The Donald and the Washington Post

March 22, 2016

The editorial board and several other employees at the Washington Post recently sat down with Donald Trump.  Here is a transcript of the conversation .

Here are some highlights.   Donald rambles a lot but I think I got the kernel of his responses.  I think my edited version does Donald more justice than the sometimes incoherent responses he actually gave. He really is not ready for prime time. At this point in the campaign his responses to questions about foreign policy, international trade, and other issues mentioned on the campaign trail should be more practiced, not the rambling sentiments that any of us might have in a conversation with a co-worker at a lunch break.

WP = Editorial staff at Washington Post, DT = Donald Trump.  I’ve included some context where I thought it might be needed.

WP: “is there a secretary of state and a secretary of defense in the modern era who you think have done a good job?”

DT: “I think George Shultz [Reagan’s Sec’y State] was very good, I thought he was excellent.”  “I think your last secretary of state [Hillary Clinton] and your current secretary of state [John Kerry] have not done much.”  Trump uses the word “your” to indicate that media institutions are partisan and biased, and including the WP in the liberal media. It indicates that Trump’s essential sense of the world is polarized, a game of warball.  That may be the case in Washington but it mutes Trump’s appeal among independent voters who have less polarized outlooks. Trump offered an example of Kerry’s bad negotiating tactics with Iran: “We should have had our prisoners before the negotiations started.”

In response to a question about promoting values like democracy and freedom around the world,
DT: “I don’t think we should be nation building anymore,” indicating that he is not a neo-con. “We’re sitting probably on a bubble and, you know, it’s a bubble that if it breaks is going to be very nasty. And I just think we have to rebuild our country.”   Trump is not the only person who thinks that extremely low interest rates for seven years have over inflated stock, bond and housing values.  Trump immediately changes the subject and endorses infrastructure spending, aligning himself with economists Paul Krugman, Robert Frank, and others who recommend large Federal stimulus programs to repair infrastructure and employ those with low to modest educational backgrounds.  Trump recalls that we built schools in Iraq, and rebuilt them several times when they got bombed “and yet we can’t build a school in Brooklyn. We have no money for education, because we can’t build in our own country. And at what point do you say hey, we have to take care of ourselves. “

WP: “So what would you do for Baltimore [as an example of a city with troubled inner neighborhoods]”

DT: “I’d create economic zones. I’d create incentives for companies to move in. I’d work on spirit because the spirit is so low… unemployment for black youth in this country, African American youth, is 58-59 percent.”  These are called enterprise zones and have been used with mixed success in the U.S. but particularly in Britain.  See this article

WP: “in general, do you believe there are disparities in law enforcement?”

DT: “I’ve read where there are and I’ve read where there aren’t…I have no opinion on that.  We have to create incentives for people to go back and to reinvigorate the areas and to put people to work…we have lost million and millions of jobs to China and other countries.”   When Trump doesn’t like the topic, law enforcement, he switches subjects to an old refrain, jobs lost to China, and now Mexico. “Mexico is really becoming the new China.”

WP, returning to the topic:  “There is disproportionate incarceration of African Americans vs. whites. Is that something that concerns you?”

DT: “It would concern me. But at the same time it can be solved to a large extent with jobs.”  Some economists and social scientists have championed this idea that people in poor neighborhoods will choose  legal employment if presented with better job prospects.  Over time, residents in the area will become more committed to the neighborhood, to the protection of their property, to law and order.

WP: “Baltimore received a lot of federal aid over the years. What’s different specifically about your approach to these issues from what’s been tried in the past, because a lot of effort has been put in just the direction you just described.”

DT: “I think what’s different is we have a very divided country.”  He goes on about how divided the country is, as if we didn’t already know that.  How does that answer the question about Baltimore? “I thought that President Obama would be a great cheerleader for the country. And it just hasn’t happened. You have to start by giving them hope and giving them spirit and that has not taken place. I actually think I’d be a great cheerleader for the country.”

WP: “What presidential powers and executive actions would you take to open up the libel laws?”

DT: “I’ve had stories written about me … that are so false, that are written with such hatred.  I think libel laws almost don’t exist in this country.  I think that [the media] can do a retraction if they’re wrong. They should at least try to get it right. And if they don’t do a retraction, they should, they should you know have a form of a trial. I don’t want to impede free press, by the way.”

WP: “So in a better world would you be able to sue [the Post]?”

DT: “In a better world I would be able to get a retraction or a correction. Not even a retraction, a correction.”

WP: “Would you require less than [actual] malice for news organizations?”  “Actual malice” is a legal standard, a criteria for liability for libel set up the Supreme Court in 1964.  See below.

DT: “I would make it so that when someone writes incorrectly, yeah, I think I would get a little bit away from malice without having to get too totally away.”  What does that mean?

WP: “How are you defining ‘incorrect?’ It seems like you’re defining it as fairness or your view of fairness rather than accuracy.”

DT: “Fairness is… part of the word. I’ve had stories that are written that are absolutely incorrect. I’ll tell you now and the word ‘intent’, as you know, is an important word, as you know, in libel.”  Trump then gives an example of a news account of a protester at a Trump rally.  The video tape is edited to make Trump supporters look guilty of unprovoked violence.  Trump says these are professional protesters with trained voices that can be heard throughout a large hall in order to disrupt Trump’s speech or a question from the crowd.  Trump says that news media accounts do not potray these incidents accurately.

Through several questions various people from the Post try to get Trump to acknowledge that Trump condones violence.  Trump insists that he supports law and order, not violence.  Trump’s campaign manager notes that there are repeated public service messages before every rally that the audience should not confront protestors and to let security personnel do that.  Trump repeats that some protesters, when interviewed, say they don’t know why they are there, implying that the protesters are paid agitators by those who want to make Trump rallies look violent.  Some protesters simply interrupt his speeches with shouted obscenities.  Out of 20,000 attending a rally, Trump claims that there are just a few protesters and that they are strategically placed at the rally venue.

WP:  “given the Supreme Court rulings on libel — Sullivan v. New York Times — how would you change the law?”  New York Times v. Sullivan is a 1964 decision by the Supreme Court that there must be a malice standard applied before reporting about a public official can be considered libel.  “Actual malice” is a legal concept that the media outlet knew the information was incorrect or should have known, i.e. that they exercised little or no effort to find the correct information.  After this decision, a person claiming libel in the U.S. must prove the untruth of something published.  This departed from centuries of common law precedent.  In Britain, for example, the defendant of a libel claim must prove the truth of the information they published.

DT: “I’d have to get my lawyers in to tell you, but I would loosen them up.”  Although Trump is not specific on this, I’m guessing that he would like some balance between the strict U.S. system and the Briitish system.  U.S. precedent was based on a problem that existed in the southern states during the early 20th century.

WP: “Would that be the standard then? If there is an article that you feel has hatred, or is bad, would that be the basis for libel?”

DT: “The Washington Post never calls me. I never had a call, ‘Why – why did you do this?’ or ‘Why did you do that?’ It’s just, you know, like I’m this horrible human being. And I’m not.”  If a news organization makes no effort to validate information, is that cause for libel?  “I want to make it more fair from the side where I am, because things are said that are libelous, things are said about me that are so egregious and so wrong, and right now according to the libel laws I can do almost nothing about it because I’m a well-known person.”

WP: “can you talk a little bit about what you see as the future of NATO? Should it expand in any way?”

DT: “Ukraine is a country that affects us far less than it affects other countries in NATO, and yet we are doing all of the lifting, [European members of NATO are] not doing anything.”

WP: “Could I ask you about ISIS, speaking of making commitments, because you talked recently about possibly sending 20 or 30,000 troops”

DT: “I said the generals, the military is saying you would need 20- to 30,000 troops, but I didn’t say that I would send them. I would put tremendous pressure on other countries that are over there to use their troops and I’d give them tremendous air … support because we have to get rid of ISIS. I would get other countries to become very much involved.”

WP: “What about China and the South China Sea?”

DT: “We have trade power over China. I don’t think we are going to start World War III over what they did, it affects other countries certainly a lot more than it affects us. I always say we have to be unpredictable. We’re totally predictable.  And predictable is bad. Sitting at a meeting like this and explaining my views and if I do become president, I have these views that are down for the other side to look at, you know. I hate being so open.”

WP:  Asks about Iraq and ISIS

DT: “We then got out [of Iraq] badly, then after we got out, I said, “Keep the oil. If we don’t keep it Iran’s going to get it.” And it turns out Iran and ISIS basically—”  Trump is interrupted but I wonder if he was going to say that Iran and ISIS were conspiring to get Iraq’s oil?  Iran and ISIS are blood enemies.  Iran embodies the Shia sect of Islam, ISIS is Sunni.

WP: “How do you keep it without troops, how do you defend the oil?”

DT: “I would defend the areas with the oil [with U.S. troops].”  Asserting that Iran is out for Iraq’s oil, Trump says, “Iran is taking over Iraq as sure as you’re sitting there. And I’ve been very good on this stuff. My prognostications, my predictions have become, have been very accurate, if you look.”

WP:  Asks Trump about his claim that he could use trade as a diplomatic cudgel against China’s territorial ambitions in the South China sea.  These disputes involve Vietnam, the Phillipines, and Malaysia.

DT: “You start making it tougher [for Chinese exporters]. They’re selling their products to us for… you know, with no tax, no nothing. If you’re a manufacturer, you want to go into China? It’s very hard to get your product in, and if you get it in you have to pay a very big tax.” “I don’t like to tell you what I’d do, because I don’t want to…”

WP: “This theory of unpredictability …there are many people who think that North Korea invaded South Korea precisely because [Secretary of State Dean] Acheson wasn’t clear that we would defend South Korea. So I’m curious, does ambiguity sometimes have dangers?”  Acheson served under Truman from 1949 to 1953.  In 1950, the N. Korean People’s Army crossed the 38th parallel to invade South Korea.

DT: “President Obama, when he left Iraq, gave a specific date – we’re going to be out. I thought that was a terrible thing to do. [The enemy] pulled back, and after we left, all hell broke out, right?”

WP: “What you’re saying [about European NATO members] is very similar to what President Obama said to Jeffrey Goldberg (Atlantic article) in that we have allies that become free riders. Do you have a percent of GDP that they should be spending on defense? Because it’s not that you want to pull the U.S. out [of NATO].”

DT:  “No, I don’t want to pull it out. NATO is costing us a fortune and yes, we’re protecting Europe but we’re spending a lot of money.”  Again, nothing specific in answer to the question.

WP:  “does the United States gain anything by having bases [in Japan and S. Korea]?”  The Post cites an unnamed public source that the U.S. pays 50% of non-personnel costs to maintain the bases.

DT: “I think we were a very powerful, very wealthy country. And we’re a poor country now. We’re a debtor nation.  We’re spending that [money] to protect other countries. We’re not spending it on ourselves. We have armor-plated vehicles that are obsolete. The best ones are given to the enemy.”  Donald relates that the son of one of his friends has served three tours in Iraq and Afghanistan.  “He said the enemy has our equipment – the new version — and we have all the old version, and the enemy has our equipment.  “We send 2,300 Humvees over, all armor-plated. we have wounded warriors, with no legs, with no arms, because they were driving in stuff without the armor. And the enemy has most of the new ones we sent over that they captured. And he said, it’s so discouraging when they see that the enemy has better equipment than we have – and it’s our equipment.”

There was more, including someone at the Post asking about the size of Donald’s hands.

Regulation Riddle

I’ll continue my look at favorite myths of both the left and right. This week it’s the right’s turn.

A familiar myth of conservatives is that over-regulation led to the decline of manufacturing in the U.S. Is this true? While labor and environmental regulations in a well developed country like the U.S. may play some part in the total cost of a manufactured good, they are not the only costs. Below is a chart from the Bureau of Labor Statistics showing a comparison of labor costs in the U.S., China, Mexico and a few other areas.(Click to see larger image in separate tab)

As we can see, Chinese manufacturing companies have a huge advantage in this area. There are few labor regulations and those regulations which are in place are loosely enforced. The U.S. would have to abolish almost all of its labor regulations regarding minimum wage, overtime, Social Security, Unemployment insurance and Workmen’s Compensation and they still would not be competitive with China. Chinese manufacturing plants enjoy a host of other competitive advantages, according to Manufacturing News: many do not have to pay for the land their factories are built on; many companies do not pay income taxes, property taxes or value-added taxes. In rural areas, manufacturing plants pay only enough to compete with the small, if any, compensation that an overworked person can make in subsistence farming. Parts of Mexico enjoy the same advantages. If minimum wage laws were abolished in the U.S., would you take an assembly job for $2.60? If so, then we could stay competitive with Mexico and China.

How much manufacturing have we lost over the past two decades?  According to the Small Business Administration (SBA), there were almost 28 million private businesses in the U.S. in 2007. 22 million were what are called non-employer firms, i.e. businesses that report no employees.  These would include people who work for themselves as sole proprietors or Subchapter S corporations. In 1988, 6.5% of private employer businesses were classified as manufacturing and they accounted for  22% of private employment.  In 2007, only 4.7% of businesses were classified as manufacturing, accounting for 11% of private employment.  If we had the same percentage of employment in manufacturing that we did in 1988, we would have approximately 13 million more people employed.  The Bureau of Labor Statistics (BLS) reports  that the number of unemployed was 14.8 million in September.

There is no magic formula that will enable us to compete in manufacturing and assembly industries which can produce with low cost, marginally educated labor.  The edge we have and must maximize over newly industrializing nations must be a more educated workforce, one which can command the higher precision and more complicated manufacturing industries.  Improving educational standards is a multi-decade commitment of dollars and community.

So why do conservatives consistently trumpet regulations as the chief cause of the decline of manufacturing jobs in this country? Because it gives them a justification for policies to reduce the existing labor and environmental regulations. Conservatives know that, if they advocated abolishment of many or all of these regulations in order to be competitive, most of the voters would turn away from them in disgust. So they promise that some reasonable reduction in regulations will make a big difference, hoping that the voters will buy the argument on its plausibility without checking the facts.

Mexico Truckin’

Besides the AIG retention bonus fiasco in the news this week is the start of a trade war between Mexico and the U.S. In the $410B omnibus spending bill that President Obama signed recently was a provision to halt an 18-month pilot program that allowed a few Mexican trucks beyond a border buffer zone.

We will hear a lot of accusations from those on the free trade side against the narrow self-interest of the Teamsters, the Owner-Operator Independent Drivers Association’s (OOIDA) , labor unions in general, and claims that “Congress and President Barack Obama are catering to the Teamsters union.”

From those on the labor, jobs and safety side we will hear this: “the true purpose of the program was to allow American trucking companies access to the Mexican drivers, who often are paid less than half of prevailing U.S. wages, and allow them access to trucks maintained to much more lax safety standards than those in the U.S., further reducing costs for American trucking companies hiring Mexican trucks and their drivers.”

What is this accusation and concern based on? “From 1992-2002 some 1,300 Mexican-domiciled companies — all of which were majority U.S.-owned — received ‘certificates of registration’ to deliver ‘exempt commodities’ from Mexico to the U.S.” Source . In short, U.S. truck companies set up shop in Mexico. Did they use cheaper labor? Probably.

From a Feb. 23, 2007 press release from the U.S. Dept of Transportation (USDOT): “U.S. trucks will get to make deliveries into Mexico while a select group of Mexican trucking companies will be allowed to make deliveries beyond the 20-25 mile commercial zones currently in place along the Southwest border.”

“[U.S. Transportation] Secretary Peters said the new demonstration program was designed to simplify a process that currently requires Mexican truckers to stop and wait for U.S. trucks to arrive and transfer cargo. She said this process wastes money, drives up the cost of goods, and leaves trucks loaded with cargo idling inside U.S. borders. The Secretary added that under current rules, U.S. trucks are not allowed into Mexico because the United States refused to implement provisions of the North American Free Trade Agreement that would have permitted safe cross-border trucking.”

How slow do the wheels of our government move? After 9/11, glacially slow. “In 2001, Congress authorized the cross border inspection program and listed 22 safety requirements that had to be in place before other steps were implemented.” These included improvements in U.S. border stations, inspection and documentation procedures.

So what conditions did Mexican truck drivers have to meet? “The regulations require all Mexican truck drivers to hold a valid commercial drivers license, carry proof they are medically fit, comply with all U.S. hours-of-service rules and be able to understand questions and directions in English.”

How do shipments not under the program cross the border from Mexico to the U.S.? The W.P. Carey School of Business at Arizona State U. reports “First, a Mexican vehicle drops off its shipment near the U.S. border. The goods are then picked up by drayage companies that specialize in the time-consuming hop across the border and through U.S. Customs. Once in the United States, the shipment is loaded onto an American truck en route to the final destination, or held in a warehouse until it can be picked up.”

The unpredictability of the delay in shipment makes it difficult for those U.S. companies in the supply chain, waiting for the goods. “The inspections can delay shipments for hours or even days. As it stands, the process generates pollution, raises costs for shipping companies and exasperates producers and retailers. For produce, delays mean lost freshness and quality.”

Here’s a Feb. 9th, 2009 report from USDOT:

“This final report presents the status of our review of the Department’s ongoing North American Free Trade Agreement (NAFTA) cross-border trucking demonstration project, at the conclusion of the first year of the project. The Department initiated the demonstration project on September 6, 2007, for 1 year, and extended the project for 2 additional years on August 6, 2008.” The project was due to end on August 6, 2010 but the omnibus bill effectively ended the project early by stopping any spending for the project.

A summary of the report’s finding:
“Demonstration Project Lacks An Adequate Number of Carriers and Participants Are Not Representative In Some Respects of Mexican Carriers Likely to Conduct Long-Haul Operations in the United States. Based on our analysis, at the end of the first year of the demonstration project, participants had lower out-of-service rates than all U.S. carriers, but FMCSA [Federal Motor Carrier Safety Administration] had not defined or enrolled an adequate number of Mexico-domiciled carriers to provide statistically reliable results, as required by Congress.”

“Only 29 of 100 projected Mexican carriers were admitted to the project and 2 of those carriers have since withdrawn. This level of participation is not adequate to yield statistically valid findings. Only 118 of a projected 540 trucks have participated.”

The findings were by an independent panel in August 2008. The FMCSA decided to continue the project for another 2 years. For those on the free trade side, we have heard the better safety record portion of this report. We have not heard about the inadequate participation rate.

Sounds simple. Inadequate participation. Project cancelled. But there’s more:

“Trinity [a Mexican trucking company with a better safety record than many U.S. trucking companies] officials informed FMCSA that requirements to check every truck during every border crossing were proving costly to its operations. Our analysis showed that when Trinity was participating in the demonstration project, it received an average of 16 inspections each day. When not participating, the inspection rate dropped to less than one inspection per day.”

Trinity dropped out of the program. Trucks fully participating in the study carried GPS trackers. No doubt, they received extra attention from the “approximately 1,700 law enforcement personnel from 16 states … and the International Association of Chiefs of Police (IACP).” The line between diligence and harrassment is a matter of viewpoint.

“The Owner-Operator Independent Drivers Association’s (OOIDA) claim that Trinity had received over 112 violations per truck during the year prior to the demonstration project was substantiated”. Violations! Poor safety by Mexican truckers!

But OOIDA was trying to pull a fast one. The report continues “but OOIDA’s claim did not indicate that Trinity’s out-of-service violations numbered only 74, or an average of 7.4 out-of-service violations per motorized vehicle over the 1-year period. Trinity’s out-of-service rates were lower than similar rates for United States carriers during this same period.”

Competition. Protect jobs. Free market. Safety. Tough economy so buy local. More competition means better prices. The rhetoric on both sides of the debate will contain many half-facts because half-facts are simpler than full-facts. There is a witticism “If you think you know [blank], then you haven’t studied [blank] enough.”