Tower were too shabby for the image the producers wanted to create. He happily charged them over $440,000 a year to rent a vacant office, where they created a lavish, 1,520-square-foot boardroom.

In addition to the show’s advertising revenues, it made millions from “brand integration” deals. Corporations like Procter & Gamble, Estée Lauder, Hanes and Burger King paid to have their products featured in the series. Prospective apprentices would compete to develop marketing plans for a new toothpaste, cologne, or line of shirts. Half of those millions went to Trump.

Selling the name

The original version of The Apprentice aired from 2004 to 2010. (Trump also starred in another version, The Celebrity Apprentice, until he became a candidate for the presidency in 2015.) During those years, Trump also embarked on his “most profitable business.” Instead of building and managing properties himself, he licensed his name to be used by those who did.

In 2004, he licensed his name to a group planning to build a fifty-two-story apartment building in Tampa. They offered several million dollars for that privilege, to be paid to Trump whether or not the project was actually completed. Two years later, the developers discovered that the ground could not support the planned structure without expensive redesign. The project collapsed in a flurry of lawsuits the following year.

By 2006, Trump was licensing projects in numerous states and foreign countries. He was moving beyond real estate to brand a line of furniture, a travel agency and a mortgage brokerage. Buyers were often attracted because the Trump name suggested that he stood behind the project or product. “Trump typically lied or fuzzed the fact that he did not own the projects and was not the developer.” In the case of the Tampa building, he falsely assured buyers that he owned “a substantial stake” in the project. Buyers who paid a 20 percent nonrefundable deposit to reserve a unit lost their money when the project failed.

Trump made over $100 million from licensing deals over seven years, but forty of his licensed projects were never completed. “Trump played it all for the short term, risking the reputational damage that would wreck the value of his name to other businesses.”

Because Trump “took this easy money without performing any due diligence on the people paying him,” his name became associated with some shady enterprises. The American Communications Network was accused of being a pyramid scheme, since the incomes of its sales reps seemed to depend on recruiting other reps willing to pay an entrance fee. Trump got $8.8 million for his endorsements, including a video in which he assured the reps, “We do a lot of research on companies before we agree to do something like I am doing for you.” When the company got in trouble, he denied knowing much about its operations.

When a promoter who had never worked in education asked him to brand an educational program, Trump decide he wanted a major ownership share as well. Trump University started out as an online program, but soon transformed into a series of in-person real estate seminars. It did not issue degrees or meet state licensing requirements for a real university. Most of the instructors had experience in sales, but limited knowledge of the real estate business. Their main job seems to have been to talk students into paying for additional seminars, which many students found superficial and unhelpful to their career prospects. The promotional materials claimed that Trump had “handpicked” the instructors, but in fact he never met them. After about five years of operation, and after being sued by the State of New York and many students, Trump University shut down. Trump later settled those suits for $25 million.

More business failures

While he was raking in money from playing a businessman on The Apprentice and licensing his name to other businesses, Donald Trump’s own businesses continued to fail. After his casino company went through a series of bankruptcy proceedings, he resigned from its board of directors. At that time, “he notified the board, and then the Securities and Exchange Commission, that he had ‘determined that his partnership interests are worthless and lack potential to regain value’ and was ‘hereby abandoning’ his stake.”

Even here, he was lucky to be able to take advantage of tax legislation intended to help businesses recover from the Great Recession. “The recession recovery bill allowed him to use those losses to request a refund of every dime in federal income taxes he had paid on the rush of cash from The Apprentice and related licensing deals for 2005 through 2007—a total of $70.1 million.”

During this period, Trump was also attempting another building project of his own, a ninety-two-story tower in Chicago. He financed it with $770 million in bank loans and $89 million in cash. Once again, he underestimated costs and overestimated revenue. When he was unable to make his loan payments, he sued the banks in hopes of getting the loans canceled, making the dubious argument that the recent financial crisis qualified as a “natural disaster.” When the case was settled, Trump paid only $99 million of the $385 million he still owed. Strangely, a new division of Deutsche Bank lent him the $99 million to pay off the other division of the same bank that he had sued!

Since the 1990s, Trump had been investing in golf courses, despite the declining profitability of the sport. Now he acquired new courses in Florida, Scotland and Ireland. In most of these, he had trouble making enough money to offset his expenses.

In 2012, the Trump Organization signed a lease to renovate and manage the Old Post Office in Washington, DC. It reopened as the Trump International Hotel in 2016. When it proved to be unprofitable, it was sold to the government of Kuwait in 2022.

Buettner and Craig summarize:

The last two major developments of his career, his apartment and hotel tower in Chicago and the hotel in Washington, as well as his three most recent golf courses in the United Kingdom, had all been financial failures that required constant infusions of cash.

To meet his need for cash, Trump sold the property he had inherited from his father’s estate for $177.3 million. The authors call this “a massive watershed inheritance capping a lifetime of parental support.”

Saving Trump from himself

Donald Trump will go down in history as one of the country’s most fascinating figures. On the one hand, he was a poor business manager whose real estate enterprises usually lost money. On the other hand, he was a rich man who was hailed as a business genius and supported for President of the United States by almost half the country (not quite achieving a majority of the popular vote in 2016 or 2020). Lucky Loser describes the many forms of help he needed to pull all this off.

First, he had a father with a successful career in real estate. Fred Trump not only passed on to Donald property worth hundreds of millions of dollars, but allowed him to claim credit for more of the family’s wealth than he had created.

Donald also received hundreds of millions in business loans from bankers, and he continued to find lenders even after many of his projects had already failed.

Trump relied on business partners whose companies were more successful than his. He built two of his rare successes, the Grand Hyatt and Trump Tower, in partnership with Hyatt and Equitable, respectively. In one case, he benefited financially from decisions he had no part in. The Hong Kong company that took control of Trump’s troubled West Side Yards project eventually sold it to buy other properties, which were in turn sold. Although Trump tried to stop these sales, he was lucky not to succeed, since he ended up getting $100 million of the proceeds. “Despite Trump’s efforts, much of his losses on businesses he ran would be covered by a windfall from a business that was not subject to his judgment.”

Trump also had the good fortune to burst on the real-estate scene in the 1980s, when the country was experiencing a wave of enthusiasm for money-making.

The adult Donald Trump and the Forbes list [of the 400 wealthiest Americans] arrived holding hands at the dawn of a broad cultural shift in America. The syndicated television show Lifestyles of the Rich and Famous would soon debut, ushering in an era of “wealth porn,” a voyeuristic celebration of money and its trappings. he embraced the guiding ethos of the moment: great wealth, or at least the appearance of great wealth, means supremacy in all things.

Then came The Apprentice, the product of an entertainment industry willing to celebrate that ethos. It turned Donald Trump into a shining symbol of the marriage of money and merit. He became the embodiment of the philosophy that “greed is good.”

Here’s the part that may sting most in a country that sees itself as history’s greatest meritocracy: Good things happened to Donald Trump. He did not earn most of those good things. He was born. He was discovered by a revolutionary television producer. And he was pushed into an investment against his will. And from those three bits of good luck came the equivalent today of more than $1.5 billion. That sort of tailwind could paper over a litany of failure and still fund a lavish life.

And even that is not all. The authors suggest that the “final lucky stroke of Trump’s very lucky life” was the rise of right-wing media.

During his lifetime, a new media ecosystem had come into existence, one eager to explain away evidence of any Republican president’s wrongs and endlessly magnify the thinnest assertion of any Democrat’s missteps. That ecosystem evolved from talk radio in the 1980s and gained dominance on cable television in the 1990s with the launch of Fox News…In this virtual world, no criticism or finding of fault against Trump could be based on merit. It was all part of an orchestrated attack by bad actors.

Buettner and Craig make a good case that Trump is a “lucky loser” indeed. But I still want to make a distinction: Luck is something that happens to a person; lying is something that is done by a person. Trump has been lucky to have right-wing media to propagate his lies. But he actively promotes the lies himself, such as the lie that he won the 2020 election, or that immigrants commit crimes at a higher rate than people born in the United States. It is a symbiotic relationship. The main point of it, I think, is to get working-class people to vote Republican, so that corporations and the wealthy can have more tax cuts, while lesser folk blame their problems on someone else.

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Posted by Ed Steffes

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