How to deal with an elected populist? Continuing last week’s discussion

Exceptional events require exceptions. So let’s continue last week’s debate, after we discovered who won (at least the elections, if not the popular vote). But our focus now, will be on how to react to the new situation.

There is a puzzling variety of Western reactions following the election results in the United States. Some leaders (like the Japanese Prime Minister) seem to have bowed deeply. Others (Russia), expressed their (probably wee-founded) hopes to improve relations. But again, others like Chancellor Merkel, appear to be cooperative, based on some conditional expectations. The EU, all of a sudden, has decided to improve its cooperation in the external and defense fields, and even promises to spend more.

What is a viable strategy for handling a committed populist? Bandwagoning? Accommodation? Conditional cooperation? Kow-towing? Pragmatic restraint?

– Prof. Klaus Segbers

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  1. Sergei Medvedev 3 years ago

    To begin with, I do not believe in the existence of Trump -- this is not a man, an actor, or a policy program; Trump is the name of a virus which has just hit the system. Least of all, one should look into his rhetoric during the election debate. Indeed, his "program" or "views" are nothing but empty signifiers used in the massive campaign of trolling and deceit. Trump's agenda is a tabula rasa in which other leaders and actors can try to write their own scripts. The entire Trump story is now about the capacity of institutions, their ability to constrain and accommodate a loose cannon, the perennial dichotomy of agency and structure. But Trump is also no stranger to the system, and open for communication and bargaining. I believe that the power of nested clans, vested interests and Western institutions will eventually prevail, and the policy task is now to accommodate, domesticate and shape the Trump presidency, writing policies and ideas into this hollow shell.

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  2. Alexei Voskressenski 3 years ago

    The best strategy to deal with a committed populist is a pragmatism. Even a populist must show results to the population which is always broader than a committed electoral body which is voting notwithstanding the results of their candidate. It takes time, it always involves great efforts, but it is worth trying.

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  3. Justas Paleckis 3 years ago

    The world will become more multipolar after the election of US President Trump. Much will depend on how China, Russia and other BRIC countries will behave with him. Weaker EU is unlikely to have a coordinated approach to Trump. It is more important, how Berlin and Paris will do in negotiating with Washington. And what if at least in one of these capitals a Trump type of politician will appear at the highest power there next year? Former’s “economic giant’s and a political dwarf’s" chancellor’s attempt to propose conditional cooperation with Trump based on values deserves applause. However, does such a principled approach stand a chance? Berlin and the whole of Europe threaten Turkey to impose some sanctions if the death penalty will be introduced in that country. Meanwhile, the majority of US states are practicing such punishment, but there are no strict warnings from Europe.

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  1. Zoltan Eperjesi 3 years ago

    Facts (for example the role of psychometrics and social media in the election campaign) and intricate circumstances (for example the intervention of foreign cyber attacks in the election campaign in order to influence the outcome) of the least American elections are showing that even if D. Trump does not win the popular vote of its citizens, nevertheless he is a consummate showman. Beside this, the would-be politician is an ambitious and acute businessman with winnings and wastages. However, by focusing on how to cope with the new situation, it is to point out that the new President and his election team was in no way prepared to move in to the White House. Thus, as the big surprise effect and state of shock is shrinking in the meantime, it becomes quite clear that the “politician” President Trump has a new approach to dealing with corporate USA that is no good news in the least. Fear and uncertainty are totally rational reactions to the new presidency, but not enough to handle at political and diplomatic levels with the new order that will be installed in the USA. The iconic writing 'The Art of the Deal' (best-seller of 1987) of Trump, who never held political office previously could give us some potential clues about his leadership style in his new position. His official investiture is still six weeks away but Trump has already generated agitation in the American business community as senior executives and stockholders are uneasy about election promises of the president to abate taxes, reduce red tape and improve the economy by infrastructure investments. Moreover, workmen are full of hope at his readiness to hinder companies in additional job cuts. Trump describes in 'The Art of the Deal' one of his classic practices of deal making in which the first hint is that he has an easygoing attitude (“ I leave my door open. You can’t be imaginative or entrepreneurial if you’ve got too much structure. I prefer to come to work each day and see what develops.”), but he can be a quite strong negotiator if it is required (“Sometimes it pays to be a little wild.”) During the past few weeks D. Trump has addressed Ford about his strategy to shift production of its Lincoln sports-utility automotives; flagellated at Boeing, recently after the company’s business leader had deliberated in public regarding the dangers of a protectionist trade policy; and condemned Apple for not producing more items of its iPhone in USA. Moreover, Mr. Trump flattered and bribed Carrier, a producer of air conditioning units in Indiana, to adjust its course of action and save 800 workplaces in the state instead of outplace them to Mexico. One survey suggests that six out of ten Americans consider Mr. Trump’s position more positively after the Carrier arrangement. Thus, it seems that this kind of muscle flexing is well-liked by the people. It may be popular but it is also very tricky at the same time. It is to point out that the strategy of the emerging President towards big businesses has a range of hopeful items. Nevertheless, there are certain elements that are still highly questionable. The positive sides are recognizable in Mr. Trump’s endeavor for corporation tax restructuring, his plans in relation to infrastructural spending and in certain components of his deregulatory outline. The risks can be deduced, foremost, from the confused mercantilism that stays on the basis of his attitude concerning business, and, next, in his procedures— snapping up and offending even by surprise certain companies—, which he implements in order to reach his targets. The American trade and capitalism was growing because of the conventional implementation of a set of basic rules. However, if that rules-based structure is so far considered an old-fashioned model by a spontaneous mind-set in which businesspeople must be even more watchful and pay attention to Mr. Donald’s conflicting dealing ideas, the collateral damages to the economy of the USA, and not only, will be serious and unpredictable. Back to Mr. Trump’s best-selling book, the viewer also learns that he will hold no complaints if he finds his way (“I don’t hold it against people that they have opposed me.”) and it also stresses that family has priority for him (“I always take calls from my kids, no matter what I’m doing”). Another indication on Mr. Trump’s thinking is that he will keep the media on their toes (“I’ll wing it and things will work out.”) and furthermore, he most likely won’t like White House protocol (“Frankly, I’m not big on parties, because I can’t stand small talk. Unfortunately they’re part of doing business, so I find myself going to more than I’d like –and then trying hard to leave early.”) A final clue to Mr. Trump’s behavior is that he won’t feel the need to be liked and he gives as example his brother’s talent to cope with everyone in business in his own manner. (“I sometimes have to be the bad guy.”) Back to Mr. Trump’s latest steps toward the American business world, the impression is created that selecting the few it will be at the expense of the many. That can be also deducted from the confusions in Mr. Trump’s viewpoints as he thinks that America’s employees are damaged when companies shift their production to low-cost locations offshore and that is why he plans to enforce a 35% tax on the goods of any firm that moves its production in a foreign country. But yet such tariffs would be extremely disturbing, because they would make products even more expensive for American consumers. By hindering American firms from maximizing their effectiveness through maintaining various supply chains, they would also lose their competitiveness that again discourages innovative investments and lastly, weaken employees’ earnings across the economy. Furthermore, by implementing the carrot-and-stick policy, this may also forge a tit-for-tat reaction of involved parts. Therefore, specifically because taxes would be accordingly high, numerous businessmen distrust Mr. Trump’s protectionist attempts and consider it simple political rhetoric. Quite a few recognize that the center of attention on individual companies is a politically sneaky and consequently sensible alternative. If the newly elected-president can persuade American employees that he fully supports them by putting into practice just a stream of short messages on the social media and only some back-room arrangements resembling to the one with Carrier, there may be no necessity to resort to taxes. To gain from a business-friendly climate, the practice may prove that smart decision-makers merely have to stay in contact with the president’s influential circles. There's a good side to everything. This kind of mercantilism of the President is long held wish and possibly will generate fierce battles, first and foremost when the strong dollar drives USA’s trade deficit even higher and congressmen would have just restricted control to hold back Trump’s recommendations to enforce taxes. More to the point, even though rapid protectionist measures will be circumvented, a policy supporting corruption and discriminating individual firms will generate sufficient conflicts of interest, but Mr. Trump is not the first American elected official to push companies in certain direction. In spite of its position as the fortress of rule-guided free enterprise, the USA has a quite rich past of improvised political involvements in the market economy. States regularly propose firm’s subventions of the sort that Indiana offered to Carrier: beginning with John Kennedy, who disgraced steel companies in the eyes of the public in the 1960s, continuing with Barack Obama, who rescued big car manufacturers in 2009. The bottom line is that most of the former presidents have interfered in free enterprise system. Consequently, Mr. Trump’s dealings up to here are not incomparable in relation to his forerunners in the White House or even by global practices. For example, French politicians are well-known for persuading individual companies to maintain workplaces in the country. Britain’s head of government just made hidden promises to Nissan to convince the firm to remain in Britain even with Brexit. The most involved and connected corporatists from Moscow to Caracas, deal out special treatments to followers and penalties to adversaries on a massive scale that would even outreach that made in the Trump Tower. Even so, the newly elected president’s maneuverings are problematical, because it is quite different of the depression times, as Hoover and after that Roosevelt convinced economic entities to take action in what they repeatedly mistakenly understood as acting for the national interest, or we even can remember the case of 2009, when Mr. Obama constrained the financial institutions and saved Detroit, because the USA these days is not in a slump. Mr. Trump’s interfering seems to be the new every day, but if this is the tendency of the Trump presidency, careful companies will make it their main concern to build up good relations with the president and skip proceedings that might bother him. First signals for this are already obvious in the eagerness with which main CEOs—several of them opponents of Mr. Trump during the campaign—have hurried to adhere to his novel advisory board. The costs from this change may be invisible at the outset being surpassed by the advantage of economic incentives and regulatory restructuring. Furthermore, as president of the world’s biggest economy, Mr. Trump will be in the position to be high-handed towards businesses for the longer term by acting with impunity as politicians in less important places ever could, but ultimately the damages will mount up. This could be: lower competitiveness, misallocated resources and reduced trust in institutions of the USA. People who will experience the most losses will be the workers, those he promised to lend a hand. If Mr. Trump really wants to make the USA great again, then he should...

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  2. Zoltan Eperjesi 3 years ago

    suspend protectionist actions and avoid the maltreatment of individual businesses. Enjoy the spectacle of the greatest show on earth and combat with sane views hate and the unpredictable future.

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