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Pleasing His Base Could Cost Trump

The president likes to do things his way. And that’s the problem.

Pleasing His Base Could Cost Trump

The president likes to do things his way. And that’s the problem.

Walled in.

Photographer: MANDEL NGAN/AFP/Getty Images

Today’s Agenda

Bye-bye to 2020?
Photographer: Andrew Harrer-Pool/Getty Images North America

Another Brick in Trump’s Wall

Photographer: MANDEL NGAN/AFP/Getty Images

President Donald Trump’s motivation for pushing his border-wall fight to ever-greater lengths seems based on a belief that failure to do so will cost him the support of his political base. But keeping that support may cost him so much more.

This fight has already kept the government shut down for what will be a record length of time by tomorrow. And now Trump is gearing up to declare a state of emergency he claims gives him authority to appropriate the $5.7 billion he says he needs to build the wall. Most recently he has floated the idea of taking that cash out of funds for wildfire and hurricane relief in California, Florida, Puerto Rico and Texas. This would be a spectacular political self-own, writes Jonathan Bernstein. Sure, California will never vote for Trump, and Puerto Ricans can’t vote. But Florida and Texas have many electoral votes and turned increasingly purplish in the 2018 midterms. An unpopular president taking money from sympathetic disaster victims to pay for an unpopular wall sure seems like a recipe for a one-term (if that) president, Jonathan writes. 

Nevertheless, Trump and congressional Republicans keep doubling down on the wall fight, fearing the political repercussions of doing otherwise. But they’d be far better off by, say,  talking more about tax cuts, argues Karl W. Smith. Sure, the cuts are unpopular, but then so was Obamacare, and opinion toward that got more favorable over time, Karl notes. And Republicans haven’t tried very hard to tie the cuts to the strength of the economy. They could also push to make the individual tax cuts permanent, a proactive argument that may not fire up the nativist base but could broaden the party’s appeal – or at least change the subject. 

Trump’s Obama-Esque Middle East Policy

Trump has made a big show of blowing up everything his predecessor touched, from Obamacare to the drapes in the Oval Office. Secretary of State Mike Pompeo’s speech at the American University in Cairo yesterday seemed to follow this template, trashing pretty much everything about Barack Obama’s Middle East policies.

And yet, when you get right down to the particulars of what Pompeo promised, Trump’s approach – aside from the Iran nuclear deal – is basically an extension of Obama’s, writes Eli Lake. Both men are involved in Iraq and Syria and trying to bolster Saudi Arabia and counter Iran. There’s a key difference, though: While Obama sometimes looked the other way at regional allies’ antidemocratic ways, Trump basically encourages authoritarianism, Eli writes, which could hurt America’s regional standing in the long run. 

Along those lines, Trump and authoritarian Saudi Arabia have been clutched in a bear hug basically since Inauguration Day, in contrast to Obama’s cool relationship with the kingdom. The downside risk for the Saudis here is that, by cozying up so much to Trump, Saudi Arabia makes itself a partisan lightning rod in the U.S., writes Hussein Ibish. And that puts its American relationship – which both countries need – at risk for the long term, Hussein writes.

Further Middle East Reading:  Is teaching English to ISIS punishable as support for terrorism? We’re about to find out. – Noah Feldman

Stats and Taxes

We’re starting to get hard numbers for government revenue and spending in 2018, meaning we can start to figure out the cost of the Republican tax cuts passed in 2017. On the surface, based on raw numbers alone, it looks like they actually didn’t add to last year’s deficit, surprisingly. But you must adjust those numbers, writes Justin Fox – first for inflation and then against the baseline of previous years. With those tweaks, it looks as if tax cuts shaved between $125 billion and $171 billion from revenue in 2018, adding more to the deficit than government spending did. You could argue the benefits were worth the cost, but they do have a cost.

Some Democrats would like to undo some of those tax cuts for wealthy Americans, to help pay for things like a Green New Deal and Medicare for All. But Ramesh Ponnuru writes there’s no bright, clear income line where “middle class” Americans end and “ripe-for-soaking” rich Americans begin. Increasingly, given inflation and economic growth, that line keeps rising, Ramesh suggests, meaning the risk grows that middle-class taxpayers will be caught up in tax hikes meant for the wealthy. 

Brexit Bankroller Bets Against Brexit

Ahead of the 2016 Brexit referendum, hedge-fund manager Crispin Odey poured money into convincing Brits to leave the EU. To most people’s shock, this paid off. Now, in another shocking twist, he’s in the currency market, making the opposite bet: He thinks Brexit won’t happen after all, writes Lionel Laurent. Unlike the first bet, this one looks increasingly like less of a long shot, as parliamentary support for Theresa May’s Brexit plan crumbles and the odds of a second referendum rise.

Further EU Reading: France and Germany are about to sign a promise to strengthen their ties. But there are still far too many differences between them, preventing the cohesive union they really need. – Leonid Bershidsky 

India Dangerous New Identity Politics

Since the partition of India and Pakistan in 1947, India has been a liberal, secular democracy, governed by people of all religions, while Pakistan was explicitly an Islamic state. Now, with an election coming up, Prime Minister Narendra Modi’s Hindu nationalist party is pushing a law pointedly embracing non-Muslim refugees from Muslim nations, while ignoring the plight of Muslim refugee groups. The spirit of this law, Mihir Sharma writes, is a cynical abdication of India’s founding ideals, all for a little short-term political gain. It risks turning India into a more dangerous place, Mihir writes – a Hindu Pakistan.

Telltale Charts

The world doesn’t have enough palladium, which is used in catalytic converters for gasoline engines. It’s now worth more than gold, in fact; but that’s still not high enough to make miners dig for more, writes David Fickling.

Maybe Americans teens aren’t inherently bad drivers, but just need more practice; as their rate of driving has declined, the average age of America’s most dangerous drivers has risen, Justin Fox writes. 

Further Reading

The Democratic Republic of Congo’s election results look fishy. The U.S. and EU need to help make sure the true will of the voters is being honored. – Bloomberg’s editorial board 

Economists are starting to think about how to deal with the problems of corporate monopoly power, and traditional antitrust regulations may not do the trick. – Noah Smith 

Electric vehicles are on the rise around the world, but infrastructure, and the attitudes of conventional drivers, haven’t caught up yet. – Nathaniel Bullard

Growth stocks have more to lose than value stocks in Trump’s trade war, as they sell more of their stuff overseas. – Nir Kaissar 

As socially responsible investing has soared in popularity, it has gotten more expensive. – Mark Gilbert 

Trump’s EPA is right to think of the costs of regulations, but it’s committing regulatory malpractice when it ignores the potential benefits. – Cass Sunstein 

The rules for SPACs, or  “blank-check” companies, seem way too loose. – Stephen Gandel 

“The Sopranos,” which turned 20 this week, was one of the best TV series ever, but it’s anathema to a certain generation of Italian-Americans. – Joe Nocera

ICYMI

Seven million Americans have gotten the flu so far this season. How to eat safely when the FDA is shut down.

Kickers

The last honest man in New York turns in a bag filled with $10,000 in cash.

A strangely haunting collection of ‘70s-era lounge singer promotional photos, found in a dumpster. (h/t James Greiff for the first two kickers)

137 years of global climate anomalies, visualized.

Lou Reed’s “New York” turns 30.

A pizza expert’s four rules of pizza toppings.

Northeast China has a very cold, very beautiful ice and snow festival.

Photos of the week.

Note: Please send bags of cash, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

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