The question posed by Donald Trump’s entry into politics, when he was first elected US president in 2016, was: ‘How will a person whose entire life has been in business fare in the political arena?’ The answer during his first term was: ‘Not well’. As he acknowledges himself, he came into Washington with no established relationships and was repeatedly attacked by both the main parties and undermined by his own bureaucrats. It led to a string of impeachments and a level of demonisation that was globalised in a way never seen before. Even his own military refused to carry out his orders to withdraw from Afghanistan and Syria.
When he decided to run for office again, the animosity continued. He was subjected to legal attacks and character assassination, the intensity of which was at times barely believable. There was also an actual assassination attempt that failed by millimetres.
Now that Trump has won again, the question about how a businessman will fare in Washington remains unanswered. But it is clear he is still very much shaped by his history in business. Many of the character traits that infuriate his enemies are typical of successful tycoons.
One such trait is his salesmanship and tendency for self-congratulation, which his critics interpret as narcissism. In fact, it is mostly performative. In effect, he is selling his policies in the same way that he would sell steak knives.
In another trait that might be described as tycoon-esque, Trump divides everyone into those who are inside the tent, the best human beings who ever lived, and those who are outside the tent, the worst human beings who ever lived. Indeed, the latter are so bad they are deserving of crude insults. Those inside the tent of course bought the sales pitch and those outside didn’t.
Additionally, there's his excessive admiration for other rich, successful people. Witness, for example how Trump heaps praise on Elon Musk. At the same time, like many wealthy business founders, he has a deep interest in ordinary people because they are his ‘customers.’ In that sense he is typical of his type. He may be a braggard, but he is also, supposedly, a good listener and conversationalist.
The suspicion is that some of the animus directed at Trump by the left is distaste for these business behaviours, which is ironic because those same people are often very good businesspeople themselves. Trump will certainly be more politically savvy this time around, but the question about how a lifetime businessperson will adapt to politics remains unanswered. It is hard to predict because another trait of successful business people is that they cannot be trusted to match their words and actions.
'His announcement that he would remove Federal bureaucracies from Washington to other locations around the country could be a signal of something much bigger: a massive reduction in the size of the administrative state.'
Only a vanishingly small number of wealthy businesspeople got to where they are because they scrupulously honoured their promises. Trump is not one of them. He was well known for not paying some of his building contractors, for example. Such slipperiness will not have gone away, which makes him all but impossible to read.
There are outlines, though. His announcement that he would remove Federal bureaucracies from Washington to other locations around the country could be a signal of something much bigger: a massive reduction in the size of the administrative state.
Businesspeople tend to hate regulation and being constrained by bureaucrats. As another presidential candidate and wealthy businessperson, Vivek Ramaswamy, has pointed out, a Supreme Court decision to overturn what was called the ‘Chevron defence’ has implicitly ruled a great deal of the legal apparatus in the U.S. invalid.
Most regulations in the U.S. are devised by unelected bureaucrats, not Congress. But under the Constitution, only the Congress can make laws. The removal of the Chevron defence means the U.S. can revert to having Congress as the sole legislator. That means it becomes possible to remove more than half the Federal government bureaucracy on the grounds that they no longer have any laws to administer. If that happens, or anything like it, it will be the biggest political and economic earthquake in a century – and a shock to U.S. business because so many are paid by government departments.
It is hard to believe something so bold would be achieved. But it is possible. There would, however, still be an elephant in the room: the U.S. defence and intelligence budgets, which together are about $US1.5 trillion a year. After the black budgets are taken into account, it may be closer to $US2 trillion.
In financial terms, the United States is a war machine with a tax base attached. To give some idea of the scale of it, the current US government debt is considered to be out of control at $US36 trillion. An inquiry by Michigan State University accountancy academics in 2017 found that $US21 trillion was missing. It forced the Department of Defence to start conducting audits, which have since regularly found that about half the money is ‘unaccounted for’.
Will Trump try to do something about that? Unlikely, although he is promising aggressive audits of government departments. But unless the US starts to cut its defence budget – Robert F Kennedy Jr has called for it to be slashed in half – the country will continue on its path towards economic and financial crisis.
David James is the managing editor of personalsuperinvestor.com.au. He has a PhD in English literature and is author of the musical comedy The Bard Bites Back, which is about Shakespeare's ghost.