This editorial appeared in Friday’s Washington Post:
If the Republican Party has stood for anything in recent decades, it is the idea that no one in government, not even the most brilliant of presidents, can allocate society’s resources more efficiently than what President Ronald Reagan called “the magic of the marketplace.” As it happens, the GOP was broadly correct about that – adjusted for social, anti-trust and environmental legislation, about which they were often unduly skeptical. So of all the changes President-elect Donald Trump has brought to his party and, possibly, to policy, none is more potentially radical than his apparent belief that it will be up to him, as president, to order businesses to do what he thinks is in the national interest, or else. The fact that the diktats will be issued by the first career businessman to occupy the Oval Office is ironic but in no way redeeming.
Nor is it clear whether Trump himself is operating according to a coherent plan of action in this regard, much less a coherent theory of corporate responsibility. When he picked United Technologies’ Carrier plant in Indiana as a whipping boy because of its plans to shift production to Mexico, he randomly ignored a neighboring factory that was about to do the same. Later, after a negotiation that succeeded in keeping some of the jobs in Indiana, Trump confessed that he had been surprised everyone took his threats against Carrier seriously. And when a local union official called Trump a liar and said he exaggerated how many Carrier jobs were being saved, Trump retaliated by blaming the union – not callous management, as he had previously – for the fact that “companies flee country,” as he put it on Twitter.
Meanwhile, Trump commenced to bash another company, Boeing, for purportedly overcharging the government for next-generation Air Force One planes. The president-elect’s comments, accompanied, like his attack on United Technologies, by a threat against Boeing’s government contracts, came suspiciously soon after Boeing’s chief executive had offered a measured critique of Trumpian trade policy, though Trump denied a connection.
This is the sort of strong-arming that Republicans rightly condemned when Presidents John F. Kennedy and Lyndon B. Johnson tried to order price cuts in, respectively, steel and color televisions, supposedly to control inflation. It not only threatens the politicization of investment, one of the worst, most corrupting ills that can befall a market economy. Trump’s blunt-force manipulation of business also is doomed to fail. We’re told this is a new “economic nationalism,” as if no one has ever tried autarky and protectionism before, and as if past attempts at presidential manipulation (e.g., Richard Nixon’s wage-price controls) weren’t eventually swamped by irrepressible market forces.
Based on early indications – United Technologies’ chief executive admitted he caved to Trump to preempt an attack on his company’s government contracts – the business community is not yet able or willing to stand up for its own interests. Reining in a president determined to abuse his power in this way is a job for Congress, dominated by Republicans, and they will do it, unless all that talk about free enterprise, property rights and “the magic of the marketplace” was just talk.