Dear President-Elect Trump:
Congratulations on your come-from-behind victory. You did the nation a great service in thwarting the candidacy of Hillary Clinton, who lost because she exhibited a deadly combination of moral arrogance, economic ignorance, and political blindness. More than anything else, it was her use of the phrase “the deplorables” that sparked her opposition to come out in force against her. But if she lost, you won, and you now face the greater challenge of how to make the enormous transition of rebellious outsider to the President of all the people in the United States. Here, in my view, lies the best path for your success.
Your first task begins today. You must restore your own moral legitimacy in the eyes of those who detest you. You do not have to yield to a single substantive demand from your critics, but the incessant rounds of inflammatory rhetoric have to stop, period. Indeed, one reason why I could not support your nomination was that you started down this path early on, and thus gave rise to a “never Trump” movement that easily could have halted your successful run for the Presidency, and which now has left you without the majority needed for a political mandate. One reason why you did win was that you stopped this dangerous and divisive talk in the final two weeks of the campaign. The electoral shift took pace in earnest when Clinton, not you, became the center of attention. Keep the attention off yourself, and you will be able to open up a dialogue with the other side, in which it is important for you to listen even more than it is to speak. More concretely, at this juncture, the worst thing that you could do in your presidency is take on such hot-button social issues as gay marriage and abortion. Keep the status quo. Your political future will be a lot less rocky if you direct your attention to the economic and political issues on which you can make a real difference. I will talk about some of them here, and leave foreign and military matters to a latter letter.
Right off the bat you face this key choice on how to mend the economy by making the United States more competitive than it has been. You have two choices, one of which is fatal and the other that promises a fair measure of success. The first path is to try to shut out the competition from overseas by putting up trade barriers, reneging on previous trade deals, and vetoing the Transpacific Partnership. It is strictly a lose/lose proposition. The consequences of this approach could lead to a trade war that would make the economic sins of progressive politicians look puny in comparison. Taking that approach will also alienate huge portions of American businesses that depend on foreign trade. The upshot will be a further loss in jobs for the very people who need them both, who will abandon you in droves when this happens. I interpret the surprising rise in the market as evidence that Wall Street does not think that you will follow through on that plan. You should listen to its advice.
The correct approach is to leave international affairs as they are by taking steps to fix the economy at home. The largest growth industry in the United States is compliance. Remove those barriers domestically and American businesses, large and small, will be able to compete more effectively in world markets in ways that will benefit workers at home and consumers overseas who can get the benefit of our products. This approach is win/win. Jobs will return to the United States when we remove the domestic barriers to their creation. Foreign nations will benefit from the increased trade, and become stronger and better allies.
Fortunately, it lies within your power to make many of the most needed changes immediately by undoing the endless set of regulations and letters that the Obama administration has inflicted on all areas of American life. Today the words “Dear Colleague” strike terror in the heart of their addressees, because they signal an expansion of federal power that will allow government bureaucrats to take over the internal operation of large institutions without any showing of wrong whatsoever. President Obama and his administrative staff have imposed these unilaterally. It is within your power to remove them unilaterally and immediately. That result will have an enormous advantage by cutting back on the power of the Office of Civil Rights, for example, in its nonstop pursuit of American universities and schools. And while you are at it, you should remove the 1979 Policy Interpretation that vastly expanded the power of federal government to reshape for the worse intercollegiate athletics, leading, for example, to the wholesale abandonment of male teams in wrestling and swimming. Both private and state universities are well able to handle matters of supposed sex discrimination themselves. They do not need the federal government to watch over them. The same is true with respect to issues of sexual harassment, where the federal takeover has led to a revival of inquisitorial tactics that have no place in a free society.
While you are at it, you have to call off the federal enforcers that have made it a priority to insist that bakers and flower arrangers and photographers lose their businesses if they do not supply wedding services to same-sex couples. It is perfectly correct to insist on two propositions. First, these couples have the right to marry, and hire whatever persons they want to assist in their wedding arrangements. Indeed, a vigorous market has grown up to provide just those services. But it is wholly unacceptable to drive out of business people who do not want to participate in this market. One of the disgraceful features of the progressive mindset is to insist that people who do not want to participate in these markets are bigots or worse. Their behavior shows all too clearly that massive intolerance is all too often a part of the progressive mentality, when all the evidence suggests that those business people who do refuse service on grounds of religious conscience make every effort to cooperate with their gay and lesbian customers on all sorts of other business arrangements. And what is true here is also true with the provision of contraceptive services under various health care programs. These business groups have thought long and hard about their positions on these vexing issues, and they should be protected in the choices that they make. Those who are offended by their decisions are free to take their business elsewhere. But you have to make it perfectly clear that they are not entitled to use the force of government to shut them down because of their exercise of religious choice. Bill Clinton’s administration had a much better grasp of these issues than the modern progressives. The Religious Freedom Restoration Act was passed in his Administration with bipartisan support. It is now rejected by modern progressives.
You should take a similar hard look to actions take by the Department of Labor that disrupt all businesses. The recent decision to roughly double the wage and overtime provisions of the Fair Labor Standards Act to people who earn under $47,476 per year cannot be ducked by any firm. The administrative and financial burdens make it especially difficult for tech start-ups to sign up employees and for universities to compensate the graduate students so necessary for engineering and the natural sciences. These rules have to be pulled right away to give breathing room to American firms. In the slightly longer horizon, once your administration can name a majority of the members to the National Labor Relations Board, it has to reverse ground on virtually every major ruling that has come down, and to immediately terminate with prejudice the litigation that seeks to treat franchisors like MacDonald’s as “joint employers” subject to the jurisdiction of the NLRB. The Obama administration takes the view that successful business models have to be destroyed in the name of social justice, even if job stagnation results.
Indeed, the campaign to deregulation domestically has to take place through all the government agencies, whether they deal with environmental, securities, communications, trade, or any other issue. We do not need the clean power plan in its current form, or for that matter, the clean water plan; we do not have to get detailed information, world-wide, of the wages of the median worker; we do not need programs of net neutrality; we do not have to have the Consumer Financial Protection Bureau (whose head, Richard Cordray, you are now entitled to sack) to run roughshod over various credit markets. There is here a relatively simple prescription: whatever the Obama administration has done by regulation, undo.
There are, of course, many issues that cannot be done by executive order, and you should not try to imitate the worst Obama abuses in unlawfully expanding your authority. But it should be painfully obvious that the two major legislative mistakes of the Obama administration have to be done by ending the various mandates under the Affordable Care Act—a horrible misnomer—for the individual and employer markets. There will clearly have to be something to put in the void, for which the Healthy Indiana Plan is a good place to start. And clearly something has to be done to remove most of the key provisions of the Dodd-Frank legislation that causes far more mischief than it prevents. And we must move to follow the world-wide practice of allowing the repatriation of profits earned abroad by American firms without a new round of corporate taxes.
The key point remains this. If we clean out our own domestic institutions, we shall raise the ability of American firms to compete world-wide. Jobs will then be created and standards of living will move up. So you must hold off on your ill-conceived trade plans so that domestic reforms will allow for economic prosperity both at home and abroad. You have a busy period ahead. Don’t fritter the opportunity away.
Sincerely,
Richard A. Epstein
