Refilling the Swamp: Trump Issues 5 Times As Many Ethics Waivers As Obama

“Draining the swamp” was a major theme of Donald Trump’s presidential campaign last year. The phrase became a rallying cry for ethics reform and for stopping the “revolving door” that allowed government officials to go to work as lobbyists and vice versa. To much fanfare, Trump signed an Executive Order that modified the Obama Administration policy on lobbying by former government officials as one of his first acts.

Now it seems that the Trump ethics policy is not as stringent as it first seemed. On Wednesday, the White House finally issued a list of “ethics pledge waivers” for the White House staff. The White House had fought the Office of Government Ethics on whether to make the waivers public after initially granting them in secret.

The list, which includes only members of the presidential and vice-presidential staffs, includes a number of former lobbyists and members of the media. The New York Times notes that the 16 known waivers issued by the Trump Administration is “more than five times the number granted in the first four months of the Obama administration.”

Some of the waivers were granted because the White House employees had to have contact with their former employers to do their current jobs. For example, Chief of Staff Reince Priebus had to be able to communicate with the Republican National Committee, the organization that he once ran. Likewise, Kellyanne Conway, a senior advisor to President Trump and a former Republican pollster, “may participate in communications and meetings involving former clients which are political, advocacy, trade, or non-profit organizations” per her waiver.

Other waivers are more problematic for Mr. Trump’s “drain the swamp” pledge. Politico points out that Chief Strategist Steve Bannon, who previously headed the right-wing website, Breitbart.com, is covered under a waiver that allows White House aides to interact with news outlets in spite of previous ties to those organizations. According to Politico, Bannon can legally engage with Breitbart even when other organizations are excluded. Before the waiver was made public, the Citizens for Responsibility and Ethics in Washington had filed a complaint against Bannon for repeated contacts with Breitbart employees in apparent violation of the ethics pledge.

It is uncertain how many lobbyists have been granted approval to work in other departments within the Trump Administration, but at least four former lobbyists are known to have been granted waivers to work within the Trump White House on policy areas that could present a conflict of interests:

• ·         Michael Catanzaro, a former oil and gas lobbyist, was granted approval to work on energy policy.
• ·         Shahira Knight, a former Fidelity executive who had lobbied on tax, retirement and financial issues, was approved to work on those policy areas.
• ·         Andrew Olmem, a bank and insurance lobbyist, is allowed to work with former clients on financial policy.
• ·         Joshua Pitcock, a former lobbyist for the State of Indiana, is allowed to work with Indiana officials on issues on which he previously lobbied.

Additionally, six former attorneys for the Jones Day law firm were granted a waiver to “participate in communications and meetings where Jones Day represents the President, his campaign, the transition, or political entities supporting the President.” Donald Trump was a client of Jones Day before he became president and White Counsel Don McGahn, along with 11 other Trump Administration lawyers, are alumni of the firm. Jones Day, which is not a lobbying firm, ran ads touting its “insights on the new Administration” in April.

Watchdog groups were critical of the extent of the waivers. “The ethics waivers the White House finally released reveal what we already suspected: that this administration is chock full of senior officials working on issues on which they lobbied, meeting with companies in which they have a financial interest, or working closely with former employers,” said a spokesman for the nonpartisan Citizens for Responsibility and Ethics in Washington.

The Obama Administration issued about 16 waivers in eight years. The Trump Administration has issued 16 waivers after four months. At this point in the Obama Administration, three waivers had been issued per the Times.

A White House spokesman told the New York Times that the Trump Administration tried to avoid conflicts of interest when possible. The administration also asked its employees not to work on policy areas in which they had worked in the private sector. 

Originally published on The Resurgent

Immigration ban could be expanded, even as resistance grows

Reince Priebus suggested on Sunday that President Trump could expand his immigration ban to other countries, even as resistance to the initial order grew. The White House Chief of Staff said on NBC’s “Meet The Press” that the president could issue new Executive Orders that might include restrictions on such countries as Saudi Arabia, Pakistan, Afghanistan and Egypt.

The ban on the initial seven countries has caused as uproar as visitors to the US with valid visas were detained at ports of entry. A federal judge issued a ruling temporarily preventing the Trump Administration from deporting these detainees

The Wall Street Journal reported that the ban was enacted suddenly and secretly to prevent terrorists from circumventing the new security measures. Many immigration officials did not see the Order until after it was signed.

There were reports that several of the countries in the initial travel ban were considering retaliatory measures. CNN reported that Iran intended to take “reciprocal measures” to protest the Trump policy. An Iraqi investment magazine, the Baghdad Investor, reported that Iraq had implemented a policy similar to Mr. Trump’s on US citizens entering Iraq.

In many cities around the country, protesters took the streets to protest the policy. The Wall Street Journal reports that the State Department is taking the unusual step of drafting a cable to be signed by dissenting officials. The cable has not yet been released but reportedly has been signed by more than 100 mid-to-high level officials both in Washington and posted abroad.

Senators John McCain (R-Ariz.) and Lindsey Graham (R-S.C.) issued a joint statement criticizing Trump’s ban. “It is clear from the confusion at our airports across the nation that President Trump’s executive order was not properly vetted. We are particularly concerned by reports that this order went into effect with little to no consultation with the Departments of State, Defense, Justice, and Homeland Security.”

The senators note that the ban also applies to Iraqis who fought alongside American soldiers against ISIS and al-Qaeda and that the policy may backfire. “This executive order sends a signal, intended or not, that America does not want Muslims coming into our country,” they write. “That is why we fear this executive order may do more to help terrorist recruitment than improve our security.”

Fortune lists a growing number of Republicans who have gone on record as opposing Trump’s ban. Currently the list includes 18 Republican senators and congressmen from across the country.

Polling on the immigration ban has not yet been released, but Gallup’s daily approval rating showed a sharp uptick in disapproval of President Trump since the announcement of the ban last week. Disapproval of Trump now stands at a majority, 51 percent, while 42 percent approve.

Originally posted on The Resurgent

Reince Priebus says America should 'make everything'

From time to time, people in power will make a statement that is economically illiterate. Occasionally, that person will be a Republican. Reince Priebus was that person when he appeared on the Hugh Hewitt radio show earlier this week.

On Wednesday, Priebus, who is the incoming White House Chief of Staff for President-elect Donald Trump, told Hewitt, “We can make everything here, or our goal should be to try to make everything we can in the United States so that the money gets put in the pockets of Americans.”

On the surface, the statement is innocuous. It seems to be a simple statement in support of American business and manufacturing. After all, who wouldn’t want American manufacturers to produce everything domestically? It would eliminate the need for imports and erase the trade deficit.

The problem is that Priebus doesn’t understand competitive advantage. Competitive advantage allows companies or countries to produce a good or service that is preferable to that of its competitors. If a country can produce a product at a lower cost, a higher quality or both, then it will hold an advantage over its competitors. It would be impossible for a country to hold a competitive advantage on every product and service, just as it is impossible for an individual to excel at everything.

If Priebus fulfilled his dream of America producing everything, the result would be that many of these products would be inferior and/or more expensive than competing products made elsewhere. American products are often expensive for several reasons. American labor is expensive thanks to unions, regulations like the Affordable Care Act and the high American standard of living. The cost of real estate is high in many manufacturing areas of the US. The US corporate tax rate is the highest in the free world.

If every product was made in America, the economy and market would not be efficient. Some products would be more expensive or lower quality than products that could be purchased elsewhere. Either heavy restrictions would have to be placed on the free market to keep people from buying imported goods or inefficient American producers would be forced out of business. American consumers would be forced to pay more or buy shoddy products in many cases. Alternatively, the goods might be produced at lower costs by machines than by American workers.

For an example of why Priebus’s utopian dream wouldn’t work, look no further than Donald Trump’s deal with Carrier. Trump convinced the company not to move 800 jobs to Mexico, only to find that the company was planning to automate its Indiana plant and that many jobs would be lost anyway.

Mexico has a competitive advantage in building the heating and air conditioning units that Carrier produced in Indiana. The company said that it expected to save $65 million per year by moving the plant to Mexico. When a combination of political pressure and a $700,000 annual tax credit persuaded the company not to move, it didn’t change the economic advantage that Mexico held for the low-tech product. Automation and lower labor costs levelled the playing field.

In contrast, Carrier’s parent company also owns several aerospace companies, including Pratt & Whitney and Sikorsky. These are high tech manufacturing companies that are profitable and adding jobs, even with plants in Connecticut, one of the most expensive states in the union. America holds a competitive advantage in aerospace manufacturing, partly due to a highly skilled labor force.

What Priebus is actually calling for is less economic choice. To allow American companies to make everything without going broke, it would require the United States to isolate itself from competing manufacturers. That is essentially the purpose of the protective tariffs proposed by Donald Trump and Bernie Sanders.

Priebus’s comment is a disturbing confirmation that Republicans are rejecting the free market in exchange for protectionism and isolationism. After eight years of stagnant growth and wages under President Obama, the desire to revitalize the country is understandable, but shutting America off from the world is not the answer.

A better answer would be regulatory and tax reform to make American companies more competitive. The government should also allow companies to pursue niches where they have an advantage as well as to cut costs where they aren’t competitive. As the legendary economist Milton Friedman once said, “Underlying most arguments against the free market is a lack of belief in freedom itself.”

Originally published on The Resurgent