Optimism but not confidence with Trump in charge

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The writer is a contributing editor at the Financial Times, chief economist at American Compass, and writes the Understanding America newsletter

Washington was full of optimism this weekend, but not confidence. At receptions and parties where gossip is the currency, and at podcasts where everyone sells what’s on their mind, positivity reigns supreme. “Trump really has a chance to do this. . . People said. “There’s a lot of upside.”

There is no doubt that this represents a “shift in the atmosphere,” as the comments suggest, especially when compared to an aging presidency that is slowly and painfully approaching its end. The return of a president capable of doing absolutely anything would be a major upgrade by default. But the enormous opportunity to reform governance to bring about a new “golden age,” as the Trump team likes to put it, is matched by no certainty about how his administration is likely to proceed.

For example, everyone wants to talk about artificial intelligence, but not so much because of the excitement around superintelligence as because of the mundane potential for enhancing productivity. The problem is that continuing to improve the models and expanding their ability to be widely applied will require massive investments in infrastructure within barely reasonable timescales.

In one possible world, Donald Trump and his team focus their economic agenda on construction: rapidly developing natural resources, expanding infrastructure, supporting investment, and training the workforce. This would make a lot of sense, but it’s not something they talked about much. Trump himself has been more inclined to focus his enthusiasm on cryptocurrencies, while prominent supporters like Elon Musk and Vivek Ramaswamy have spent most of their energy criticizing American culture and calling for more foreign workers.

Likewise, breaking up the US and Chinese economies has become critical, and Trump has signaled his support for this, including calling for the repeal of China’s “permanent normal trade relationship” status in the Republican Party platform. However, despite issuing an executive order in 2020 to ban TikTok, it is now recasting itself as its savior. A law requiring its parent company, ByteDance, to withdraw service to a US company or shut down by January 19, led to the platform being shut down that day. Users received notification that the company is looking to work with Trump to bring it back. Trump now says he will do just that. In response, ByteDance brought TikTok back online, much to the delight of users.

Is Trump the China hawk determined to reverse the mistakes of globalization, even if Americans have to experience some pain as they climb back out of the hole they dug themselves? Or is he more interested in scoring points because the president who protected TikTok after his predecessor let it languish?

There are countless similar questions. Will the fight over an extension of the Tax Cuts and Jobs Act of 2017 dominate the legislative calendar for the first year? Will the government adopt humane methods to deport illegal immigrants to maintain public support for the measure, or will it proceed in ways designed to provoke backlash and polarization?

Will the administration simply enjoy attacking the excesses of the higher education system, or will it work just as hard to build useful new non-college pathways to good jobs? Will the “Government Efficiency Department” focus on government efficiency or will it create continuous noise outside its scope?

The reasons for optimism lie in the quality of the senior appointments made by Trump, which represent extraordinary improvements compared to his choices during his first term. If management discipline and execution have moved as far as Mike Pence to J.D. Vance, Rex Tillerson to Marco Rubio, or Reince Priebus to Susie Wales, a new golden age may have already begun.

Whereas in 2016 Trump bypassed supply lines of institutions, ideas, and employees, he can now tap into a deep pool of talent and a thick playbook that aligns with his own priorities. Across agencies and White House offices, he is quietly staffing his team with serious players.

But the team’s captain, coach and midfielder is still the same Trump. Not many people did a good job of betting on the decisions he would make in the Oval Office, at least when they expected he would do the predictable thing conventional analysis recommends. The fruit is bigger, juicier and hanging lower than ever, and now everyone is waiting to see what they will pick.