Donald Trump campaigned last year with a detailed agenda for actions upon his return to the presidency. In long, rambling speeches, he laid out his goals and objectives in broad terms, often ignoring the details. His election has ushered in one of the most active 100 days of policy changes of any administration. He is breaking the bureaucracy’s dishware like never before. There are no sacred cows, either in Washington or abroad.
In the broadest context, Trump looks at every aspect of the government’s operation and asks: Why? The question generates uncomfortable answers. Politicians are defending inefficient government agencies, promoting continued fraud and waste, and justifying actions because “that’s the way it has always been done in the past.” Bureaucrats claim that every job is critical for their agency’s operation when they have functioned for several years without appearing in person for work.
The campaign’s “drill, baby, drill” mantra clashes with Trump’s wanting low energy prices, including asking OPEC to add supply to the world’s oil market. He wants a streamlined energy regulatory landscape to make it easier for producers to respond to market price signals. Leveling the playing field by eliminating preferential treatment of fuels and government subsidies allows energy physics and economics to drive results. This is the best way to meet the three requirements — affordability, cleanliness, and reliability — people want from their energy system. It is the best way to elevate people from poverty.
Making the U.S. self-sufficient in energy is a huge task. One area that has received little attention over past decades is our maritime industry, including our shipbuilding capability. Improving this industry is critical for our national defense, which includes our risk of being held hostage by foreign shipowners.
Interestingly, this risk was assessed many times in our maritime history, pre-dating the 1920 Jones Act, which led to contrary remedies being enacted. Governors are targeting the law for its contribution to higher energy costs. Trump’s creation of the Office of Shipbuilding opens the door to serious action to address a neglected economic and national defense issue, including providing career opportunities for our youth. It may eventually lead to reduced energy costs.
The geopolitical turmoil manifests in the government’s threats to levy tariffs against friends and foes unwilling to agree to more advantageous trade terms for the U.S. than the status quo. Investors are worried the battle over reciprocal tariffs is escalating into a global trade war that will spark an inflation uptick, increasing the odds of a recession.
However, inflation is easing, allowing central banks to reduce interest rates, accelerate global growth, and create a better economy. Economists do not see these trends yet. Reaching a better future will be frustrating but worth the pain.
