For now, Trump bears signs of a dealmaker, not a policymaker
WASHINGTON (AP) — He phones. He kibitzes. He cajoles. He threatens. He rewards.
It’s a freewheeling style that President-elect Donald Trump used to stop Carrier from shipping 800 jobs from an Indiana factory to Mexico. And it marks a radical shift from the measured words and scripted events that typify most presidents-elect.
It’s the agenda of a dealmaker, one who seems inclined to take a transactional, ad hoc approach to economic policy — offering some help to this company, perhaps directing a warning to others.
Thursday’s announcement by Carrier that it had reversed its decision to move certain jobs outside the country spotlighted Trump’s inclination to personally intervene in the economy, down to a company’s assembly line.
His public relations victory ran counter to the conservative economic principle that the government should seldom, if ever, intercede to choose corporate winners and losers. It also raised expectations for whatever economic gains he can deliver to his supporters across the country, many of whom have suffered financial setbacks as America’s manufacturing base has shrunk.
Yet few analysts think Trump can repeatedly inject the presidency into individual corporate affairs.
“It’s a great tactical success,” Bill Galston, a senior fellow at the Brookings Institution, said of the Carrier announcement. “But is it a strategic template? Of course not.”
In a similar vein, Trump took to Twitter this weekend to threaten heavy tariffs on U.S. companies that move operations overseas and bring their products back to the United States. In a series of early-morning tweets Sunday, Trump vowed to slap a 35 percent tax on goods brought back to the United States by any business that laid off American workers and built a plant in another country.
To impose such a tariff, Trump would likely need Congress’ approval. Still, he could try to introduce tariffs unilaterally by taking steps such as declaring a national emergency.
Trump said the decision to preserve Carrier’s factory jobs occurred after he had phoned the CEO of its parent company, United Technologies.
Such interventions are rare. As president in 1981, President Ronald Reagan famously waded into a labor dispute by firing more than 11,000 air traffic controllers on strike. But they were federal workers, and Reagan argued that the workers had broken the law by striking.
Early in his presidency, when President Barack Obama intervened in the economy, it faced the gravest financial crisis since the Great Depression. The government launched emergency steps to infuse capital into banks and automakers, while borrowing heavily to fund an economic stimulus to galvanize growth.
Even then, Obama signaled discomfort about aspects of his administration’s direct involvement.
“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” he said then.
Many Republicans condemned Obama’s stimulus and bailouts as ineffective. Among the critics: Mike Pence, now the vice president-elect, and Mitt Romney, the party’s 2012 presidential nominee and now a contender to be Trump’s secretary of state.
By contrast, Trump sees the need for aggressive presidential action in an economy with slow but steady growth. Unemployment is at a nine-year low of 4.6 percent, the government said Friday, and job gains have been solid.
In the meantime, Trump is taking on another Indiana manufacturer that plans to let go of workers and move operations to Mexico. Late Friday, he tweeted: “Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!”
Trump says he must step in because the recovery has failed to help vast swaths of America. He blames what he calls unfair trade deals, onerous regulations and government corruption. The United States has 12.3 million factory jobs, down from a peak of 19.6 million in 1979. Incomes have stagnated or fallen for many workers with only a high school diploma.
The president-elect has promised corporate tax cuts to entice employers to stay. And he has lobbed threats of tariffs against manufacturers that move jobs abroad.
“Companies are not going to leave the United States anymore without consequences,” he said at the Carrier plant in Indianapolis. “It’s not going to happen.”
Yet it’s far from clear how Trump’s deal-making impulses will translate into governance over four years. His administration must draft complex budgets, manage sprawling departments and negotiate with members of Congress who have competing interests.
Those efforts cannot likely prevail in the improvisatory style that surrounded the Carrier agreement. Trump, in fact, noted that that Carrier deal succeeded only because one of the factory workers had said in a TV news report that the president-elect would save their jobs. Trump said he didn’t recall promising during the campaign to save those jobs, even though that pledge had become a theme of his stump speeches.
Federal budgeting requires meticulous planning, noted Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonprofit that favors limiting government debt.
“It cannot be done in an ad-hoc way,” she said. “The very premise of a budget is to look at things comprehensively.”
On many critical economic issues, Trump’s stances invite speculation as to where he really stands. He has proposed tax reforms that he said would help double economic growth to up to 4 percent a year. But outside analyses have concluded that tax cuts of the magnitude he proposes would either swell the national debt or force deep spending cuts.
Higher deficits may increase economic growth in the short term, though nearly all economists say 4 percent growth is unrealistic over the long run. During the campaign, Trump decried the national debt as stifling the economy’s ability to grow.
Once Trump becomes president in January, these contradictions on economic policy will have to be settled. He will have to spell out his views on which spending to increase, which regulations to kill, who receives tax cuts, how to finance infrastructure and how to manage the budget. Those choices will shape how the economy grows and who may benefit.
While Trump has burnished his reputation as a dealmaker, his aptitude as a policymaker is unknown.
“Something is going to have to give,” MacGuineas said. “Budgeting is about being able to say no to some things.”