Saturday, December 3, 2016

Governing is not a Popularity Contest

While much of the weekend’s media attention was focused on President-Elect Donald Trump’s faux pas with China, there is another serious and related blunder being perpetrated by the Grifter-in-Chief that will have a deleterious impact on America’s economic leadership in the world.

Relegated to page A13 of today’s New York Times is an article outlining how Mr. Trump is surrounding himself with Wall Street cronies on his Strategic and Policy Forum and eschewing participation from the Silicon Valley technology sector.

This is not surprising because while Wall Street generally supported Mr. Trump in the election, Silicon Valley generally supported Hillary Clinton.

It’s also not surprising when you consider the difference between Wall Street and Silicon Valley. Wall Streeters make their fortune by promoting elaborate schemes that use other people’s money while minimizing their own risk. When things go bad, they depend on government bail outs and tax breaks. Silicon Valley actually invents and build things that improve people’s lives, and its companies live and die based on their ability to perform. Trump made his fortune by emulating the Wall Street paradigm, not Silicon Valley’s.

By downplaying input from the innovators, Trump is losing the opportunity to keep America in the forefront of economy-driving technologies like the Internet and the biomedical market. Other nations (which have far superior educational systems) will fill that void, further threatening America’s global economic leadership.

A leader does not surround himself with toadies, as Trump has done with his cabinet and is doing with his economic advisors. Trump obviously feels that the election is still ongoing, as evidenced by his rallies, his off-the-cuff pronouncements (see: Taiwan), and his selection of advisors.

I’ll end this piece the same way that the Times author ended his – talking about General Electric, but with a touch of personal nostalgia. From the Times article:

“The most curious selection [to Trump’s panel] may be that of John F. Welch Jr., the former head of General Electric. The current G.E. chief, Jeffrey R. Immelt, a Republican,  is not on the list of advisers. Mr. Immelt had criticized Mr. Trump comments about Mexicans and Muslims.”

I was an employee of GE Aerospace during Welch’s reign, and twice had the occasion to meet him. The fact that he was not a nice person is irrelevant. Prior to Welch, companies like GE supported the Department of Defense with systems and equipment through various contracts, with profits and patriotism taking equal footings. In 1993, Welch sold GE’s defense business to Martin Marietta. This was the start of a massive consolidation of America’s defense suppliers from dozens of companies to less than a handful of big players today. Competition is virtually nonexistent, the defense budget is up, and is somewhat dependent on perpetual wars and continued global tension. Trump and Welch are cut from the same cloth, so it’s no surprise that Immelt was ignored while Welch was named to “help” his kindred spirit Trump.

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