Five rules for Trump’s transition
President-elect Donald Trump invented a new way to win a nomination and the presidency. But America’s anachronistic government structure is less open to innovation than the electoral process.
Five unwritten rules govern all presidents from the day they are elected. Successful presidents somehow learn them before winning the election or quickly intuit them. The failures figure them out too late, or never.
The five rules I derive in a book I will publish soon about Obama’s critical early decisions are: diagnose, look forward, prioritize and commit, persevere, and endlessly explain.
If Trump follows rule one, his advisers should inform the incoming president that the long, if tepid, recovery from the Great Recession may be nearing an end. It may be killed if the Fed and the markets raise interest rates. And that may be accelerated by a massive tax cut and spending increase in a quick reconciliation package. A recession within one or two years is not unlikely as matters stand right now.
To counter this possibility, macroeconomists and business leaders should be determining whether substantial and sustained investment in privately owned infrastructure will generate economic growth at 3 percent to 4 percent. That is what the Trump presidency will need in order to achieve full employment and increasing wages in an overall environment of rising interest rates.
The increasing strength of the dollar poses another problem. Trade deals take a long time to negotiate or renegotiate. But in a short time the country’s trade balance will worsen due to currency swings. America’s leading exporters actually would benefit from the TPP deal that the new administration wants to reject. A sound diagnosis of the situation will give the new president the options that exist.
To conduct his diagnosis of the economy, Obama named an experienced team of advisers before November ended. This group explained to Obama on Dec. 16, 2008, how and why the Great Recession had a 1 in 3 chance of turning into another Great Depression. Their detailed analysis caused Obama to select three antidotes to a crisis that Americans had not yet fully apprehended: Former Secretary of the Treasury Timothy Geithner’s recapitalization of banking without nationalization, Obama’s decision to save both General Motors and Chrysler, and the creation of a stimulus package a month before the inauguration.
Under rule two the new White House needs to specify with extreme exactitude what should be changed, from the rug in the Oval Office to the strands of the social safety net. Obama wanted a very different health care system and a new power platform for the economy. He wanted to end American combat in two countries, and to start no new ground wars. And he wanted unemployment to be below 8 percent by 2012. In strategic terms, a leader follows the second rule by creating an array of detailed choices.
As a CEO, Trump will recognize this rule as management by objective. Trump could aim for significant, continuous increases in the median standard of living. That choice would call for increased investment in productivity enhancing sectors. Not only power, communications and transportation, but also basic research and development should be amply funded. American businesses should get new incentives to increase capital expenditures and training for employees. Repatriating foreign profits is especially useful if it leads to more investment in plant, property, equipment and people.
The third rule is to commit irrevocably to the chosen objectives in a rank order of priorities. Some are suggesting the Trump administration may not send a budget to the Hill. Previous administrations have used the budget as a blueprint that describes goals in much the same way that Trump plans his spectacular hotels. Others are saying Congress, and not the White House, will decide the sequence of legislation. That abandonment of executive authority does not seem in character for this president, nor has any other incoming president in memory relinquished the opportunity to prioritize the agenda.
Trump’s choices include comprehensive tax reform, infrastructure spending, health care reform (again), moving from government benefits to individual savings for retirement or education, renegotiating trade or other foreign policy agreements, nuclear proliferation, terminating the move to clean power or various other measures. As a CEO, he will know that if he does not prioritize and commit, then luck more than plan will determine his legacy.
The fourth rule is perseverance. Obama famously stuck with health care reform until he got his law passed. Similarly, he pursued banking reform to a conclusion. Bill Clinton pushed until November 1993 to pass his Omnibus Budget Reconciliation Act. George W. Bush insisted on his significant changes in the tax law. Congress maddens all White Houses, but all presidents should obey rule four: propose, push and plead for your goals even while the current of events threatens to drive you off course.
Rule five is that the president has to explain endlessly the narrative of his presidency. Bill Clinton excelled at this; George W. Bush not so much. Obama was less successful than his rhetorical gifts implied. As adviser David Axelrod foresaw, bailing out banks and huge spending was “tough to message.”
Trump deserves credit for stage managing the last two years in an unprecedented and obviously effective way. Even if Trump’s Twitter tactics prove durable, now he has to stay on stage for a long time, without a single opponent to play against. That requires a new narrative.
Like laws of physics, these five rules apply to every president whether the incumbent knows them or not. They stem from the structure and function of the federal government. Ignoring them can leave any president, even one from outside the normal political tradition, wondering why nothing turned out as hoped.
Reed Hundt was a member of the Obama-Biden Transition Team, chairman of the Federal Communications Commission, and author of a forthcoming book from which this piece has been adapted, “In the Long Run: Obama’s Five Critical Early Decisions.”