President-Elect Trump

Disrupting Your Month: Disruptor-in-Chief Edition

This is not what we meant by ‘Disruption’

One month ago, in a stunning upset, Donald Trump was elected President. The historic and troubling nature of his victory warrants a special, yuge edition of Disrupting Your Month, where we discuss the policy implications of this uncharted era. Also in this edition is policy news about Airbnb and Uber, as usual, and an optimistic look at the future from The Verge.

President Trump

Policy-free Politics

The Trump transition team has only outlined a few real policy proposals. Of course, Trump has discussed building The Wall, barring Muslim immigration, and repealing Obamacare, but these aren’t actionable proposals. There are only a few hints of concrete proposals so far: supply-side tax cuts, childcare reform, and a large infrastructure bill. The rest is campaign rhetoric or undoing Obama’s executive orders.

Reaganomics 2.0 and Trumpcare

Trump’s tax plan would be the most aggressive change in tax code implemented since the Reagan era. Despite Trump’s populist rhetoric, his tax plan echoes that of every other Republican: reducing taxes for everyone, but mainly the rich. The plan is exactly what Republicans want; there is little in the way of this tax plan becoming reality besides deficit hawks demanding equivalent cuts to government spending.

More unique to Trump is his Childcare plan, which would allow for tax deductions for childcare costs, create specific tax free accounts for childcare related savings, and guaranteed 6 weeks of paid maternity leave. While this is weaker than Democrat plans, it’s unexpected coming from a Republican. The strangeness of the policy can be partly explained by the fact Trump promoted it just to say he had a plan with no Clinton equivalent. The maternity leave is especially uncharacteristic for a conservative, but perhaps it’s to make up for wanting to appoint an anti-abortion Supreme Court Justice.

Big League Public-Private Partnership

Infrastructure was an area that initially seemed to have legs on Capitol Hill. With both the President and Democrats agreeing on the need for infrastructure investment, not all Republicans would need to get behind the plan for it to become law. This idea rapidly fell apart as progressives began to actually read the plan for what it is: a complex massive handover of infrastructure development to private investors through tax credits.

The plan would give investors an 82% tax credit in infrastructure project spending, and then recoup the lost revenue by taxing contractors’ wages and adding tolls to all the roads repaired. It’s not as expensive as a $1 trillion investment, but still too expensive in tax credits for Republicans, while too dependent on privatization for Democrats. With both parties against the plan, it may not go anywhere.

Paul Ryan’s Way

The policies outlined above represent a fraction of what incoming administrations usually plan for their administrations. Ready to fill in the gap is Paul Ryan and A Better Way, his ambitious conservative congressional agenda. But there are several roadblocks in his way, mainly Trump’s pledge to protect entitlement programs and his vehemently anti-immigration views. If Trump keeps his promises, Social Security and Medicare will not be privatized while Comprehensive Immigration Reform becomes irrelevant.

The best areas for Ryan to make an impact would be through his plan to replace Obamacare as well as his plans to simplify regulations and the tax code. The success of these plans hinges on Ryan and Trump’s relationship, which has been as dramatic as a reality show.

Wanted: 4000 Staffers

While Congress would vote on whichever plans Trump implements, who will Trump appoint to major and minor posts in the Executive Branch? He doesn’t know. According to CNBC, Trump was “unaware” of his duty to replace the thousands of posts to be left vacant on January 20th. Trump’s transition team has churned to life slowly after Mike Pence wrested control of it from Chris Christie and his lobbyist allies.

The plus-side is that has put out an open call for staffers. This is not unprecedented, as previous administrations had open calls for lower level positions. However, the application asks applicants for a “Personal Data Statement,” which contains “organizations which you belong or once belonged; speeches you may have given… in short, anything that might embarrass the President.” Most transition teams would vet their applicants rather than letting them vet themselves.

Essentially, if you want to work for the President, it may be easier than applying to that consulting firm you’ve been eyeing, so now’s the time.

Post-Truth Think Tank

In other Trump related policy news, members of the Alt-Right met in DC to plan the formation of a far-right populist think tank. While journalists who attended the event rightly focused on ‘nazi-era salutes’ and references to the ‘Lügenpresse,’ more concerning in the long-run is the establishment of a white nationalist version of Heritage Foundation or Center for American Progress. With policy research already dangerously polarized, the last thing the academic field needs is more extreme viewpoints.

In Other News…

Even though American politics and policy have fundamentally changed over the last month, the rest of the world continues to be disrupted in much smaller ways.

Uber: Flying too close to the Sun

Let’s look at some normal stories, like Uber investing in flying cars. Uber expressed interest in the technology in a white paper that describes flying cars as small planes that take off and land vertically. Unsurprisingly, the easiest part of this plan is the technology. With the policy framework of drones barely off the ground, figuring out how flying cars would share the skies with other machines and pilots is a complex problem. Uber spokespersons estimate this service will arrive within 5 years, apparently confident that the use of small planes is easier to run by the FAA than unmanned drones.

But some transportation and finance experts, who are not distracted by investments into futuristic ventures, doubt Uber’s longterm sustainability. The argument is that Uber has higher operating losses, $2 billion a year, than any other startup, and cannot provide evidence that it will ever be profitable. The argument also rests on increasing resistance to the idea that Uber drivers are contractors, not employees: the firm’s model is based on this difference. The above link only provides the argument for Uber, but raises questions about how much of the gig economy can move from private investments and IPO’s to profit and sustainability.

Airbnb Blues

Let’s move on to another gig economy firm facing resistance. Airbnb announced an ambitious plan to take over the entire tourism sector, starting with Guides, a service in which anyone can sign up and set prices for tours of their cities. The idea is giving tour guides pause and giving me a great backup career if Trump kills the policy industry (you’ll find me guiding tourists to all of LA’s best taco stands).

This potential disruption of the tour guide industry was completely foreshadowed by several major setbacks for the firm. Airbnb has finally complied with a San Francisco law passed in 2015 requiring that all listings be hosted in a citywide database. This list of listings ensures that every host will be compliant to the city’s extensive regulations.

New York’s statewide assault on “commercial” Airbnb listings, using unoccupied properties with the app, has drawn protests from Airbnb hosts outside of Governor Cuomo’s house. These hosts claim that limiting the use of unoccupied property listings affects “everyday New Yorkers… trying to make ends meet.” A Vox analysis estimates that half of New York cities would be affected by this law. The analysis also points out that these kinds of regulations follow ones in Barcelona, Paris, and Berlin in implicitly accusing Airbnb of having effects on the housing market that have not yet been proven. Without concrete proof that Airbnb is having an effect on urban housing markets, it’s hard to say what these policies will do.

The Future’s (Still) Bright

For more than half the country’s voters, this incoming administration looks apocalyptic. While there is no way to know what effect Trump will have, there is still a lot to be optimistic about. One series of interviews I think exemplifies the march of progress comes from The Verge, called 2021. The interviews map out the advances that are set to arrive within the next 5 years, no matter who is in the White House, from self-driving cities to digital activism. When Toqueville traveled to the United States to write Democracy in America, he ignored the temporary setbacks he witnessed and wrote about the “inexorable march” of progress. We need to do the same.

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'Disrupting Your Month: Disruptor-in-Chief Edition' have 1 comment

  1. January 18, 2017 @ 8:00 am Georgetown Public Policy Review / Disrupting your Year: A Look Back at 2016 - Georgetown Public Policy Review

    […] their drivers as employees, not contractors. Giving drivers full benefits strains Uber’s already troubled business model. Other problems include well financed competition from China and companies like […]


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