Sunday, January 22, 2017

No Systems Thinking in Trump's Plans

It’s inauguration time and a new administration is moving into the White house attempting to fulfill its promise to “make America great again.”  A key to Donald Trump’s platform throughout the election had been the need to drive fast and significant change in government structures and systems.  Some Americans find this approach refreshing.  What I’m seeing, though, is a lack of a systems thinking in the plan, and it concerns me greatly.
The U.S. operates as a system.  Federal departments and agencies, businesses, states, citizens, and even foreign entities act as components of the system that interact and drive results that, although far from perfect, enable the country – and to some extent, the world – to function.  As with any system, there must be a clear and unified purpose to help drive objectives and improvement.  The more complex the system, the more important it is to understand how the system works and how the components interact to assure changes do not end up making things worse.
Making large-scale changes to components of a system without understanding how they interact amounts to tampering, and can quickly lead to chaos.  And what I've seen in the comments, tweets, and appointments in the new administration, this appears to be  exactly what's happening.  Talks of closing borders, eliminating the Affordable Care Act, turning education focus to charter schools, cutting environmental regulations, etc. look more like fragmented actions than steps resulting from a deep understanding of how the system operates and where the real gaps lie.  In lean terms, the Trump team is developing countermeasures to problems without truly understanding the causes.
Some examples that appear to result from a lack an understanding the system include:
Import Tariffs  On the surface, raising import tariffs to increase domestic jobs sounds like a good idea.  The effect this has on U.S. purchasing habits and the American and world economies, however, is complex and not easily understood.  For instance, there are many economists who believe that the Tariff Act of 1930, along with the retaliatory responses of many U.S. trading partners was a significant contributor to the Great Depression due to the negative effect on American exports and imports.  Exports fell because of higher tariffs on American-made goods and, because the prices of imported good increased, people bought less overall.
A second, but difficult to quantify consequence of significant tariff increases is the effect on developing nations that rely on access to the U.S. market to continue growing.  The administration wants to build a wall along the U.S.-Mexican border to keep people from crossing into the U.S. illegally.  Since many of those coming into the U.S. from Latin America do so for economic reasons, raising tariffs and pressuring manufacturers to scrap foreign factories to build in the U.S. will result in lost jobs and other problems for those countries.  It seems logical then, that this action could actually increase the number of people attempting to cross into the U.S. to escape poverty.  And this does not take into account the fact poor economic conditions tend to increase drug trafficking.
A third, but rarely considered effect of restricting trade with other countries is reduced influence on the working conditions that exist in some countries.  Improvements in labor conditions in many developing countries have resulted from the influence of American companies and trade groups because of the size and power of the U.S. market.  As we reduce imports, we reduce our ability to influence international labor laws.
Scrapping the Affordable Care Act
The Affordable Care Act (ACA) has been a huge source of political strife since it was enacted in 2010.  Whether you agree or disagree with the effects of the ACA, it is important to understand and recognize that the Act is a component of the healthcare system which, in turn, is a component of the overall American system.
A systems approach to dealing with the problems from the ACA is to improve it – not scrap it and start from scratch.  It includes understanding the problems – i.e., why they are problems and what is causing them – and taking steps to reduce or eliminate them.  Although completely replacing a system may address some of the problems, it is likely to create many others that are not problems with the current system.
Raising import tariffs and scrapping the ACA are just two examples where actions meant to drive improvements can lead to negative consequences if done without a holistic understanding of the system.  As long as I remember, though, American politics has never taken action resulting from a deep understanding the nation as a system.  Fortunately, the changes have rarely been large enough to cause major problems in the American system.  What I’m hearing now about the coming changes, however, I’m very concerned that the damage could be long-term and significant.