Wednesday, January 11, 2017

The power of the bully pulpit

Trump has a powerful weapon to wield against corporate America's free trade mythology:
Some U.S. companies are reviewing potential mergers while others are rethinking job cuts or looking at their manufacturing operations in China for fear of being cast as "anti-American" by President-elect Donald Trump, according to Wall Street bankers, company executives and crisis management consultants.

Having seen some of America's largest companies, including General Motors Co, Lockheed Martin Corp and United Technologies Corp, bluntly and publicly rebuked by Trump on Twitter, many others are worried they may be his next target - especially if they have significant overseas manufacturing, have had U.S. job cuts or price increases for consumers.

"Any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence is WRONG!" Trump, who assumes office on Jan. 20, tweeted in December.

Trump campaigned on an "America First" anti-globalization platform that promised the return of thousands of U.S. manufacturing jobs to economically depressed areas.

That nationalist rhetoric and Trump's willingness to use his Twitter account as a cudgel has so rattled some companies that they are putting on hold mergers and acquisitions that may involve significant job cuts or moving production or tax domicile abroad, out of fear that such deals could be seen as "unpatriotic", several top Wall Street bankers said.
This is excellent news. It also shows how perilously thin the corporate case for free trade is.

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Blogger Salt January 11, 2017 11:05 AM  

Will be difficult repatriating thousands, hundreds of thousands, millions (see Not In Workforce) without culling immigrants, illegal or otherwise.

Blogger Lazarus January 11, 2017 11:05 AM  

There you have it. Globalism is unpatriotic.

Well, that was simple.

Blogger 罗臻 January 11, 2017 11:11 AM  

Trump is leveraging the power of the American consumer. He is like a union negotiator, telling companies if they want access to the American market, they have to pay more. Jack Ma of Alibaba showed the positive way forward: Chinese companies will invest more in the U.S. to import more into China, cutting the trade deficit while increasing total trade.

He and other corporate leaders also show what everyone should already know: corporations already play ball with governments all the time. Often the complaint you will hear is not so much the policy, which may be bad, but uncertainty. Corporations dislike not knowing the rules because it creates delay, but once they have a rule on paper, they will adjust accordingly. Corporations are also only interested in their bottom line and have no interest in creating good policy for the entire economy. They hire lobbyists to cut sweetheart deals for their own company or industry. The idea that corporations would not quickly fall in line with Trump's more nationalist agenda was a pipe dream of free market believers and progressive critics, nothing more.

Blogger S1AL January 11, 2017 11:14 AM  

One of the more important points on which this blog has convinced me is this:

Notional "free trade", meaning low/no tariffs and ease of exchange between nations has very little to do with:

Practical "free trade", which leads to more open borders, job drain to lower-wealth nations, brain drain to higher-wealth nations, and an increasingly detached global elite.

As an empiricist, I am forced to conclude that the notion of "free trade" is thus rendered moot by the evidence. Going forward, it will need to be replaced by peer-trade and well-protected borders.

Blogger Salt January 11, 2017 11:14 AM  

Link to Trump's Presser.

Anonymous A Texan January 11, 2017 11:17 AM  

I hope Trump will also start kicking companies like Cisco in right place and stop this as well:

Of course, we do too many things to shoot ourself in the foot with taxation and regulation, so I hope he can get the cucks in Team R to go along with something actually good for an American.

Blogger pyrrhus January 11, 2017 11:19 AM  

@4 Free trade also leads to increasing instability, as capital moves rapidly from one country to another, and to an increasing welfare burden as more and more people lose permanent jobs and are forced to seek temporary help. Third world countries have been complaining about the instability for decades.

Blogger pyrrhus January 11, 2017 11:23 AM  

Slightly O/T Has the worm turned on the CIA's fake report, haha?

Blogger Dave January 11, 2017 11:24 AM  

Trump just now slammed Big Pharma

Blogger Gareth January 11, 2017 11:36 AM  

As a proud, patriotic and nationalist Brit living in England (that's the England on the island not 'New England :)) I can't tell you how genuinely PLEASED I am to hear all this good news for you guys! The futures brightens for us every day he wields power.

Anonymous Anonymous January 11, 2017 11:40 AM  

It really makes you wonder where our previous presidents' priorities were, obviously not with their citizens well being.

Blogger James January 11, 2017 11:40 AM  

No doubt the multi-national corporations have no loyalty to the USA. The problem with so called free trade is in the policies that encourage these profit seeking globalist corporations to site their manufacturing activities around the world and then allow them to transport the stuff back in to the USA without proper customs and duties and tariffs to balance out the economics involved. The "Austrian" free traders are correct that taxes on such trade increases prices for consumers, but, they are quite wrong and seem very stupid to be forgetting that people are not consumers only, but are also supposed to be producers, and the consuming function should not be advanced disproportionate to the producing function. As a Neo-Protectionist, I would seek to find a balance where a nation consumes based on what it is able to afford to produce and is capable of producing, instead of consuming based on how much it is able to borrow.

Anonymous Anonymous January 11, 2017 11:41 AM  


Trump needs to get Big Pharma out of our schools.

Blogger pyrrhus January 11, 2017 11:46 AM  

@9 Great news. Medical costs and Big Pharma are destroying the US financially...

Blogger Cail Corishev January 11, 2017 12:01 PM  

Well, that was simple.

Indeed. It's amazing how much of a difference it's already made, just to have an elected leader who's on record as favoring American workers over foreign ones. He hasn't even taken office or offered specific legislation yet, and corporations are already changing their ways, or at least trying to look like they are.

So much for cuckservative claims all these years that nothing could be done, it's just market forces, companies can't find American workers anyway because we're all too lazy and stupid. We knew they were lying, but now we're getting proof.

Blogger John S January 11, 2017 12:06 PM  

Haha. Imagine corporations being expected to be patriotic, instead of just the prole cannonfodder for a change. GOPe must be shitting their pants right now as God knows how many of them have exposure of their pizza-related predilections dangled in front of them.

And he isn't even in office yet...

Will the winning ever stop?

Blogger Jew613 January 11, 2017 12:16 PM  

What Trump us pushing was standard USG policy for the first 200 years of the USA. People forget how recently the elite embraced free trade as a central principle.

Anonymous Cyclone Bob January 11, 2017 12:21 PM  

The tide is turning. MSM names the spade, in black-on-white sexual assault in Colorado.

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Anonymous Eric the Red January 11, 2017 12:28 PM  

This is more good news. However, it only affects large corporations, and it does nothing to change underlying structural problems. Without a rollback in regulations, small business has little chance of making a resurgence in the US.

Trump should suspend regulations enacted by all regulatory agencies over the last eight years, and force Congress to review them in detail. He should take Congress to task for ignoring its Constitutional responsibilities to pass legislation, instead of foisting it off on entrenched unelected bureaucrats who have their own hidden political agenda.

Anonymous Longtime Lurker January 11, 2017 12:43 PM  

Trump hasn't even been sworn into office, yet he is single-handedly forcing a wholesale rethink by U.S. corporate leaders about the wisdom of outsourcing manufacturing and service jobs to other countries. Looks like the Pulpit is finally matched with a Bully who knows how to use it properly.

Anonymous a_peraspera January 11, 2017 12:47 PM  

Pretty neat. For decades we've had a class of politician who cared about doing things to benefit their donors (solely). Now here's a guy who's so rich he doesn't need donors, so he's free to think about how to help Americans without getting the frowny face from Soros.

Blogger Dave January 11, 2017 1:00 PM  

Gareth wrote:As a proud, patriotic and nationalist Brit living in England (that's the England on the island not 'New England :)) I can't tell you how genuinely PLEASED I am to hear all this good news for you guys! The futures brightens for us every day he wields power.

As the proud American owner of a Triumph motorcycle built in Hinckley, England; I appreciate your sentiments, and look forward to the re-establishment of the historically strong ties the US had with Britain.

We both know it will be a long, uphill slog to make America great again, and for Britain to follow through with Brexit; but at least we're headed in the right direction and I'm cheered by your optimism.

Blogger bosscauser January 11, 2017 3:02 PM  

Perhaps we let in be sworn in first, hmm?
Only 24 hrs in a day and the guy's done more than O did in 8 years...
Being a business man he hates regulations

Anonymous Napoleon 12pdr January 11, 2017 3:44 PM  

The amusing part will be that in the end, international trade will probably end up increasing under Trump. But it'll be a two-way street, not the one-way valve of today.

Blogger Dave Narby January 11, 2017 5:04 PM  

Free trade is only loosely correlated with GDP. Corruption is highly correlated:

I fear we are barking up the wrong tree here.

Blogger Happy LP9 January 11, 2017 5:20 PM  

Dear Salt, I'd wish you'd join Gab! Love you!

Yes, China is going to hurt regarding the free trade matter of the 1990's Klintons horror policies are gone. (Holder to Lynch are el-gonno, they jacked with free trade and all trade.)

Blogger Happy LP9 January 11, 2017 5:21 PM  

26 Very well done, thank God for ZeroHedge!

Blogger Lovekraft January 11, 2017 5:37 PM  

Trump's consistently blocking the left's 'government as savior' from the discussion, sending them into blind rage.

We must support the notion that economic vibrancy and government restraint are the new standard.

Anonymous #8601 January 11, 2017 6:25 PM  

It is refreshing to see the Bully Pulpit being used properly by a real bully, and I mean that in a good way.

Blogger Rough Carrigan January 11, 2017 7:08 PM  

Former Disney employees who were fired and forced to train their H1B visa replacements filed a lawsuit against Disney. I can imagine Disney trying to settle with them before January 20. I hope those guys refuse any settlement unless they get complete capitulation by Disney.

H1B visas are only supposed to be used, under the law governing their issuance, where a company simply cannot find American workers to do the jobs in question. In some situations, there's a question whether a corporation could have used American workers. In this case, there's none. Disney gave these American workers pink slips and made them train their H1B visa recipient replacements on the way out.

At least if it was some corporate raider type doing this you could shake your head and say, "Well, that's what he's known for." But, like the silicon valley potentates all getting together and agreeing to not poach each other's employees to help keep wages down, this is a pretentious, asshole politically correct outfit.

I hope the plaintiffs get this in front of a jury of blue collar workers and take Disney for everything they've got.

Blogger Snidely Whiplash January 11, 2017 7:09 PM  

Dave Narby wrote:Free trade is only loosely correlated with GDP.
Where on earth did you get the idea that GDP was a meaningful measure of anything? Nothing is less useful as a measure of economic health. The price of tea in China is literally orders of magnitude more important.

Blogger Rough Carrigan January 11, 2017 8:47 PM  

Amen , #32. When Americans started having to pay much more for their health insurance under the fascistic strictures of Obamacare, GDP officially went up.

Nothing more was produced. No greater services were rendered but GDP was officially deemed to have increased by people paying more for the same thing.

This is an increase in production?

Blogger Dave Narby January 11, 2017 10:17 PM  

@Snidely If you're going to argue GDP figures aren't an accurate representation of economic activity, you're going to need an... Argument! Which you didn't make.

Besides which, in this case it doesn't make a fucking rat's ass worth of difference, because even if GDP is gamed, it doesn't change the correlations. Free trade is loosely correlated. Corruption is highly correlated. Case closed.

If we want to make an impact, we should be demanding the swamp be drained. Tariffs are easy. Rooting out cronies is hard. I'll accept that for right now protectionism acts as a win, and rallies the troops and builds momentum (even though it's impact might be long term positive - or negative), but THE. SWAMP. MUST. BE. DRAINED. or nothing will get fixed.

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This comment has been removed by the author.

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