Keep­ing the US econ­omy safe from Trump’s feel­ings

Belleville News-Democrat - - Opinion - BY RAMESH PONNURU Bloomberg Ramesh Ponnuru is se­nior ed­i­tor of Na­tional Re­view mag­a­zine.

Pres­i­dent Don­ald Trump can’t say he wasn’t warned about Gen­eral Mo­tors.

In June, GM said the var­i­ous tar­iffs that Trump had ei­ther al­ready im­posed or was con­sid­er­ing could “lead to less in­vest­ment, fewer jobs, and lower wages for our em­ploy­ees.” These tar­iffs, the com­pany said, risked “un­der­min­ing GM’s com­pet­i­tive­ness against for­eign auto pro­duc­ers.”

Now GM has an­nounced that it will lay off 14,000 work­ers and close five plants in North Amer­ica. While the tar­iffs are not the only or even the prin­ci­pal cause of these de­clines, the com­pany’s con­di­tion ought to make Trump think twice about the wis­dom of the trade poli­cies he has been pur­su­ing.

In­stead, he has been rail­ing against GM. He said that it is “play­ing around with the wrong per­son” – namely him – and that the com­pany “bet­ter damn well” open a new Ohio plant. And what if it doesn’t? Trump threat­ened GM with the loss of sub­si­dies for its elec­tric cars.

The episode il­lus­trates some chronic fea­tures of this pres­i­dency that have on bal­ance un­der­mined its ef­fec­tive­ness and could un­der­mine the coun­try’s econ­omy, too.

First, Trump tends to make pol­icy spas­mod­i­cally. GM made a de­ci­sion that an­gered him, and he lashed out in pub­lic. The pres­i­dent keeps adding to his rep­u­ta­tion for mak­ing idle threats, and even self­cancel­ing ones.

This is an ex­am­ple. Congress is not go­ing to can­cel the tax cred­its for elec­tric ve­hi­cles, or take any other ac­tion against GM, to sat­isfy Trump’s de­mand for vengeance.

Per­haps there are steps the ad­min­is­tra­tion could take on its own against GM. But nearly any change in reg­u­la­tion or grant-mak­ing de­signed to put the com­pany at a dis­ad­van­tage could be chal­lenged in court on the ground that nakedly tar­get­ing a com­pany for ret­ri­bu­tion is a vi­o­la­tion of con­sti­tu­tional due process and other le­gal pro­tec­tions.

Sec­ond, Trump (like other modern pres­i­den­tial can­di­dates) over­es­ti­mates the pow­ers of the pres­i­dency. Dur­ing the 2016 cam­paign, he said that Ohio’s fac­tory jobs were “all com­ing back” if he won. In a Michi­gan town with an­other GM plant that’s clos­ing, he said: “You won’t lose one plant, I prom­ise you that.”

Now he speaks as though he be­lieves that com­pa­nies will change their strate­gies on a pres­i­den­tial say-so. They won’t.

Third, the dis­tinc­tion Trump’s sup­port­ers some­times draw between his words and his ac­tions does not re­ally hold up. The tweets may some- times be boor­ish, they say, but the poli­cies are sound. Trump’s words can have an ef­fect, how­ever, even when he is an­nounc­ing poli­cies that will never come to be. His shots at GM did at least mo­men­tary dam­age to the com­pany’s stock price.

And, fourth, they may do some more last­ing if sub­tler dam­age. Other pres­i­dents have doubt­less been up­set by cor­po­rate de­ci­sions but have re­sponded in a more con­sid­ered way rather than broad­cast­ing their pass­ing thoughts. There is a norm against pres­i­dents’ bash­ing in­di­vid­ual Amer­i­can com­pa­nies, and that norm, like other norms the pres­i­dent does not ap­pre­ci­ate, ex­ists for good rea­sons.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.