In her 1969 book On Death and Dying, the Swiss psychiatrist Elisabeth Kübler-Ross famously described five stages of grief: denial, anger, bargaining, depression, and acceptance. After a tumultuous year in which the United Kingdom decided to quit the European Union and Donald Trump was elected President of the United States, many people have been left in a state of mourning. A deep sense of loss attends the realization that America might no longer serve as a pillar of global stability, economic openness, and social progress.
Bereavement follows no singular formula, of course, but as politicians, businesspeople, and citizens around the world grapple with our new age of uncertainty, they are experiencing some – or perhaps all – stages of grief. These sentiments are undoubtedly becoming more acute with each passing day of Trump’s incendiary presidency. With each new off-the-cuff tweet, executive order, and truth-challenged speech, it becomes increasingly unlikely that the international order or the global economy will come through the Trump era unscathed.
Worse still, there is no guarantee that an emotional reckoning will yield the practical solutions that the world needs to combat toxic populist politics. Over the past few weeks, Project Syndicate commentaries have shared insights that complement each of Kübler-Ross’s emotional stages. Considering them together may uncover a pathway through the anguish – and through the Trumpian chaos fueling it.
Although financial markets have (thus far) been giddy about, and easy marks for, Trump’s presidency, a point noted by the legendary investor Seth Klarman, Project Syndicate commentators are not in denial about what Trump will mean for world peace, stability, and prosperity. But some do caution against apocalyptic thinking, while others maintain hope that progress can still be made on some issues, despite the obvious dangers that Trump poses.
Michael Mandelbaum of the Johns Hopkins University School of Advanced International Studies, for example, argues that it is simply too early to deliver a verdict on what Trump’s presidency will mean for American democracy. “The loudly voiced fears of incipient (or actual) fascism are misplaced,” Mandelbaum writes. “The basic institutions of the American government have survived challenges stronger than any that Trump may pose.” In particular, Mandelbaum is reassured by Americans’ enduring commitment to such core features of representative democracy as “free, fair, and regular elections and the protection of political, religious, and economic liberty,” and he is confident that Trump will not be able to fundamentally undermine these institutions.
Ngaire Woods, the dean of Oxford’s Blavatnik School of Government, is as sanguine about Trump’s eventual international impact as Mandelbaum is about his eventual domestic record. While recognizing that the US, under Trump, “has begun to express a unilateralist creed, striking fear into the hearts of many countries worldwide,” there is plenty of time, she argues, “for Trump to adopt a different mindset, as President Ronald Reagan did 25 years ago.” Following the Latin American debt crisis, “Reagan began to recognize just how badly the US needed international institutions, and he moderated his positions.” Like Reagan, Woods believes that “Trump’s deal-making machine will soon hit hard constraints,” which could “enlighten him.”
One hopes that Mandelbaum and Woods are right. But, as Princeton University professor Peter Singer observes, Trump’s executive order banning refugees and others from seven predominantly Muslim countries, will provide not only an “early test of the extent to which US courts can restrain the Trump presidency,” but also of Trump’s fidelity to the rule of law. Will Trump accept the judiciary’s final ruling or spurn it and precipitate a constitutional crisis?
Although a sense of impending crisis has dominated the first weeks of Trump’s presidency, the economy isn’t reflecting this. Jim O’Neill, a former commercial secretary to the UK Treasury and former chairman of Goldman Sachs Asset Management, points to six indicators from the US, China, Germany, and South Korea suggesting that the global economy is now experiencing “the fastest growth in a number of years.” If so, the obvious question is why. “Some might say the trend is a result of policy decisions in the US and the UK, but far more would probably say that it is happening despite those decisions,” O’Neill says. “Unfortunately, there are no indicators that provide an answer to this question – only time will tell.”
Other Project Syndicate commentators see potential, if accidental, silver linings for the economy in Trump’s policy proposals. For example, Trump’s ballyhooed tax cuts and fiscal-stimulus measures will spur growth, and lead to inflation and a stronger dollar. And, as Harvard University’s Carmen Reinhart reminds us, “a steady dose of even moderate inflation will help to erode the mountains of public and private debt advanced economies have built up in the past 15 years or so.”
Likewise, Daniel Gros, who directs the Center for European Policy Studies, welcomes the potential for increased demand in the US and an appreciating dollar, not least because this will “boost growth and employment in a eurozone where economic dissatisfaction is generating political turmoil.” Moreover, Gros observes, “the gains will be most pronounced in the countries that most need them.” And Gavekal Dragonomics Co-Chairman Anatole Kaletsky also believes that Europe, strictly speaking, has cause for optimism. “An economic rebound and a period of strong financial performance” in the European Union, he writes, could be the “biggest surprise of 2017.”
But a Trumpian world is decidedly zero-sum, and the new president’s policies are causing as much fear and indignation abroad as they are in the US. The about-face in China’s reaction to Trump’s election is perhaps the starkest example of this. At first, China was very welcoming of Trump’s victory, says Claremont McKenna College’s Minxin Pei. “The advent of the Trump era – together with the Brexit vote in the United Kingdom and the rise of right-wing populism in other European countries – seems to herald the precipitous decline of liberal democracy’s ideological attraction.” But as “[d]e-globalization now seems to be a given” under Trump, this will likely mean “some decline in China’s potential growth,” which is always a deeply worrying issue for a Chinese leadership obsessed with potential domestic unrest.
“But what has China really worried are the worst-case scenarios,” Pei argues. “Economic interdependence between China and the US buffers their geopolitical and ideological rivalry,” he points out. “Should Trump make good on his threat to tear up trade agreements and unilaterally impose punitive tariffs,” however, “the existing global trading regime will unravel, with China as one of the biggest casualties.” Indeed, Trump has “convinced the Chinese leadership that he is itching for a fight.”
At the same time, argue the University of Hong Kong’s Andrew Sheng and Xiao Geng, the “strong dollar” that Trump’s presidency seems almost certain to bring about, at least for a time, “is not good for Asia.” Sheng and Xiao are convinced that an appreciating dollar will only exacerbate problems in emerging economies that are already “suffering from low commodity prices, which are being suppressed by reduced demand.”
Of course, Trump’s policies will also worsen the plight of many working-class Americans who voted for him. As New York University’s Nouriel Roubini notes, “the US dollar’s appreciation since the election could destroy almost 400,000 manufacturing jobs over time.”
But Trump’s “America First” nationalism will likely make him deaf to such arguments. As Harvard’s Dani Rodrik points out, Trump’s isolationist economic instincts are the opposite of what is needed in a US president. “[I]n most economic areas – taxes, trade policy, financial stability, fiscal and monetary management – what makes sense from a global perspective also makes sense from a domestic perspective,” Rodrik notes. “Economics teaches that countries should maintain open economic borders, sound prudential regulation and full-employment policies not because these are good for other countries, but because they serve to enlarge the domestic economic pie.”
But, rather than expanding the pie, Trump’s flirtation with protectionism will wreak havoc on the US and global economies. As J. Bradford DeLong of the University of California at Berkeley demonstrates, Trump’s “alternative facts” about supposedly job-destroying trade deals such as the North American Free Trade Agreement are belied by reality. According to DeLong, NAFTA is “responsible for only a vanishingly small fraction of lost US manufacturing jobs over the past 30 years.” DeLong, baffled by Trump’s proposed solutions to the plight of American workers, suggests that, “it is almost as if Trump’s economic strategy […] has been designed to reduce manufacturing employment in America further.”
Of course, the Trump administration will likely obscure this fact. As Simon Johnson of MIT Sloan observes, Trump’s press secretary, Sean Spicer, refuses even to “say what the unemployment rate is.” And Trump himself claims that the “true” unemployment rate is 42% – an absurdly inflated figure that factors in all Americans outside of the labor force, including students and retirees.
“If Trump insists on dispensing with fact-based decision-making,” Johnson warns, his base of supporters should expect to feel the “brunt of the pain.” When high inflation erodes their standards of living, “Trump will not blame his own incoherent and counterproductive policies for a stronger dollar,” DeLong predicts. “He will blame China and Mexico.”
But if Trump’s propagandizing fails, blue-collar Americans could join the opposition, which, according to Columbia University’s Jeffrey D. Sachs, will be led by American millennials. Sachs expects that younger Americans’ frustration will only grow in the coming years, as Trump pursues “corporate taxes and estate taxes that would further benefit the elderly rich (who are amply represented in Trump’s cabinet), at the expense of larger budget deficits that further burden the young.”
But, whereas Sachs is confident that a new political movement can render Trump’s presidency a historical footnote, “not a turning point,” Ian Buruma of Bard College is less optimistic. “Anti-Trump demonstrations in big cities will no doubt annoy the self-loving new president,” he writes. “But without real political organization, mere protest will go the way of Occupy Wall Street in 2011; it will peter out into ineffectual gestures.”
Beyond taking to the barricades, people and countries that are worried about Trump could invite the soi-disant dealmaker-in-chief to the negotiating table, or strike their own new deals without him. As Allianz Chief Economic Adviser Mohamed A.El-Erian puts it, “If Trump is to succeed in delivering the high growth and genuine financial stability that he has promised, he will need some help from abroad.” In particular, Germany, China, and Japan will have to join with the US in a coordinated pro-growth strategy, or investors holding low-return German and Japanese bonds will flee to higher-yielding US bonds. This, in turn, will further strengthen the dollar and undercut any gains from Trump’s economic policies.
Another option for ameliorating Trumpism (at least for Americans) is simply to cut the administration out entirely, through what the University of California at Berkeley’s Laura Tyson and Lenny Mendonca, Senior Adviser at the Presidio Institute, call “progressive federalism.” This strategy implies “the pursuit of progressive policy goals using the substantial authority delegated to subnational governments in the US federal system.”
Even if Trump is unwilling to address significant social and economic problems, Tyson and Mendonca remind us, state and local governments still can. Moreover, a large, economically powerful state such as California can resist the Trump administration, or extract concessions from it, “by refusing to carry out federal policies that it opposes.”
Internationally, US allies are also surely preparing to renegotiate certain elements of their relationship with America, and with each other. Given reports that Trump recently held an acrimonious phone call with Australian Prime Minister Malcolm Turnbull, former Australian foreign minister Gareth Evans was prescient when he wrote, just after the election, that his country’s government could no longer “take coherent, smart American leadership for granted.” To adapt to this new age of uncertainty, Evans advises Australia to “build closer trade and security ties with Japan, South Korea, India, and especially Indonesia, our huge near-neighbor.”
Echoing this point, New America CEO Anne-Marie Slaughter and Mira Rapp-Hooper of the Center for a New American Security believe that, rather than “falling into despair, America’s Asian allies should take matters into their own hands and start networking.” Slaughter and Rapp-Hooper propose a multilateral system – a form of diplomatic collective bargaining – whereby small US allies that could never individually confront the US instead band together to demand transparency and respect for their national interests.
Deeper multilateral integration will be equally important for US allies in Europe. Whereas the US was once known as the “indispensable nation,” former German foreign minister Joschka Fischer thinks that France and Germany will now have to share that title. With Trump having cast doubt on the US transatlantic security umbrella, Fischer predicts that the EU will be forced to see to its own economic and military affairs. Such an arrangement would entail a new “compromise on both sides of the Rhine,” whereby Germany leads on financial matters and France leads on security.
Still, even if America’s subnational governments and foreign allies can negotiate the troubled domestic and international waters of the Trump era, the world will still be adrift. And, as former Spanish foreign minister Ana Palacio cautions, “before attempting to chart a new course forward, we must make our way into calmer waters.” Unfortunately, there is no telling when that will be. For starters, Richard Baldwin of the Graduate Institute in Geneva points out that Trump’s economic-policy advisers have misdiagnosed the problem afflicting American workers by singling out trade, and not automation. Given that Trump’s advisers are desperately beholden to twentieth-century thinking, Baldwin laments, they will remain “intent on imposing tariffs, which will disrupt international supply chains, possibly lead to trade wars, and only hasten US industry’s shift abroad.”
To be sure, Trump has enjoyed a strong stock-market rally since his election. But Roubini believes that “the corporate sector’s animal spirits may soon give way to primal fear.” Investors, he argues, will soon realize that, notwithstanding the potential short-term gains, “the president’s inconsistent, erratic, and destructive policies will take their toll on domestic and global economic growth in the long run.”
A key cause for concern is Trump’s interference in the corporate sector, where he has already bullied firms like Carrier and Ford over their plans to offshore production. As Princeton University’s Ashoka Mody warns, Trump’s actions threaten to “destroy the norms and institutions that govern markets,” not least the “principles of transparency and fairness.” Assessing Trump’s protectionist and corporatist policy inclinations, Mody concludes that Trump “will erode the international institutions and rules that underpin the US and global economies, causing massive long-term damage.”
And yet, looking beyond the economic forecast, there are even more ominous clouds on the political horizon. After watching Trump’s first few weeks in office, former Polish finance minister Jacek Rostowski is convinced that the new administration “intends to roll back the progressive-egalitarian agenda” – and “not just in the United States, but globally.” Rostowski suspects that Trump’s nationalist chief strategist, Stephen Bannon, is “calling the political shots, and is more interested in building a permanent populist ‘movement’ than he is in getting Trump reelected.” If this turns out to be the case, the current American administration will have burned many bridges, at home and abroad, by the time Trump returns for good to his Manhattan penthouse.
Accepting that this worst-case scenario is a distinct possibility, worried people everywhere can at least push their leaders to start crafting a plan to deal with it. Kaletsky sees a silver lining in the fact that “Trump’s election could force Americans to recognize flaws in their own democracy” and “re-energize efforts to reform the Electoral College,” which has now, for the second time this century, elected a Republican president who lost the popular vote.
For Andrés Velasco, a former finance minister of Chile, there is much to learn from Latin America’s own history of economic populism. Over the past 75 years, a long line of leaders in the region, starting with Juan Domingo Perón in Argentina, “engaged in trade protectionism, ran large budget deficits, overheated their economies, allowed inflation to rise, and eventually suffered currency crises.” As Velasco notes, populists can sustain themselves for longer than one might expect, owing to an inconvenient fact that will have to be absorbed before Trumpism can be effectively confronted: “bad policies pay off, both economically and politically, long before they become toxic.”
Following the same logic as his Peronist predecessors, Trump will try to keep his base of supporters on his side by bestowing on them a sense of special status, and a number of handouts, that will come at the expense of others. Eventually, however, debt will pile up, the effects of his stimulus policies will peter out, and his post-factual spectacle will succumb to reality. The working- and middle-class Americans who voted for Trump will need someone to turn to when his mystique evaporates.
It may seem unlikely that Trump supporters, having imbibed populist attacks on the motives and authority of “experts,” would ever listen to academics. But perhaps they should. “Politicians, the media, and the public may have neglected the white working class,” argues Helga Nowotny, a former president of the European Research Council, “but social scientists did not.” Nowotny sees immense promise in ongoing investigations into the causes of inequality, the roots of terrorism, and countless other social and economic issues that weigh heavily on millions of Americans’ minds. This research could yield real solutions down the road, so long as honest, fact-based scientific analysis is supported and defended in the meantime.
On a similar note, Parag Khanna of the National University of Singapore views the rise of populism as “a symptom of political leaders’ failure to address voters’ economic grievances,” and proposes a new governance framework that connects citizens directly to committees of experts. According to Khanna, such a system of “direct technocracy” would ensure that citizens are regularly consulted, and that public policy is properly executed, using all available data and knowhow.
And Kemal Derviş, a vice president of the Brookings Institution, sees a potential alternative to right-wing populism in Emmanuel Macron’s independent bid for the French presidency this spring. “A Macron victory,” Derviş suggests, “could launch a counter-trend to the populism that is sweeping the globe, by giving hope to all who are sympathetic to the left or right, but anxious about populism and hyper-nationalism.”
Finally, Sławomir Sierakowski, Director of the Institute for Advanced Study in Warsaw, notes that there is one group that has long since come to terms with, and prepared a plan of action against, the dangers posed by Trump and his populist cronies: women. “[O]f all the sources of opposition to Trump, only women have been able to organize quickly and efficiently,” Sierakowski observes. “Last month’s Women’s March on Washington boasted a turnout some three times larger than Trump’s own inauguration the previous day.” Sierakowski expects women – who far outnumber populists overall – to serve as the vanguard against populism in the US, Poland, and other countries turning toward illiberalism. They are “fighting fire with fire,” he observes. “Can the populists take the heat?”