Given the explosive nature of the discussion of foreign (mainly Russian) interference in the 2016 election, and the actions of the Trump team vis a vis Russia, other important Trump news has disappeared off the grid. One of those items presents both economic and ethical problems. This is unseemly interaction by Trump and company with the business community. There are two primary ways this intervention is happening. One is through his use of tweets, and the other is his meetings with CEOs.
People acted surprised that the stock markets took a small hit and then started climbing after the election of Donald Trump. My question would be “Why not?” One thing that Trump has been consistent on is deregulation – across the board, in every area, including environmental protections. So, with a removal of financial regulations waiting in the wings, the stock market (always an emotional indicator) took off. I would issue a word of caution to the markets, they can easily assume the same volatility as the President-elect. A climbing market is as reflective of volatility as a falling one.
Trump’s tweets have become so ubiquitous I am surprised that some enterprising cartoonist hasn’t started a strip with that as the central theme. Trump’s fits of pique, or just spin the bottle selection, at particular companies. A bad tweet can cost a company billions of dollars, potentially driving them out of business. Meanwhile, a (rarely) positive tweet could have a comparable rush of investors.
One glaring example is the issue of Boeing and the cost of the new Presidential airplanes. While Boeing lost a reported $2 billion on this, and renegotiated with the President-elect (who by the way has no rights to be making these kinds of deals, nor independently dickering for goods and services) for a cheaper plane. Aside from all the in-your-face issues are three more. One – the cheaper plane may (and likely does not) meet the necessary specs of the original. Two – the European and government supported Airbus is the only other manufacturer capable of producing planes of this size and type. This would put the necessarily secret capabilities and protection of Airforce 1 and 2 in the hands of the European consortium. Three – Boeing is a major military contractor. Driving them out of the market would likely be a very poor idea.
While we are on Trump tweets and their apparent power, it also makes them highly marketable and profitable. Imagine that someone knew when Trump was going to ‘tweet out’ (negatively or positively) a company. That person could either buy or sell said stocks ahead of the tweet, or sell the information to others that such a tweet was coming. This then becomes a new form of ‘insider trading.’ However, I am not sure that it is even against the law to traffick in this kind of info. Further, first in line to potentially profit is the Trump family.
The other concern are these meetings between Trump and various individual business owners and collective groups (like the tech CEOs). The government is responsible for regulating these business, and Trump’s negotiations with them may actually cross the line. Once again putting Trump in two places in a negotiation. Josh Boak wrote an excellent article on this. Under the title “Trump’s CEO Meeting Raise Ethics Questions” he says:
“President-elect Donald Trump’s meetings with CEOs seeking federal approval for major mergers are raising red flags for ethics lawyers concerned about the possible erosion of a firewall between the incoming White House and regulators reviewing those billion-dollar deals.”
“Presidents typically keep their distance from such reviews, so as not to appear to be exerting political influence on a regulatory process intended to evaluate the impact a merger could have on competition and consumers. Trump’s private sessions suggest he may be less worried with appearing to be close to pending deals that require government approval.”
So is Trump, who promotes himself as one of the top business leaders in the country, deliberately running past ethical (and legal) boundaries. Or, is he a bumbling fool so caught up with his own power that he feels that little things like rules and laws do not apply to him. In other words, Trump now feels that he is above the law. Quite honestly, it appears that the latter is the case. Increasingly we are hearing Trump or his surrogates stating that the rules don’t apply to the President. This is not dissimliar to Richard Nixon’s belief and statement to interviewer David Frost:
Frost:…Would you say that there are certain situations – and the Huston Plan was one of them – where the president can decide that it’s in the best interests of the nation, and do something illegal?
Nixon: Well, when the president does it, that means it is not illegal.
Trump has apparently taken this to heart, seemingly unaware that Nixon ended up <leaving office to avoid being>(1) impeached.
[Feature Photo: The technology sector CEOs invited to the Tower. (screen capture from CNBC)]
(1) correction from Pierce R. Butler