The New Yorker
What with U.S. aircraft carriers sailing in the wrong direction, Attorney General Jeff Sessions describing Hawaii as “an island in the Pacific,” and Sarah Palin, Ted Nugent, and Kid Rock larking around in the Oval Office, it’s been a pretty typical week for the Trump Administration: jaw-dropping, mind-addling, hard to keep up with. With all the chaos and dysfunction at the top, the Administration’s many pro-corporate regulatory initiatives are being somewhat overlooked by both the media and the public at large. This is wrong: these are decisions and actions that will have harmful consequences, and Trump’s own supporters will be among those hurt.
Consider the Environmental Protection Agency, where Scott Pruitt, the former Oklahoma Attorney General who has long served as a protector of the oil and gas industry, is busy hiring fellow-climate-change skeptics to help him carry out Trump’s edict to dismantle the Obama Administration’s Clean Power Plan. The end result seems certain to be increased carbon emissions.
Pruitt’s aides are also drawing up plans to lay off many of the people at the agency who actually believe in environmental protection. In the budget proposal he released earlier this year, Trump called for the E.P.A.’s funding to be cut by almost a third. According to the Washington Post, Pruitt’s staff has drawn up a detailed plan that would eliminate a quarter of the agency’s workforce and fifty-six of its programs, including ones designed to clean up the Great Lakes, Chesapeake Bay, and Puget Sound.
Pruitt is a lightning rod, so the E.P.A. gets a fair amount of attention from news outlets, even, occasionally, from television news programs. This isn’t the case for other agencies whose missions have also tilted sharply right since January, such as the Federal Communications Commission. In 2013, when Barack Obama appointed Tom Wheeler, a former lobbyist for the cable industry, to chair the F.C.C., many commentators, myself included, expressed concern. Wheeler, however, turned out to be a forceful regulator. He rejected the cable industry’s calls to end net neutrality—the principle that Internet-service providers should treat all content providers equally—and supported applying the “common carrier” telephone law to I.S.P.s, rather than continuing to treat them under the less onerous set of rules that apply to “information services.”
Wheeler resigned in January. To replace him, Trump promoted Ajit Pai, another Obama appointee to the F.C.C., but one whom Mitch McConnell, the Senate Majority Leader, had recommended. Under Pai’s leadership, the F.C.C. has already taken numerous steps to roll back regulation and preserve or enhance the power of monopolistic providers like A.T. & T., Verizon (where Pai once worked), and Comcast. On Thursday, the agency moved to eliminate price caps on broadband services marketed to heavy users of data, such as businesses, hospitals, and schools. This change followed decisions to end a program designed to help poor people obtain broadband access, and to reverse an initiative that would have allowed cable customers to buy their own set-top boxes. (At the moment, cable providers force people to rent their boxes at high prices.)
Explaining the decision to deregulate broadband data services, Pai parroted the standard conservative line that “price regulation threatens competition and investment.” The reality is that, in most areas, cable companies face little or no competition. The F.C.C.’s own research shows that close to three-quarters of business customers have a single provider of business data services, and ninety-seven per cent have two or fewer providers. In monopolistic markets like this, the only way to prevent incumbents from gouging their customers is to regulate their behavior.
The inevitable result of Thursday’s ruling will be higher prices for Internet users. As Phillip Berenbroick, a senior policy counsel at the digital-rights group Public Knowledge, pointed out in a statement, “consumers, and American families and businesses will pay dearly for the green light the FCC has given to the unfettered exercise of market power by dominant telecommunications providers.”
Although Pai hasn’t yet targeted the F.C.C.’s broader endorsement of net neutrality, this looks like only a matter of time. This week, he announced that he’s been soliciting views from executives at Internet companies, such as Facebook and Intel, which are vehemently opposed to any change in the rules. On Thursday, the Times reported that Pai “is expected to introduce a plan that would weaken aspects of the net neutrality rules as soon as this month.” When he does, he will almost certainly receive strong support from the White House and Republicans on Capitol Hill.
Underlying all of these developments is a message from the Trump Administration to corporate America: the rules of the game are changing. The message has been heard, and the players are reacting to it accordingly. Dow Chemical, for example, is pressing the Administration to ignore scientific findings that some of its pesticides are harmful to endangered species. In letters addressed to the heads of three federal agencies, including the E.P.A., company lawyers “asked them ‘to set aside’ the results of government studies the companies contend are fundamentally flawed,” the Associated Press reported on Thursday.
Dow Chemical contributed a million dollars to the Trump Inauguration committee, and the company’s chairman, Andrew Liveris, is heading a White House working group on manufacturing. If that seems like blatant influence peddling, ExxonMobil has outdone it. The giant oil company, whose former C.E.O., Rex Tillerson, is now Secretary of State, is demanding an exemption from U.S. economic sanctions on Russia.
In 2012, Exxon reached a big exploration deal with Rosneft, an energy company owned by the Russian government. Following the invasion and annexation of Crimea, the Obama Administration imposed sanctions on Russia, which brought the deal to a halt. In July, 2015, Exxon applied to the Treasury Department for an exemption that would allow it to start drilling with Rosneft in the Black Sea, but this request was turned down. The company “renewed a push for approval in March, shortly after its most recent chief executive, Rex Tillerson, became secretary of state,” the reported on Wednesday.
When Senator John McCain heard about Exxon’s renewed application for an exemption, he tweeted, “Are they crazy?” A State Department spokesperson told the that Tillerson, who received a Russian Order of Friendship in recognition of his role in striking the exploration deal with Rosneft, won’t be involved in any decisions that involve his former firm. On Friday afternoon, the Treasury Department issued a one-sentence statement saying it would “not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions.” Evidently, all the adverse publicity about Exxon’s request for special treatment had an impact. But it and other big companies won’t be put off. They know they have friends in the Administration, including the self-styled populist in the Oval Office.
Also on Friday, Trump signed another of his Presidential edicts, this one ordering a review of two reforms that Congress passed after the banking system almost collapsed in 2008. It is probably fair to say that most Americans don’t know what role the Financial Stability Oversight Council plays, or what powers Orderly Liquidation Authority grants to the federal government in the case of another crisis. But the big banks know all about them, and they don’t like either of them. Ergo, they are on the chopping block.
Whether or not fans of Ted Nugent and Kid Rock have realized it yet, that is how the Trump Administration works.
Note: This post was updated to reflect the Treasury Department’s announcement about denying Exxon’s request.