How Donald Trump could really make America great again

Critics of America’s newly inaugurated 45th president were elegantly castigated by Silicon Valley billionaire Peter Thiel for having taken Candidate Trump literally but not seriously, while his voters had taken him seriously not literally. This means that while his pledge yesterday that “our country will thrive and prosper again” should be taken seriously, he ought still to be open to advice on how to go about it.

The first advice must be to think long-term. This may not come naturally to America’s Tweeter-in-Chief with his thirst for daily proofs of popularity and power, but president trump’s earlier pledge to rebuild the country’s infrastructure was a welcome sign that he realises restoring greatness will take time.

Few, if any, projects to modernise roads, bridges, airports and so on will be benefiting the US’s productivity even by the time he seeks re-election in four years, but the idea is still an excellent one that americans should insist on being implemented and that European governments should seek to emulate.

The second advice is to think in a bipartisan way. Mr Trump rightly sees himself as a rewriter of political rules, so it makes no sense to take an us-and-them approach to party politics.

A fine example can be found in California, a state he will need to do better in to win re-election in 2020. Here a group of luminaries from all sides of politics and business, the “Think-Long Committee” — assembled by a private think-tank, the Berggruen Institute — has been influential in conceiving and gaining support for reforms, first for a “rainy-day fund” and revamping the dysfunctional ballot-initiative process, and now for broadening the state’s tax base.

This approach almost worked for President Barack Obama when his Simpson-Bowles commission on fiscal reform in 2010 narrowly failed to achieve consensus. Mr Trump now has the chance to go one better, and would have a greater chance of success if he could do more than Simpson-Bowles in reaching beyond Congress for participation, as the California committee has, to build public as well as political support.

The third advice is to take a harder and more sober look at America’s endemic problems. Mr Trump is right when he says there is a lot to be fixed, but wrong when he implies that it is all about wrenching back jobs from Mexico and China. It is about flaws in America’s own economy, society and public policy.

My educational Wake Up Foundation, a charity dedicated to a militant but rigorous liberalism, has just published a composite statistical indicator of how well western countries are shaping up in the face of the long-term trends of this century, including ageing demographies, technological innovation, the knowledge society and globalisation. On the Wake Up 2050 Index, the US ranks a shocking 23rd out of the 35 Organisation for Economic Co-operation and Development members ranked.

Why? One big reason is seemingly non-economic: health. Despite a superficially favourable demography, with higher fertility rates and slower ageing than in Europe, and despite spending 18 per cent of gross domestic product on healthcare, the US throws away its advantage through high levels of obesity and relatively poor health-adjusted life expectancy. A hasty move to abolish Obamacare, as many Republicans favour, would just make things worse.

That inefficient health system combined with poor health contributes to the country’s recently poor record in productivity growth. Also, however, the US is much less good than it thinks on innovation and knowledge, despite standing proudly at technological and intellectual frontiers.

Inequality of education, income and gender makes the US worse than other countries — such as top-ranked Switzerland or even Canada, Japan and Germany — at dispersing that innovation and knowledge through the economy and society.

When president trump said yesterday that “we are one nation and their pain is our pain” he was promising to help “America’s forgotten”. This fits with research by Nicholas Eberstadt of the American Enterprise Institute showing that 7m prime working-age men are missing from employment, as well as data that shows female labour-force participation rates are now higher in Japan than in the US. If those forgotten people are never to be ignored again, as he promised, the reasons why they are on welfare or in the illegal economy need to be understood.

The fourth advice is that Mr Trump’s team should also study two excellent, but never implemented, reports by Mr Obama’s Council of Economic Advisers: one, in 2015, showed how state-level licences for jobs now ensnare a quarter of workers in red tape that cripples inter-state mobility of labour as well as freezing out millions of former felons; the other, just last year, showed that far from being a hotbed of competition, in American business power has actually become more more concentrated and oligopolistic, at the expense of consumers and workers.

The opportunity is clear for the 45th president to emulate the 26th, Theodore Roosevelt, in healing the US’s latest “gilded age” by boosting antitrust enforcement, tackling inequality, inefficiency and unfairness, and confronting excessive corporate and financial power. He could thereby make America great again, if he takes advice seriously. Any idea that he might, like Teddy Roosevelt, “speak softly while carrying a big stick” ought not to be taken literally, however.

By Bill Emmott

This is a slightly expanded version of the article by Bill Emmott published by the Financial Times on January 20^th 2017