Welcome, Generalissimo Trump

We have never had a self-styled strongman in the Oval Office, or at least not in my lifetime. Sure, Republicans like to call Barack Obama a tyrant — often just a few moments after they called him feckless and weak — and Democrats certainly bristled at what they saw as Dick Cheney’s authoritarian tendencies, but we are entering new territory now.

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Early on in the transition, as one CEO after another made the obligatory pilgrimage to Trump Tower, excitement over the prospects of tax cuts and regulatory reform slowly gave way to trepidation. It did not take too many tweets before the new reality of life with Donald Trump in the White House began to set in. Never mind that he killed the Trans Pacific Partnership, he was pulling no punches in demanding that companies that have spent decades streamlining costs and developing global supply chains dismantle that infrastructure and bring the jobs home.

This week, Trump sent the same message to leaders of the pharmaceuticals industry: production must come home and prices must come down. In his introductory comments, he reiterated his complaints against the world at large: that other countries have taken advantage of the United States for decades, and that we have been the victim of currency manipulation by China and Japan, and predatory trade practices that have destroyed our middle class. Sitting round a table with the titans of Big Pharma, one could hear the mix of intimidation and threats that he has honed in his interactions with corporate visitors since election day, and sense the fear of his early morning Twitter attacks.

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This is new territory for corporate leaders, who are used to talking about global supply chains and commitment to shareholder value, and to being the big dog in the room. One after another, the drug industry CEOs tried their best to frame their company’s domestic operations in the most positive light to appease the President, while downplaying their global operations. Even as they suggested regulatory reforms and tax law changes that might benefit their companies and their industry — and the prospect of which has led to the strong stock market rally since election day — Trump made no bones about the fact that he intended to see them bend to his will, not he to theirs.

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None of the executives in attendance came to the defense of their role as global companies. None suggested that what Trump described as a world that has taken advantage of the United States was a world of our making. None of them hailed the global system of research and development that has integrated the brainpower of scientists across the world in the pursuit of new cures to the ravages of disease. None observed that they and other companies, through the systems of free trade and globalization that Trump had just finished attacking, have contributed to a half-century of American leadership in the world during which an estimated billion people have been lifted out of extreme poverty.

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Company struggles this week with how to respond to Trump’s executive order on immigration illustrated how the ground has shifted. CEOs found themselves torn between offending their employees and consumers if they failed to speak out, and and risking retribution if they crossed the President. The President’s attack on Rexnord, an industrial company in Indiana that had plans to shift production to Mexico, and then support for L.L. Bean, stood out as examples of the President plowing new ground in impacting — helping or hurting as his mood dictates — even smaller companies using his social media presence.

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In the wake of a bitter election, boycotts have been springing up from pro- or anti-Trump groups, bringing our politics squarely into every day commerce. Trump’s tweet in defense of supporter and campaign contributor Linda Bean came in response to an anti-Trump boycott targeting the Maine retailer. This week, Trump supporters, angered by Starbucks founder and CEO Howard Schultz’s announcement that the company would hire 10,000 refugees in response to Trump’s executive order, launched #boycottStarbucks.

Non-Trumpian Republicans — including many corporate leaders — supported Trump despite concerns over his temperament. They knew he had ranted and raved against free trade and free markets and Muslims and immigrants, but they convinced themselves that he would moderate when faced with the awesome responsibilities of the job. They convinced themselves that Donald Trump would pivot. Now, these titans of industry are quickly waking up to a reality that they should have learned long ago: Donald Trump does not pivot.

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Even this new evolution of Donald Trump — the self-styled strongman — should not come as too much of a surprise. After all, as with the executive orders that have streamed out of the White House, he is merely acting on what he said he was going to do through more than a year of campaigning. He said he was going to bring back jobs, and we are watching him in real time use the tools available to him to try to coerce companies to do exactly that. It is just that few people can have imagined that within days of his election he would actually begin strong-arming corporate leaders in the manner that he has.

Trump’s public and aggressive efforts to coerce private companies to do his bidding may not have garnered the headlines or the protests of other steps he has taken — after all, deep down, Bernie Sanders and other Democratic activists must love watching corporate big shots squirm — but this is perhaps as dramatic a turn of events as anything we have seen yet, and one with enormous implications for the economy and the country.

Written by

Financial advisor to city and state governments. Lifelong Red Sox fan (don't hold it against me).

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