In November of 2016, shortly after he was declared President-elect of the United States, Donald Trump conducted another campaign focused on a very definitive goal: Save 1,400 U.S. jobs at Carrier Air Conditioning in Indiana that were in danger of being outsourced to Mexico. On the 29th of that month, Trump announced on Twitter that a deal had been struck and that the factory would remain in Indiana, along with the jobs that would have otherwise been lost. This was initially seen as a monumental victory, as here was the President-elect fulfilling his campaign promises of working on deals that benefited the American people.
However, as details about the agreement began to emerge, the overwhelming positivity of the outcome began to appear less and less ideal. Unlike the 1,400 jobs saved as originally promised, the final count was closer to 800. In addition, the price tag on the deal was soon revealed to have been $7 million in tax incentives. As a result, this deal that was previously heralded as a victory for the American market started to reveal itself to be a patent case of corporate cronyism, in which a business conducted operations by retaining strong ties between company leaders and political officials, instead of by providing a superior product for consumers.
In the months since, similar interactions between President Trump and private companies seem to have only been exacerbated. Rather than being brought to the public and expanded on in scheduled and anticipated press conferences, these snippets of information are often provided in brief Twitter blasts, in which they are available to the press and the public simultaneously without a moment’s notice. In one recent endorsement, Trump emphatically voiced his support for L.L. Bean in response to co-owner Linda Bean’s PAC donations. By directly compelling his followers to “Buy L.L. Bean” in response to this political support, Trump has opened up an ethical can of worms, so to speak.
In the same vein, Trump has also publically disparaged private companies on Twitter for maligning with his personal political philosophies of protectionism and cost-efficiency. In December, for example, Trump sparred with Boeing, an airplane manufacturing company, for overpricing the production of the Air Force One at $4 million. Despite the validity of this figure being disputed by Boeing itself, Yahoo Finance reported that shortly after that tweet was sent out, the company’s stock dipped almost two percent. Similar statements have been made attacking companies like General Motors for apparently manufacturing their vehicles in Mexican factories and then selling them in the United States.
Stockholders have been made uneasy by this temperamental and spontaneous display of government authority over the successes and failures of private companies. Any single diatribe or endorsement from the President could not only greatly affect the operations of the respective business, but also the personal finances of any private citizen invested in the company. In response, an app has been developed called ‘Trump Trigger’ that notifies stockholders the moment Trump tweets about a company they own a share in, thus giving them the option to buy, short, or sell the stock.
Officially, the Office of Government Ethics has ruled that any federal employee “shall not use or permit the use of his Government position or title or any authority associated with his public office to endorse any product, service or enterprise.” While this law does not apply to Presidents, the act of doing so remains highly irregular and unprecedented. However, this practice likely stems from Donald Trump’s history as a dealmaker for his many business endeavors. Trump has shown a proclivity for making gains by applying his standards to specific businesses on a case-by-case basis, either promoting them or disparaging them to set precedents on how private companies should function under his presidency. This greatly differs from the traditional practice of setting broad laws and policies that apply to all corporations and how they operate in the United States.
Supporters of this trend may argue that this direct response to business practices that differ with the President’s view for America will expedite the process of solving market failures rather than previously relying on a stagnant Congress to legislate these orders of operations. However, the purpose of this bureaucratic process is to ensure that the legislation passed is supported by a majority of representatives. The system of checks and balances and the private sector are both undermined when the President presents his views on corporations as infallible, leading to potentially dangerous financial outcomes.
This practice, should it continue to be a regular occurrence during Trump’s tenure as President, could influence companies to operate themselves in a way that would result in presidential approval. A donation made here, a token factory built there, all seemingly innocuous moves could in actuality serve towards gaining an unprecedentedly lucrative endorsement from the President of the United States. Throughout history, the free market has operated most efficiently and productively it is when free from government intervention, thus allowed to wholly earn the approval of consumers through superior goods and services. In past examples of his deviance from the ethical norms surrounding the practice, President Trump’s endorsements (and rejections) of private companies through Twitter and other means serve to invalidate the separation of government and the market, which can lead to a free market that works more towards political approval than consumer validation.