Team Trump gets down to business
With Donald Trump, the nation is about to embark on a bold experiment in government management. To guide the economy, he has selected billionaire deal makers and folks with marketing expertise, and shunned seasoned policy experts.
To lead his tax reform, international trade and infrastructure and deregulation efforts, he has selected Steven Mnuchin at Treasury, Wilbur Ross at Commerce and Carl Icahn as a special White House adviser. All have amassed fortunes as opportunistic investors but have scant experience inside government or managing delicate interactions with Congress.
At the White House, they will be supported by Mr. Trump's campaign marketing gurus and another Wall Street financier — Steve Bannon, Kellyanne Conway and Gary Cohn — as chief strategist, counselor to the president and director of the National Economic Council.
Many conservatives and Republicans — these days those cannot be assumed to be one and the same — have harbored the view that Washington is not just corrupt but run by a bunch of bumbling dolts, and if business people were put in charge, they could miraculously transform the place for the better.
Now we will test the hypothesis that private-sector experience is generally transferrable to government and from one radically different kind of activity to another — for example, Mr. Ross' experience with steel and textile mills to making international economic policy and rebuilding the nation's failing infrastructure.
This requires a bold leap of faith and unusual disregard for history, because experience elsewhere indicates that private-sector management skills don't necessarily transfer well across industries or into the public sector.
Republicans are promising to spend huge sums on new roads, rails and the like. Much of it, according to Ross and White House economist Peter Navarro, can be financed by the private sector. However, the record of private investment and management of public infrastructure is hardly encouraging.
Toll roads are generally unpopular with motorists and often don't generate expected traffic, and private operators have filed for bankruptcy in Indiana and Texas. Private equity takeovers of waterworks in New Jersey, California and other places have resulted in huge rate hikes; takeovers of emergency services and fire departments have resulted in dangerously shoddy, underfunded services and bankruptcies.
Democrats in Congress are behaving as if Mr. Trump's election was an aberration and that they can ride out four years until returning to power by setting up roadblocks to the implementation of his policies.
Republicans like to see the Trump program as another Reagan revolution — lower taxes, deregulation and privatization. However, his notion that the government is in need of a wholly different approach to management may be more remindful of Jimmy Carter, also a successful businessman, who campaigned as an outsider and promised to clean up the mess in Washington. To his dismay, he found both Congress and the bureaucracy too difficult to manage, and he was out in four years.
More than sour grapes, Democrats may be right, and 2020 could be a good time to be the successful Democrat governor of a large state with high ambitions — enter Andrew Cuomo.
Peter Morici is an economist and business professor at the University of Maryland.