Let’s keep US econ­omy safe from Trump’s feel­ings

The Modesto Bee (Sunday) - - Opinion - BY RAMESH PONNURU Bloomberg

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

In June, GM said that 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 said 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, GM’s con­di­tion ought to make Trump think twice about the wis­dom of the trade poli­cies he has been pur­su­ing.

In­stead, he’s railed against GM. He said that it is “play­ing around with the wrong per­son” — namely him — and that GM “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 un­der­mined its ef­fec­tive­ness and could un­der­mine the U.S. econ­omy, too.

First, Trump tends to make pol­icy spas­mod­i­cally. GM made a de­ci­sion that an­gered him, and he lashed out in pub­lic. His many fans will ap­pre­ci­ate his di­rect­ness and ap­pre­ci­ate that he is an­gry about the same things that anger them. But the pres­i­dent keeps adding to his rep­u­ta­tion for mak­ing idle threats, and even self-can­cel­ing ones.

Con­gress is not go­ing to can­cel the tax cred­its for elec­tric ve­hi­cles, or take any other ac­tion against GM, to sat­isfy Trump’s de­sire for vengeance. It’s not go­ing to do it in the lame-duck ses­sion, when Repub­li­cans are still in charge, and it is cer­tainly not go­ing to do it when Democrats take the House in a few weeks.

Per­haps the ad­min­is­tra­tion could take some steps against GM. But nearly any change in reg­u­la­tion or grant-mak­ing de­signed to put the com- pany 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. Trump, by an­nounc­ing his goals in pub­lic, has made any such ac­tion harder to de­fend.

Sec­ond, Trump (in com­mon with 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, and he might not even be able to make them sorry for ig­nor­ing his blus­ter.

Third, the dis­tinc­tion Trump’s sup­port­ers some­times draw be­tween his words and his ac­tions doesn’t hold up. His poli­cies are sound, they say, even if his tweets are of­ten boor­ish. Trump’s words can have an ef­fect, how­ever, even when he is an­nounc­ing poli­cies that will never be im­ple­mented. His shots at GM did lower the com­pany’s stock price for a day, but it has re­bounded.

Fourth, they might do some more last­ing if sub­tler dam­age. Other pres­i­dents have been up­set by cor­po­rate de­ci­sions but have re­sponded in a more con­sid­ered way. There is a norm against pres­i­dents’ bash­ing com­pa­nies, and that norm, like other norms Trump does not ob­serve, ex­ists for good rea­sons.

It un­der­girds the rule of law and the free-en­ter­prise sys­tem, re­lated goods that have con­trib­uted to Amer­i­cans’ liveli­hoods. In no coun­try can busi­ness­men make de­ci­sions with no re­gard at all for what po­lit­i­cal lead­ers think. In this coun­try they can and do. That ar­range­ment has gen­er­ally worked out well. It would be a mis­take to dis­card it, es­pe­cially to dis­card it thought­lessly.

We can sym­pa­thize with Trump’s feel­ings about GM, but we should be happy about how lit­tle Trump’s feel­ings have mat­tered in our eco­nomic life — and hope it stays that way.

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