Monday, 23 January 2017

Trump's inaugural address better than Obama's

Trump's inaugural address was also his first statement as a holder of political office or, indeed, an employee of the State.
His words are interesting because they derive from seventy years of life experience, not one single one of which was financed in any way by a Govt. paycheck- something unique in American history.

Not surprisingly, he focused his ire on what economists call 'agent principal hazard'- i.e. the temptation for people in Govt. to do what is in their own interest not what is in the interest of the people who pay their salary- and on 'rent seeking' by elites. In particular, Trump as an old fashioned 1980's style property developer- think Tom Wolfe's Charlie Croker from 'A Man in Full'- focuses his ire on the revolving door between K Street and Wall Street- Politics and footless Financial Capital.

Thus he says- 'For too long, a small group in our nation's Capital has reaped the rewards of government while the people have borne the cost. Washington flourished -- but the people did not share in its wealth. Politicians prospered -- but the jobs left, and the factories closed.

'The establishment protected itself, but not the citizens of our country. Their victories have not been your victories; their triumphs have not been your triumphs; and while they celebrated in our nation's capital, there was little to celebrate for struggling families all across our land.'

By contrast, Obama, who graduated in '83, took the shift from 'bricks and mortar' patriarchal capitalism to abstract mathematical financialization for granted. It did not occur to him that a 'New Deal' was required to ensure the incentive compatibility of this greatly changed Economic system. More fundamentally, he did not think the Government had done anything greatly wrong or greatly right. Rather there was some mystical process by which the great mass of the people either achieved greatness or didn't achieve greatness but had a jolly good try anyway.

'In reaffirming the greatness of our nation we understand that greatness is never a given.  It must be earned.  Our journey has never been one of short-cuts or settling for less.  It has not been the path for the faint-hearted, for those that prefer leisure over work, or seek only the pleasures of riches and fame.  Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long rugged path towards prosperity and freedom. 
For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.  For us, they toiled in sweatshops, and settled the West, endured the lash of the whip, and plowed the hard earth.  For us, they fought and died in places like Concord and Gettysburg, Normandy and Khe Sahn. 

Concord- yes!
Gettysburg- Amen!
Normandy- Hallelujah!
Khe Sahn? 
By mentioning Khe Sahn, Obama is saying that the American masses are stupid.
Whether the fight on the right or wrong side is a matter of chance.
Emerson wrote- 
The German and Irish millions, like the Negro, have a great deal of guano in their destiny. They are ferried over the Atlantic, and carted over America, to ditch and to drudge, to make corn cheap, and then to lie down prematurely to make a spot of green grass on the prairie.
In other words- American Hegemony was Emersonian Racial Fate.
A dark and inscrutable mystery.

By contrast, Trump- who could actually have fought and died at Khe Sahn- says clearly and simply that things like Khe Sahn are the result of corrupt rent-seeking in Government.

'Americans want great schools for their children, safe neighborhoods for their families, and good jobs for themselves. These are the just and reasonable demands of a righteous public.

'But for too many of our citizens, a different reality exists: Mothers and children trapped in poverty in our inner cities; rusted-out factories scattered like tombstones across the landscape of our nation; an education system flush with cash, but which leaves our young and beautiful students deprived of knowledge; and the crime and gangs and drugs that have stolen too many lives and robbed our country of so much unrealized potential.

'This American carnage stops right here and stops right now.

'We are one nation -- and their pain is our pain. Their dreams are our dreams; and their success will be our success. We share one heart, one home, and one glorious destiny.'

Trump is saying the Government could have addressed each problem he mentions.
He is furious that successive Governments failed to do so because of their own 'rent seeking'.
Trump says no to more 'American carnage'
Obama says Khe Sahn is morally the same as Gettysburg because the Masses are stupid.
All is the fault, or else the favour, of an inscrutable Emersonian Racial Destiny.
The Government is not responsible for anything.
Obama said- 'Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life.  They saw America as bigger than the sum of our individual ambitions, greater than all the differences of birth or wealth or faction.
This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions -- that time has surely passed.  Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.
In other words- just go back to work and stop bothering me.
As Kennedy said, 'ask not what I can do for you but what you can do for me.'

By contrast, Trump thinks the Government is doing a bad job.
It has enriched its masters at the expense of those whom they were meant to serve.
The Government is the Agent of the people. Nothing more.
It must always put their interests first.
Obama's mystical belief in Emersonian Racial Destiny prevented him from tackling rent-seeking.
Trump, cavil as we may at the crudity of his rhetoric, is correct to say the American Govt. must put Americans first and do so in a rational manner. That is what the Constitution mandates. Policy Space is one dimensional if it follows the rule that only Costs and Benefits to citizens matter. The moment, Policy Space seeks a Universal domain it becomes multi dimensional and subject to 'agenda control' type rent-seeking manipulation. Trump's 'America First' rule is the only way to avoid 'McKelvey Chaos'. 
Hollywood, which has so railed against Trump, is responsible for stoking fears that America's borders are unsafe. Mexican Cartels, it appears, have super-powers and can murder and maim with impunity though, no doubt, good old Arnie Schwareznegger can beat them back with a blizzard of bullets till the credits roll.
Trump, by contrast, says that it is the Government, not some Emersonian Race Hero with an Austrian accent who should be doing the job. 
'For many decades... we've defended other nation's borders while refusing to defend our own; and spent trillions of dollars overseas while America's infrastructure has fallen into disrepair and decay.
We've made other countries rich while the wealth, strength, and confidence of our country has disappeared over the horizon.
One by one, the factories shuttered and left our shores, with not even a thought about the millions upon millions of American workers left behind.
The wealth of our middle class has been ripped from their homes and then redistributed across the entire world.
But that is the past. And now we are looking only to the future. We assembled here today are issuing a new decree to be heard in every city, in every foreign capital, and in every hall of power.
From this day forward, a new vision will govern our land.
From this moment on, it's going to be America First.
Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.
I will fight for you with every breath in my body -- and I will never, ever let you down.
America will start winning again, winning like never before.
We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams.
We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation.
We will get our people off of welfare and back to work -- rebuilding our country with American hands and American labor.
We will follow two simple rules: Buy American and hire American.
We will seek friendship and goodwill with the nations of the world -- but we do so with the understanding that it is the right of all nations to put their own interests first.
We do not seek to impose our way of life on anyone, but rather to let it shine as an example for everyone to follow.

Trump has come out openly as a Protectionist. Should we be preparing ourselves for another Smoot Hawley, a third Mexican Repatriation (there was one under Eisenhower, though it is the Depression Era one most people remember) and even perhaps the internment of hyphenated Americans suspected of sympathising with an Enemy power?
No necessarily.
It is enough that Expectations change because that by itself changes incentive compatibility.
Still, don't hold your breath.

No comments: