Author Topic: Trump the Caudillo (Read 824 times)

corbe · « **on:** December 11, 2016, 10:55:32 pm »

Trump the Caudillo
1:00 PM, Dec 10, 2016 | By Irwin M. Stelzer

There's going to be a new sheriff in town, or as one businessman put it, "We now have to plan for the big fist in the sky." Doug Oberman, CEO of Caterpillar and chairman of the big-businessmen-only Business Roundtable told his members, "Some of us may bear our turn in the bullseye." And some already have. Donald Trump turned what Theodore Roosevelt called "the bully pulpit"—the platform provided by the presidency—into a bully's pulpit and accused Boeing of "doing a little bit of a number" and overcharging for the next generation of Air Force One. So, "Cancel order." Within minutes, almost $1 trillion was knocked off the market value of the aircraft maker as investors rushed to dump the stock, which has since bounced back. Never mind that no final cost estimates have been made or contracts signed, or specifications agreed for an aircraft that must be able to operate after a nuclear attack. "That's what I'm here for. To negotiate prices," Trump announced to industry leaders who until now have seen his election as an unmitigated blessing.

And why not? Corporate taxes to be slashed. A special low-tax deal on repatriated earnings. Share prices leaping from record to record. With the exception of the very richest, executives can expect reductions in personal taxes. No more inheritance taxes. Bliss was it in that dawn to be alive.

But like the French Revolution that elicited that praise from Wordsworth, the Trump revolution has its less attractive side: the randomly applied, unchecked exercise of executive power. Macroeconomic plusses—lower taxes, infrastructure spending, fewer regulations, faster growth—come in the same package as microeconomic management by the new sheriff. Before taking on Boeing, Trump redeemed a campaign promise by persuading Carrier, a maker of air conditioners, to abandon plans to move some production from Indiana to Mexico. A victory for the president-elect, if having taxpayers pay $7 million to save a handful of jobs can be counted as more than a public-relations victory. Carrier is a subsidiary of United Technologies (UTC), a major government contractor and therefore a company over which any president has substantial leverage. "I was born at night, but it wasn't last night," UTC chairman and CEO Greg Hayes told an interviewer. "I also know that about 10 percent of our revenue comes from the federal government." Larry Summers, former Treasury Secretary put it best: "This was more a mugging than a bribe."

Ford, on the other hand, is hanging tougher. After a half-dozen conversations between Trump and Bill Ford, the motor company's executive chairman, CEO Mark Fields, reaffirmed the company's plans to shift manufacture of its Focus small car from Michigan to Mexico. He told the press, "We have made the decision to move the Focus out, and we're making that investment now." He did add that the Michigan factory would be used to manufacture "new products," but that doesn't change the fact that jobs will still be lost to Mexico. Ford is probably relying on the fact that most experts agree that Trump will not have the legal power to impose the "yuge" tariffs he threatens to levy on any Focus vehicles that Ford imports from Mexico, and that the Republican majority in the House will not back any such move. Paul Ryan and his colleagues believe it is foolish to risk a trade war when their planned reduction in corporate tax rates will be sufficient incentive for companies to keep jobs in America.

The to-be president's enemies' list will not end with Ford. Trump has ordered his staff to compile a list of companies planning to leave the United States, and to set up five-minute calls with the CEO of each one. There's more. Companies fleeing to lower-tax venues are not the only ones Trump plans to expose to his negotiating skills. During the campaign he announced: "As an example of the power structure I'm fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few." CNN, known to some media analysts as the Clinton News Network, was not fair to Trump during the campaign—at least he did not think so. So he wants to scupper the $85 billion AT&T-Time Warner merger. But his antitrust team is made up of rather conventional lawyers, and the Antitrust Division is famous for its independence from political pressures. Or, has been so far. The antitrusters' boss will be new attorney general, Senator Jeff Sessions, a Trump über loyalist. It will be interesting to see if Sessions eschews the politicalization of his department that Obama so often found convenient.

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http://www.weeklystandard.com/trump-the-caudillo/article/2005796