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The state of the American Union

President Donald Trump’s annual State of the Union speech of February 5 carried a 75% approval rating, according to CBS NEWS. An enormous majority felt that the president was trying to unify the country.[1] This positive reception by the U.S. mainstream media was most unusual, as was the verdict of so many viewers. Indeed, the President looked measured and presidential, and he demonstrated compassion.

The irony is that a president who has done so much to divide and incite gender, ethnic and sexual preference and racial resentment with a fusillade of tweets is now trying to unite a divided land. U.S. presidents playing to divide is nothing new: the Obama Administration was masterful at hyping differences and creating a culture of victimisation. Nonetheless, in America there is much to unite right now.

Increasing disparities of wealth are well recognised as a by-product of globalisation, which has benefited the top 1% in many countries. The crash of Wall Street in 2008 and the ensuing recession destroyed capital in 401ks and Individual Retirement Accounts (IRAs), the two most common vehicles used to save for retirement. Millions of millennials saw their parents economically damaged. With average student debt now more than $35,000[2] – and much more than that for top business and law schools – these work force entrants want protection and debt forgiveness.

Indebted millennials, combined with minorities and illegal immigrants, are an attractive coalition for the Democratic Party. Its progressive left wing knows that socialism, while an abject failure from Venezuela to Cuba to North Korea to the U.S.S.R, nonetheless sells nicely and entices with a tapestry of benefits.

Bernie Sanders, the Brooklyn émigré and now angry senator from Vermont, the populist utopia of Ben & Jerry’s ice cream, is in the vanguard of socialism. He is joined by presidential candidates and others hyping resentment, such as Elizabeth Warren, given the moniker ‘Pocahontas’ by President Trump and charged with claiming to have Native American antecedents to benefit her law career; Senator Cory Booker, who proclaimed himself a martyr like Spartacus; and the icon of both pluck and vacuousness, Representative Alexandria Ocasio-Cortez who wants a 70% marginal tax on the wealthy. Expressing praise of the Ocasio-Cortez vision of redistribution is Senator Kamala Harris, a leading contender for the Democratic Party’s nomination for president.[3]

Harris is a former attorney general of California, with its huge contingent of 55 delegates of the Electoral College, with 270 needed to win the presidency. Harris comes across as highly intelligent, articulate and electable – with a Tamil and Jamaican heritage. Harris advocates single payer Medicare for everyone, which disenfranchises private insurance and gives government control to about 18% of the GDP – indeed socialised medicine.

While the so-called progressive left is committed to diversity, it is remarkably intolerant of views other than its own. An example is the effort of Howard Schultz, former CEO of Starbucks and a lifelong Democrat, to determine whether he should run for president as an independent. Elizabeth Warren immediately found the idea intolerable. Should the progressive left be the new face of the Democratic Party in the election of 2020, it could make House Speaker Nancy Pelosi look like the conservative economist, the late Milton Friedman.

Republican leaders in Congress have only modestly challenged what some see as a rampaging White House. Hostile tweets aimed at the intelligence agencies, Congressional leaders and cabinet officials, and erratic behaviour have, for months, given rise to questions about the mental stability of POTUS and conjecture about invoking the 25th Amendment.

These daily incendiary and unorthodox manoeuvres have served to discredit the presidency and obscure the good that President Trump has done, or the good that has been done on his watch, as cited by his supporters. Some examples of this are: the tax cut for corporate America, a sector disparaged and talked down to by President Obama; illegal immigration at a ten-year low[4] – reportedly caused by an improving Mexican economy, but nonetheless, on the watch of and to the benefit of President Trump; calling out Germany and others in NATO who have not contributed enough financial resources toward their security; the revocation of apologies of the Obama Administration; the mere fact that a meeting took place with North Korea’s Kim Jong Un; the recognition that the Iran nuclear agreement should have been tied to Iranian behaviour outside Iran; taking on China for its aversion to a rules-based order; and finally, historically low unemployment, a vibrant economy, and a generally strong stock market – although of late, hurt by the U.S.-China trade war and a recently aggressive Federal Reserve.

President Trump has not communicated these successes very well: as a businessman, he has surprisingly missed a strategic marketing or branding opportunity. Instead of hiding behind fragmented, truculent tweets, he should be holding dignified press conferences to present his record about what is working well.  He is not getting good advice on this, or if he is, he is not taking it.

While critics are distressed by President Trump for challenging the global architecture since the Second World War, perhaps it is time to rationalise such structures in the 21st century. Why should China borrow at below-market rates from the World Bank? Although talking is better than shooting, why should the U.S. support a UN that is a forum where illiberal democracies lecture the U.S. and Israel and seem to rule the roost? Why shouldn’t NATO live up to its own standard of spending 2.0% of GDP on defence? These are all good questions, but best not answered with bluster.

It is also dismaying to his critics that President Trump has withheld details of his interaction with President Vladimir Putin of Russia from his own cabinet and advisers. The president’s unorthodoxy and belligerence have alienated partners at a time when alliances are needed to address the aspirations of an increasingly aggressive China and Russia.

It is not possible to predict the outcome of the Mueller investigation and what its effect on President Trump will be. However, some observers believe that it will be up to the American electorate in 2020 to decide on President Trump’s continuing fitness for office. The ‘wild card’ will be a finding so detrimental that Republican Party leaders ask for his resignation.

In the particular context of India,[5] excellent relations continue through three Indian and three American administrations. The strategic ties that bind are: the strategic challenge of China, fear of Islamist extremism and the opportunity for import/export trade and direct investment. There will be operational disputes over visas, drug adulteration, global emissions, retrospective corporate tax policy, protection of intellectual property, and requirements for airline safety, for example. The press will sensationalise these issues and spin them as if there are dire differences – which is hardly the case.

While we live in a world connected by trade, capital, immigration and electrons, President Trump’s view is a departure from that of previous administrations as he will not tolerate unfair advantage being taken of the U.S.

President Trump has almost two more years to prove that he should be re-elected by a badly divided land. A strong economy, coupled with the measured, presidential approach of the State of the Union speech, might advance the national agenda.

Frank Schell is a business strategy consultant and former Senior Vice President of the First National Bank of Chicago, where he had an extensive international career.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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[1] Pinto, Jennifer De., Fred Backus, Kabir Khanna, and Anthony Salvanto, CBS News, Viewers approve of Trump’s first State of the Union address – CBS News poll, January 30, 2019 <https://www.cbsnews.com/news/viewers-approve-of-trumps-first-state-of-the-union-address-cbs-news-poll/>

[2] Friedman, Zack., Forbes, Student Loan Debt Statistics In 2018: A $1.5 Trillion Crisis, June 13, 2018 <https://www.forbes.com/sites/zackfriedman/2018/06/13/student-loan-debt-statistics-2018/#5e3b75b87310>

[3] Burke, Michael., The Hill, Kamala Harris praises Ocasio-Cortez: Her ideas ‘should be discussed’, January 9, 2019 <https://thehill.com/homenews/senate/424556-kamala-harris-praises-ocasio-cortez-her-ideas-should-be-discussed>

[4] Passel, Jeffrey S., D’Vera Cohn, Pew Research Centre, U.S. Unauthorized Immigrant Total Dips to Lowest Level in a Decade, November 27, 2018 <http://www.pewhispanic.org/2018/11/27/u-s-unauthorized-immigrant-total-dips-to-lowest-level-in-a-decade/>

[5] Schell, Frank., The American Spectator, The U.S. and India: Buddies in the Same Foxhole, June 10, 2016, <https://spectator.org/the-u-s-and-india-buddies-in-the-same-foxhole/>