The Art Of The Autocrat
Last week, Trump made a deal with Carrier (and its parent, United Technologies) to keep 800 jobs in Indiana rather than sending them to Mexico. Indiana agreed to give Carrier $7 million in tax breaks, and Trump assured United Technologies (UTX) that its $6 billion a year in military contracts would be secure.
Then Tuesday morning Trump attacked aerospace giant Boeing (BA) – tweeting: “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” Later he added “We want Boeing to make a lot of money but not that much money.”
Boeing shares immediately took a hit (but recovered by early afternoon as the company began to explain itself).
After which Trump turned Mr. nice guy. “Masa (SoftBank) of Japan has agreed to invest $50 billion in the U.S. toward businesses and 50,000 new jobs,” he tweeted shortly after Masayoshi Son, CEO of the company, arrived at Trump Tower in New York. “Masa said he would never do this had we (Trump) not won the election!,” Trump added.
I wonder what Trump promised Masa.
The art of the Trump deal is to use sticks (public criticism) and carrots (public commendation plus government sweeteners) to get big corporations to do what Trump wants them to do.
This isn’t public policy making. It’s not about changing market incentives. It has nothing to do with lawmaking. It’s a drop in the bucket in terms of jobs.
In reality, it’s the arbitrary and capricious use of personal power – hitting stock prices and turning public opinion against companies Trump doesn’t like, and raising stock prices and public opinion toward companies Trump does like.
Don’t be fooled into thinking Trump is being guided by anything other than his own random, autocratic whims. He could have attacked or lauded any one of thousands of big companies that are creating American jobs, or creating jobs abroad, or charging the government too much for their products.
This is the work of a despot who wants corporate America (and everyone else) to kiss his derriere.
Disclosure: None.
The last thing we want is hot Asian money to come in and buy up our assets which have been mainly buying up hot properties. It helps #Trump's assets but at the cost of out of control housing inflation. I have the feeling #Softbank's deal will only make more Americans homeless although no one knows the details because he is not President and feels that he has no need to disclose deals he makes in the name of the American people. This sounds very Hillaryish and is why people didn't want her in office. The perception of corruption is another word for this secret deal making.
I too would like to know what #Trump has been offering all these companies to close these deals. I don't trust him. But saying the deal with #Softbank will only lead to more homelessness is a big leap. What are you basing that on?
Look at Vancouver Canada as an example. Mass foreign money going into buying up property and not much else is making life miserable for many living there even if it is now on the street. Be careful what one wishes for.
I am not nearly as concerned as the two of you. #Trump is a lot of things (many of them bad). But he is a great deal maker - I'd much rather have him on our side of any negotiation. And while we may not be privy to the finder details, when were we ever?
Did #Obama let us know about his deals, such as when he gave hundreds of million (maybe more) in ransom to #Iran to secure the release of American? Or when he reached a nuclear agreement with Iran, which entrusted them to inspect their own facilities?
We've been on the losing side of deals for a long time. Trump will squeeze the best arrangement he can.