Pelosi Trumps Trump

On Friday the over-stressed air traffic controllers at New York’s busy LaGuardia airport claimed that so many of their colleagues had stayed at home rather than work without pay that they couldn’t safely handle the traffic. So the Federal Aviation Administration (FAA) halted some incoming and outbound flights. With another missed payday due at the end of the month, the likelihood of copycat actions at other airports rose, with the prospect of millions of angry travelers – voters as they are known in Washington – and a major hit to the economy. To make matters worse, unpaid employees at Internal Revenue were threatening not to answer inquiries for tax payers, mostly about refunds. The politicians looked into the abyss and saw the horror of horrors – an end of their tax-payer funded political careers.

Just a few days earlier Republicans in the senate defeated a Democratic proposal to fund and re-open the government, with no money for the President’s wall, or steel slats, or barrier. Whatever. The Democrats returned the favour by defeating a Republican bill based on a presidential compromise. Trump reduced his initial demand for a 2,000-mile concrete wall from sea-to-shining sea at a cost variously estimated at $12bn (Trump) to $70bn (Democrats), to $5.7bn for a “beautiful, artistically designed” steel-slat barrier in strategic locations. House speaker Nancy Pelosi, who first offered nothing, then a derisory $1, and then the $5.7bn Trump requested so long as it is never, ever used to construct the barrier the border agents say they need.

Republican leader Mitch McConnell and the leader of the minority Democrats, Chuck Schumer had followed the defeat of their respective bills with desultory negotiations before the air traffic controllers lit a fire under them, producing a temporary compromise. The government will be funded and re-opened until February 15 while the parties attempt to work out a long-term compromise. This is a clear victory for Pelosi, who said there would be no negotiations until the government was re-opened, and a humiliating defeat for the President. Schumer, delighted that the Democrats got all they asked for without giving anything in return, took a victory lap: “This agreement endorses our position…. Hopefully now the President has learned his lesson.”

The President is putting the best face possible on the agreement by warning that if there is no deal by February 15, including funding for a barrier, he will use his executive authority to order the construction of a barrier, or close the government again. No one in Washington believes the latter threat. McConnell likes to point out that “There is no education from the second kick of a mule.” And he recognizes that the first kick was to the Republicans’ and the President’s popularity. After all, it was they who seemed insensitive to the plight of 800,000 unpaid federal workers, and contract workers who service federal facilities.

The President was not helped by his Commerce Secretary, Wilbur Ross, who told a television audience that furloughed, unpaid workers, could always take out a loan to cover their cash needs. After all, Ross, a self-described billionaire who Forbes contends is merely rich, has generally found bankers more willing to open their vaults to him that they would be to a government worker living from paycheck-to-paycheck, and not sure when the next one will appear.

Trump made matters worse when he suggested that Ross “should have said it differently”, that grocery stores will “work along” with unpaid workers. “They know the people, they have been dealing with them for years”, the President added. So workers without paychecks can rely on their personal relationships with the checkout staffs of Walmart and Safeway to see them through. Meanwhile, the President is propelling the economy forward into the 1950s by providing tariff protection to the coal and steel industries -surely the industries of the future, relying as they do on the horny-handed sons of toil rather than jean-clad nerds in Silicon Valley for their work forces.

The question now is whether the conferees are likely to reach a deal. Both Trump and Pelosi have painted themselves into opposite corners. Both are prisoners, Trump of his core, Pelosi of the Democratic colleagues who elected her as their speaker. After this defeat, Trump must get his wall or face a 2020 election campaign seriously wounded by desertions from his base. Pelosi is the prisoner of the leftish cohort of newcomers willed to her by the voters in last year’s elections. This group bandies about the F-word in the manner of teen agers who discover how upsetting such naughtiness is to adults, and the equally filthy word, “compromise”. And they have promised to oppose in primaries any members of their party who oppose their plans, laid out by telegenic, self-styled Social Democrat Alexandria Ocasio-Cortez. Those plans include a 70% top tax rate to demolish an “immoral” (a word made newly popular by Pelosi) capitalist system that allows “evil” billionaires to exist, and a crash program to eliminate fossil fuels within twelve years lest the world come to an end.

The conferees will have to produce considerable fudge to produce a deal. Pelosi thinks that will be easy to do in the case of the President, whom she believes would claim victory no matter what deal he ends up accepting. She remarked at a luncheon on Friday, immediately before the deal was struck, “He [Trump] will claim victory no matter what. He can take these flowers [on the table] and plant them on the border and say I got my wall.” On the other side of the table, conferees will have to find a way to coin a word for what Pelosi calls an “immoral” wall so that, by some other name, it will smell sweet to Pelosi.

No deal, however, can wish away the two fundamental forces that are creating this problem. The first is the strong incentive Democrats have to support more-or-less open borders. They see new Hispanic immigrants as almost certain to become Democratic voters, especially since it is Democrats who fought to get them into the country. The Democrats share their motive with the Catholic Church, which sees the migrants from Central America as potential recruits. The Pope has called for “bridges, not walls”, and last week declared that fear of immigrants “is making us crazy. This is not to say that both the Democrats and the Pope do not have sincere humanitarian motives, only to point out that those are supplemented with self-interest.

Economic changes in the global infrastructure are the second underlying cause of the heated policy dispute: they generate mass migration. Cheap communications allow poorer people to see with their own eyes the standard of living of their richer neighbors, and to communicate to form caravans; cheap mass transportation allows people smugglers (coyotes) to put together groups and capture economies of scale.

Throw in another development that post-dates the wave of immigrants who passed through Ellis Island en route to assimilation. The welfare state changed the incentive for many migrants from the availability of opportunity to the availability of benefits. These are the economic enablers that are creating problems not only for America, but for Italy, Australia, Germany, the UK and other countries that are richer or safer than their neighbors.

The disagreement over the border structure, really a disagreement over immigration policy, and the consequent dysfunction of the political process, have almost 58% of those polled believing that the country is on the wrong track, even as the economy chugs along, both wages and share prices rise, inflation is non-existent, and the Fed has retreated from plans to raise interest rates and reduce liquidity.

Democracy, it is said, is messy, but no one either in the US or the Brexit-flummoxed UK appreciated until now just how messy it could be.