Nobody takes Malaysia’s Budget seriously and here’s why

October 24, 2016

Nobody takes Malaysia’s Budget seriously and  here’s why

by T K Chua

“It is simple; the annual budget can’t instil discipline if there is no oversight. The annual budget can’t function as an instrument of control if borrowing and off-budget activities are allowed to roam free, unrestrained and unchecked.”–T K Chua

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When I read “Why I didn’t watch the Budget speech” as written by Kensi from Sarawak, I found my feelings were the same. For the first time in a quarter century I did not sit through the whole Budget speech. I walked off after the first hour or so.

The Budget has long lost its aura. It is just an annual pomp for fund managers to get excited and for the government to announce some goodies. Whether or not the goodies are carried out as planned is as good as anyone’s guess.

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Malaysia’s National Budget is Petty Cash for this First Couple. When the cash is finished, just borrow more or ask Bank Negara to print more money and then pass the burden to ordinary Malaysians by way of debt service or inflation. That is Najibonomics: Tax and Spend recklessly.–Din Merican

Why do I say our federal budget is meaningless?First, the annual budget has never capped the amount of borrowing that the federal government could incur each year. If the federal government may borrow without restraint, who bothers whether our projected revenues and expenses are adhered to? If revenues fall short, the government could borrow more to fill the gap. If expenses burst the budget, again the government could borrow more.

Where are the restraints and control that the annual budget is supposed to provide? In fact, the annual supplementary budgets are clear indications that the budget has failed to keep government financial indiscipline in check. The government will borrow and spend as it wishes, regardless of the revenue performance or actual expenditure incurred.

Second, the annual budget is just a mechanism to dish out allocations, but never to accomplish its intended outcomes. We mistakenly look at the allocation earmarked for each programme as if it is a fait accompli.

But this is far from true. For example, just look at the allocation for subsidies which the government has always bragged about. It is time for the government to list out how much of the allocation has reached the intended target groups and how much of it was siphoned off by corrupt officials, businessmen and those who could indulge in arbitrage.

Seriously, if budget spending has been constantly effective over the years, I believe there would be no more poor people in this country.

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Third, the annual federal budget is no longer the true representation of government financial commitment and responsibility. Off-budget agencies and activities have now overwhelmed traditional government ministries and departments.

Parliamentary oversight of government taxation and expenditure through the annual budget is at best only half correct.

When non-financial public enterprises and GLCs set up ventures, incur debt and impose contingent liabilities on the government, did they get the approval of Parliament to begin with? When government decides on privatisation projects, including guaranteeing revenues and profits of privatised entities, did it seek the approval of Parliament?

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This guy is excited about the Budget–He is the Minister of Defense: Commissions

I thought the Federal Constitution, (through Part VII – Financial Provisions), is very clear on financial oversights by Parliament – no taxation shall be levied or expenditures incurred unless with expressed authority of federal law. How then did the government spend and borrow so massively through off-budget agencies such as GLCs and Non-financial public enterprises?

It is simple; the annual budget can’t instil discipline if there is no oversight. The annual budget can’t function as an instrument of control if borrowing and off-budget activities are allowed to roam free, unrestrained and unchecked.

T.K. Chua is an FMT reader.

Time to reject race-based socio- economic policies

October 23, 2016

Time to reject race-based socio- economic policies

by Wan Saiful Wan Jan, CEO IDEAS

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Tun Razak was wrong, Najib made it racist and utterly corrupt, so time to go back to Tunku Abdul Rahman’s Vision of Small but Pro-Business Government

The philosophy guiding how a government relates with the people is something that not many Malaysians talk about these days. But if we go back to the early days of this country, ideology used to matter.

In a speech delivered at IDEAS Annual Dinner on February 20, 2016, Tun Musa Hitam, Malaysia’s former Deputy Prime Minister who started his political career under Tunku Abdul Rahman, said, “In those early days of our history, politics was more ideological than material. There were indeed, yes, indeed, two camps in UMNO: the Tunku camp and the Razak camp.

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“The Tunku camp was clearly and unapologetically right-wing, pro-west and pro-business. The Razak camp was allegedly socialist-communist inclined, a brand enough to scare and scuttle people away all the way in those days when communist terrorists were the biggest threat to our independence.”

This was a telling statement, because Musa was suggesting that the liberal administration of the Tunku was eventually replaced by a socialist-communist inclined administration of Tun Abdul Razak Hussein, Malaysia’s second Prime Minister.

If we analyse history carefully, indeed we could see how Razak was leaning in a leftist direction. Among the most significant foreign relations built by Razak was with Mao’s communist China, when he visited the country in May 1974. Razak was also the one who introduced huge government intervention into Malaysia’s socioeconomic system when he introduced the New Economic Policy (NEP) in 1971.

Government domination of the economy is an important feature of a leftist ideology, and this naturally led to the government imposed ethnic-based affirmative action, and all its related policies, that plague our country until today.

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Razak’s ideology was almost completely opposite to the market economy envisioned by the Tunku when he said that Malaysia is a country that believes “in the system of free enterprise”.

We must acknowledge that government intervention has existed since the time of the Tunku. Several times the Tunku too used government powers to stifle dissent. But government interventionism grew much bigger and was formalised under Razak’s administration.

It was Razak’s desire effort to create an ill-defined “social justice” that gave birth to the New Economic Policy (NEP). As a result of their wrong definition of social justice, the NEP was implemented is such a way that nudged us to live our lives along communal lines until today.

Even worse, today we can’t even discuss this supposed temporary policy in rational way anymore. Today we live in a country where if you speak honestly on difficult and sensitive issues, you risk being accused of disloyalty to the country, or worse, being seditious.

It will take a lot more time to change this situation. But it is important for those of us who dream of a more liberal future for the country to persist. We cannot allow the country to continue on the trajectory of big government paved by, as Musa Hitam puts it, Razak’s “socialist-communist inclined” thinking. Instead of a big government philosophy, I propose that we should return to the philosophy of a liberal, small and limited government as originally envisioned by the Tunku for this country.

The liberal belief stems from a commitment to the principle of liberty, which is commonly described as the right to live our lives in any way we want to so long as we do not do any harm to others. It is important to stress the second part of the description: “as long as we do no harm to others”.

A liberal way of life a highly responsible one. We take it as our responsibility to do no harm to others and we acknowledge that we will have to account for any harm that we do. Yes we want to live our lives how we wish. But we also undertake not to harm others. Tunku Abdul Rahman puts it nicely when he said that “Life in this world is short. Let us make use of our lives in the pursuit of happiness and not trouble.”

In fact, the Tunku even put in the Proclamation of Independence that one of the roles of government is “ever seeking the welfare and happiness of its people”. It is not the role of government to stop us from enjoying our happiness in the way we want. Instead the role of government is to help and to allow us to seek our own happiness in our own ways.

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The By-Product of Malaysia’s NEP

As I said above, it will take time before we can truly enjoy the fruits of the Tunku’s vision for liberty for this country. The liberal journey of this country was disrupted in 1970 and that disruption continues until today.

We need to realign the country back to the right trajectory. And the realignment process needs to start with us appreciating the importance of having a philosophy based on freedom and liberty to guide all our policies.

Wan Saiful Wan Jan is the chief executive of the Institute for Democracy and Economic Affairs, (IDEAS)


Here’s Bobby Vinton for Fond Memories

October 23, 2016

Here’s Bobby Vinton–Bringing back Memories

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Dr. Kamsiah Haider is away in Taipei, Taiwan. So it is my pleasant duty to entertain you this Sunday. For this purpose, I have chosen Bobby Vinton, the popular entertainer of my teenage years. It has been such a long time but the songs and the music remain vibrant and soothing. May Bobby Vinton bring back memories of our time and warm the hearts of the generations after ours.–Din Merican

Malaysia: Interesting Times

October 23, 2016

COMMENT: Dean Johns has always been a succinct, lucid and thoughtful writer. I enjoy his articles and am a proud owner of his books. I am also grateful to him (and Steven Gan and Premesh Chandran of Malaysiakini) for allowing me to host his pieces like this one on this blog to reach my discerning readers in 206 countries, near and far.

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Two of a Kind from the same Era

Dean is 70 and I am 77. He is an Australian and I am a Malaysian (not a bigoted UMNO Melayu). Yet intellectually, we  are no different. Born in the same era, we share a passion for Malaysia. We see its potential. Regrettably, we are also witnessing its systemic destruction by a kleptocratic regime under Malay leadership of the worst kind.

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Time is not one our side. Both of us are at our journey’s end. For far too long, indeed very long, he and I have been bystanders. In recent years, our patience has run out.

We have grown very critical of the UMNO-led Malaysian government led by the most corrupt Prime Minister who goes by the name of Najib Razak.  As a result, Dean and I are using our pen to push for change. It is a long shot, no doubt, but change may yet happen when Malaysians finally wake up their amnesia.

We can longer tolerate the nonsense. Dean and I ” find it somewhat interesting to wonder how much longer it will take the majority of Malaysians to finally lose all interest in tolerating, let alone supporting and voting for this accursed regime, and start living in more enlightened times”. We are at our wits’ end, trying to seek an explanation for this indifference (the tidak apa mindset).–Din Merican

Interesting Times

by Dean Johns

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Malaysian Official 1

“May you live in interesting times”, as we all know, is widely alleged to be an ancient Chinese curse in which the word ‘interesting’ is ironically intended to be interpreted in the negative sense of ‘troubled’.

But apparently there is no more evidence for the contention that this saying is actually either ancient or Chinese than there is for its implied proposition that there have ever been times in human history that were other than interesting in the sense of troubled, if not outright tragic, for at least some people, somewhere.

Or, indeed, fundamentally, for all people everywhere, in light of the apparent fact that only we humans, of all living creatures, are uncomfortably aware of the interesting reality that we will all inevitably die.

Thus we struggle to sustain our life-forces for as long and greedily and powerfully as possible, ferociously competing both individually and, paradoxically, as cooperative members of competing families, clans, tribes, races, classes, clubs, ideologies, political parties, systems of government and nation-states.

And perhaps most interestingly of all, a good many if not the majority of us strive to cheat death, or at least to pretend that earthly death is not really the end, with the illusion that some imagined deity or another, and self-identification as one of his/her/its devotees, will somehow ensure us eternal survival.

Given urges, illusions and delusions as confused and conflicted as these, it is as inevitable as death itself that each of us lives in times rendered interesting as in troubling or tragic by everything from or own inner turmoil and interpersonal antipathies to outright civil, sectarian, international and even world wars.

However, this observation leads to the thought that the apocryphal ancient Chinese curse under consideration here should be extended to “may you live in interesting times… and places”.

Because it strikes me, as the end of my life grows more imminent, that though I have most certainly survived through some horrifically interesting times, I have been fortunate to experience most of them from a quite uninteresting and thus relatively safe distance.

In other words, I have been more of a spectator than a participant in most of the most interesting times I have lived through, and so have luckily lived long enough to see some times and places turn from extremely negatively to very positively interesting.

For example, I was born into one of the most tragically interesting of relatively recent times, the 1939-45 Second World War, but as an infant I was both blithely ignorant of this horrific event, and, then located as I was in Melbourne, Australia, about as far from its ravages as it was possible to be.

Similarly, I was too young as well as too far away to participate, as many of my fellow Australian citizens were sadly fated to do, in the subsequent Korean War and Malayan Emergency; too married and too distant in Sydney to be caught-up in the woeful war in Vietnam; and too old as well as far-distant to be involved in more recent armed conflicts on such far-flung battlegrounds as East Timor, the Gulf, Iraq or Afghanistan.

Bad-interesting becoming good-interesting

I have been fortunate, too, to be able to witness if not directly experience the fact that many of the places in which life has formerly seemed, and indeed actually been, about as bad-interesting as can be, have surprisingly become as good-interesting as they could possibly get.

In the 70 years or so of my lifetime, for instance, nations like Germany and Japan have transformed themselves from insufferably and fatally interesting examples of the evils of Fascism into positively fascinating case-studies in peaceful prosperity.

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A Much Admired POTUS

Somewhat similarly, the former USSR, which US President Ronald Reagan rightly dubbed ‘The Evil Empire’, long ago collapsed under the weight of its own economic ineptitude, thus freeing most of its so-called ‘satellites’ in Eastern Europe from its tentacles.

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Donald Trump’s Soulmate

Though unfortunately Russia itself remains interesting in the alleged ancient Chinese accursed sense, thanks to its President Vladimir Putin’s apparent determination to keep the place more interesting for his oligarch and other criminal cronies, as well as for criminal client-states like al-Assad’s all-too-interesting Syria, than for Russia’s ordinary citizens.

And appropriately enough, as the (mis)attributed source of the ancient “may you live in interesting times” curse, China remains as negatively interesting as ever, thanks to its fake designation as a ‘people’s’ republic despite the fact that it remains all-too-obviously a dictatorship of a corrupt capitalist party that still, interestingly, claims to be communist.

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I hope Malaysia can be spared of this menace

Meanwhile, as long as this column is for Malaysiakini and thus must at least mention Malaysia, it has to be said that life continues to be interesting in the same old, same old dreary way as it has been for five centuries or so under a series of colonisers including the Portuguese, Dutch, British, Japanese, then British again and now the self-styled putras of UMNO-BN.

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I miss Saloma and P. Ramlee–Din Merican

Interesting, in other words, only by virtue of the fact that the powers-that-be have so long and so comprehensively stacked the nation’s institutions in their favour as to get away with stealing not just the principal of the people’s cash and publicly-owned resources, but the interest into the bargain.

Though I have to confess I also find it somewhat interesting to wonder how much longer it will take the majority of Malaysians to finally lose all interest in tolerating, let alone supporting and voting for this accursed regime, and start living in more enlightened times.

Malaysia in the dumps

October 22, 2016

Malaysia in the dumps on account of Najib’s racist politics and bad economics

by Greg Lopez

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Malaysia has been governed by the same ruling coalition (Barisan Nasional) since independence in 1957. This coalition provided capable leadership to address the four cross-cutting issues that enabled high and sustainable growth. But the Najib Razak administration appears not only to be faltering in managing these challenges but is actively undermining these achievements to remain in power.–Greg Lopez

Malaysia’s leadership troubles could provide a valuable lesson for other middle-income countries on the importance of effective leadership to sustain long term growth. Malaysian Prime Minister Najib Razak has denied allegations of corruption made by The Wall Street Journal. But can a leader and his administration that has been rejected by the electorate drive long term growth?

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In May 2008, the United Nations Commission on Growth and Development issued a report that attempted to distil the strategies and policies that produced sustained high growth in developing countries. It is clear from the report that politics and leadership are key to successful development. In particular, there are four cross-cutting issues that good leadership delivered: promoting national unity; building high quality institutions; choosing innovative and localised policies; and creating political consensus for long-run policy implementation.

Malaysia is among 13 nations (Botswana, Brazil, China, Hong Kong, Indonesia, Japan, South Korea, Malta, Oman, Singapore, Taiwan and Thailand) that the report identified as having sustained growth rates of above 7 per cent for 25 years or more. These 13 countries had five strikingly similar characteristics: they fully exploited global economic opportunities; they maintained macroeconomic stability; they mustered high rates of savings and investment; they let markets allocate resources; and they had committed, credible, capable governments.

Malaysia has been governed by the same ruling coalition since independence in 1957. This coalition provided capable leadership to address the four cross-cutting issues that enabled high and sustainable growth. But the Najib Razak administration appears not only to be faltering in managing these challenges but is actively undermining these achievements to remain in power.

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The Wharton educated Playboy

At the 13th Malaysian general elections, the Barisan Nasional coalition only managed to secure 47.4 per cent of the popular vote while the opposition coalition secured 50.9 per cent. This is the first time that the ruling coalition has lost the support of the majority of Malaysians. Najib took a presidential approach to the election and committed to spending an estimated US$17.6 billion of targeted development pledges and 1 Malaysia Programs. So it was a shock when the majority of Malaysians opted for a ragtag coalition that included an Islamist party and a socialist party led by a discredited leader.

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Malaysia’s Rosie Mansor, not Rosie O’donnell

Malaysia’s Najib’s popularity had been on a downward trend, from a high of 72 per cent in May 2010 to below 50 per cent in January 2015. But the series of damaging allegations has not only damaged his reputation irrevocably, it has also cemented a negative perception of the government. The majority of Malaysians no longer look favourably upon their government and its institutions. The most recent survey — polled in October 2015 after Najib admitted receiving a US$700 million ‘donation’ into his private bank account — found that 4 out 5 Malaysians were unhappy with the current government.

More damaging perhaps is the fact that only 31 per cent of Malays — the bedrock of support for the United Malays’ National Organisation (UMNO), the dominant party in the ruling Barisan Nasional coalition — were happy with the government’s current performance. The fall among Malays is drastic. It stood at 52 per cent in January 2015 and had never gone below 50 per cent since the independent pollster Merdeka Centre began tracking this data in February 2012. More Malaysians are also of the opinion that the country is heading in the wrong direction. Significantly, this change in sentiment began in the beginning of 2014, several months after the 13th general elections.

In response, Najib has taken several measures to protect his leadership position. These measures have further undermined Malaysia’s national unity, institutions and policy process.

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Najib and Hadi–Malaysia’s Political Laurel and Hardy

Despite the rhetoric of being the leader of all Malaysians, Najib has actively pursued a ‘Malay and Islamic’ supremacy strategy. And he has cosied up with UMNO’s mortal enemy, the Pan-Malaysian Islamic Party. The rise of fundamentalist Islam — as in the rest of the world — is a threat in Malaysia. But Najib has sought to bolster his credentials by appealing to conservative Muslims. This has empowered and emboldened the conservative Islamic elements within Malaysia.

Policy making and implementation have been insulated from public scrutiny since the government of long-serving former prime minister Mahathir Mohamed. But under Najib it has even been insulated from scrutiny by the cabinet, let alone the parliament. All major decisions are made by the prime minister and implemented through a hybrid organisation within the Prime Minister’s Department.

Despite Najib’s active pursuit of policies that are detrimental to Malaysian foundations, his economic track record appears to be sound. Malaysia could become a high income country by 2020. Yet Malaysians remain unimpressed by Najib Razak.

Institutions are not built in a day and the impact of Najib’s measures on Malaysia’s longer term growth prospects remain to be seen. For now, other countries caught in the middle-income trap should closely observe the developments in Malaysia.

Greg Lopez is a lecturer with Murdoch University Executive Education Centre, Western Australia. His research interests are in the interaction between states, societies and markets in the ASEAN region.


Message to Donald J. Tump: Learn to accept defeat when the time comes

October 22, 2016

Message to Donald J. Tump: Learn to accept defeat when the time comes

Austin, Tex. — Richard M. Nixon, the first president to resign from office, was hardly a beacon of moral integrity. Nor was Nixon above demagogy on the campaign trail, infamously fanning the flames of Communist paranoia during the McCarthy era by unjustly painting his opponent in his 1950 Senate race, the California congresswoman Helen Gahagan Douglas, as the “Pink Lady.”

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But the 37th president, as controversial as he was, offers a good example for Donald J. Trump on the importance of putting the country ahead of one’s ego and personal ambition on Election Day.

When Mr. Trump, amid his claims that the voting process is rigged, was asked in Wednesday’s debate if he would accept a losing result in the coming election, he responded by spitting in the face of American democracy. “I will tell you at the time. I’ll keep you in suspense,” he said glibly, as though presaging a reality-show cliffhanger. The next day he told an audience in Ohio that he would accept the results of the election — “if I win.”

He would do well to look at the election of 1960, which pitted Nixon, the Republican presidential nominee and sitting vice president, against his Democratic rival, the Massachusetts senator John F. Kennedy. The two candidates waged admirable campaigns, which included squaring off in four substantive, widely watched debates, culminating with the election on Nov. 8.

The outcome was a wafer-thin victory for Kennedy, who garnered 49.7 percent of the vote and 303 electoral votes, versus 49.5 percent and 219 votes for Nixon. Of the 68 million votes cast, only 119,000 swung the election for Kennedy, who had taken Illinois and Minnesota by the slimmest of margins.

But shortly after Nixon’s concession to Kennedy, which he offered in a gracious telegram to his opponent early on the morning of Nov. 9, reports of voting fraud in Illinois and Texas benefiting the Democratic ticket began to surface. In Chicago, in one instance, 121 votes were counted after only 43 people voted, and 6,138 ballots were cast in a Texas county with just 4,895 registered voters.

The Republican establishment challenged the results in the news media and in state-level demands for a recount. President Dwight D. Eisenhower even offered to help Nixon raise money to cover what could easily have been a monthslong fight. Over the following weeks the Republicans relentlessly pursued charges of voting irregularity in Illinois and 10 other states, betting that if they won there, they could force a nationwide recount.

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But in contrast to Mr. Trump’s rhetoric today, they tended to cast their efforts in patriotic terms; Eisenhower insisted that he merely wanted to show that the federal government “did not shirk its duty” when it came to questions about the electoral process. Unlike Mr. Trump, they started from a position of trust in the system, focusing their charges of specific malfeasance, rather than declaiming the election itself as “rigged.”

Nevertheless, Nixon, while agonized by his defeat and its dubious circumstances, opted not to join in.

At least publicly, he played the statesman; he subordinated his own ambitions for the sake of governmental continuity, ensuring that the country was not thrown off balance at a time when the United States was enmeshed in a Cold War with the Soviet Union. “I could think of no worse example for nations abroad,” he said, “than that of the United States wrangling over the results of our presidential elections, and even suggesting that the presidency itself could be stolen by thievery at the ballot box.” (And, of course, he hoped to have a long political career ahead of him; being seen as a sore loser wouldn’t further it.)

Whether Nixon privately encouraged the recount efforts is almost beside the point; unlike Mr. Trump, he understood that unless rock-solid evidence existed to the contrary, the country needed to have faith in the electoral process and the peaceful transition of power, and it needed to hear from the losing candidate that he did, too. (Some argue, however, that Nixon’s experience in 1960 drove his paranoid turn as president, leading directly to Watergate.)

The good of the country, Nixon averred, was more important than the fate of any one man. When Kennedy took office on a bitterly cold January day two and a half months after the election, he sounded a similar theme: “Ask not what your country can do for you. Ask what you can do for your country.”

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In a bizarre twist, Nixon was an early supporter of Donald J. Trump. After hearing rave reviews about the brash developer from Nixon’s wife, Pat, who had seen him on “The Phil Donahue Show” in December 1987, he wrote Mr. Trump an unsolicited letter. “I did not see the program,” he wrote, “but Mrs. Nixon said you were great.” He added, “As you can imagine, she is an expert on politics, and she predicts that whenever you decide to run for office you will be a winner!” One wonders what Nixon, a political sage, would think of Mr. Trump the “winner” today.

But there’s little doubt that if Mr. Trump winds up the loser on November 8, Nixon, despite outsize flaws in his own character, would advocate putting country above self. Doing anything less would take some of the greatness out of America.