Why chaos in the Trump White House is bad for business
Donald Trump thrives on chaos, but American businesses don’t.
In the first 13 days of his four-year term, the new president has unleashed a torrent of inconsistent and, at times, incoherent orders, threats and promises that have only increased the uncertainty that business leaders say they abhor.
Increasingly, American citizens and businesses are beginning to realize what a Trump administration means: A national government untethered to the rule of law or to constitutional principles, devoid of an overarching ideology or purpose except blind nationalism, and the care and feeding of a wounded child-president’s ego.
In addition to the normal sources of uncertainty, American businesses must now contend with chaos. They must recognize that the usual procedures, the institutionalized checks and balances, and the continuity of American traditions and values no longer apply.
So far, foreign-student applications to major U.S. colleges are stable or have increased for the next academic year, but higher education officials are bracing for the potential impact of President Trump’s executive order to temporarily suspend travel from seven Muslim-majority countries. Here’s what’s at stake. Photo: Rajah Rose for The Wall Street Journal
I’m not exaggerating. Trump promised to change the way Washington works, and he has.
Chaos is Trump’s signature move in business, on his reality-TV shows, in campaigning and now in governing, writes political reporter/pundit Chris Cillizza. Trump likes to make the decisions, and he likes to keep his underlings guessing what he’ll do next.
That kind of management structure can produce spectacular successes, but also spectacular failures. That might be acceptable in a private business owned by a single person, but not in a democracy of 325 million, particularly when the president did not win a plurality of votes, much less a majority.
“His presidency is in chaos, and it’s apparent to all but most of his serious defenders,” said Carl Bernstein on CNN.
It’s not just liberals and reporters who think it’s been a mess so far.
Newt Gingrich, a big supporter of the president, said the early days of the Trump administration were like an off-Broadway play that wasn’t quite ready for the big time. And one anonymous White House official lamented that Chief of Staff Reince Priebus was “under-competent.”
As harmful as chaos is to our democracy, it’s really bad for business.
If the president can declare unilaterally that hundreds of thousands of people who have entered America legally and who have complied with all of our laws for decades are suddenly too dangerous to enter the country, what else could the president do? wondered Matt Levine of Bloomberg View. “The reason the U.S. is a good place to do business is that, for the last 228 years, it has built a firm foundation on the rule of law. It almost undid that in a weekend,” Levine wrote.
“Investors need to feel that there is fairness and a set of rules that everyone must adhere to,” said Josh Brown on The Reformed Broker blog. “No one would build a house on quicksand and no one would exchange currency for pieces of paper in an environment where legal protections no longer mattered.”
It’s not just the words of Trump’s executive orders that makes these observers call Trump’s style “chaotic.” It’s also the process of stunning incompetence, in the words of Benjamin Wittes, editor of the Lawfare blog, which specializes in national security policy.
Rex Tillerson Sworn In as U.S. Secretary of State
Former Exxon Mobil Chief Executive Rex Tillerson was sworn in as U.S. Secretary of State by Vice President Mike Pence in the presence of President Donald Trump at the White House on Wednesday. Photo: Reuters
The executive order to ban the entry of visitors from seven Muslim-majority countries didn’t go through the normal channels of government, with input from experts who could assess its legality and its wider implications. The process was chaotic and insular, leaving even the White House chief of staff uncertain as to what the order actually required. The people at Customs who had to implement the order were equally in the dark.
This is a pattern in the Trump White House, and it’s probably a deliberate one.
Most businesses want a policy process that’s transparent, fair and orderly, but what they get from Trump is a process that depends a lot on what is on Trump’s mind (or what his gut feels) at the time the decision is made. Instead of laws, regulations and principles guiding us, we have the whims of one man.
We’re only 13 days into the administration, but already we’re more uncertain than ever about what Trump will mean for a lot of really important issues.
Trade, taxes and the dollar policy
For instance, what will Trump do about foreign trade? Already, he’s withdrawn from the Trans-Pacific Partnership, signaled his intention to withdraw from NAFTA if it can’t be renegotiated to his satisfaction, and angered our third-most important trading partner by demanding that it pay for the Mexican border wall. His top trade adviser has said that American companies need to eliminate their global supply chains and relocate them to America.
Will Trump brand companies that have global operations as un-American? Will he declare China to be a pariah? Impose punitive tariffs on imports from China, Mexico or perhaps on all imports? Will he start a trade war with Germany? We don’t know, and we don’t know how these decisions will be made.
What about corporate tax reform? Trump has been vague and contradictory about Republican proposals for a border adjustment tax as part of a comprehensive reform plan. In another display of stunning incompetence, his press secretary first told reporters that Trump wants to slap a 20% tax on Mexican imports to pay for the wall, then he told them that the tax would apply to all imports, and then he backtracked on the idea, saying it was just one of many options.
That’s not the way to gain the confidence of business leaders, or of our global partners. Or of reporters. Not that Trump cares about any of that.
What about the foreign-exchange value of the dollar? Does Trump want a weaker dollar to encourage American manufacturing, as trade czar Peter Navarro has been saying? Or does he want a stronger dollar, as incoming Treasury Secretary Steven Mnuchin said? Trump himself, as on so many issues, seems to have endorsed both views.
Health care and federal spending
There’s just as much chaos in other important areas. Will there be a replacement for the Affordable Care Act, and what will it look like specifically? Will there be a big increase in federal spending on infrastructure, and how will those dollars be apportioned?
Will Trump crack down further on legal immigration, as suggested by a report that he wants to deport immigrants who take jobs from Americans and deport immigrants who don’t have jobs? Are there any immigrants — aside from Melania — that he doesn’t want to kick out?
Will Trump continue to shame and bully American companies that have global operations? Will CEOs continue to cower before him? Will he eliminate regulations that businesses depend upon to ensure a level playing field and a vibrant economy? Will Trump use his office and the entire government apparatus to further his own business interests, which are shrouded in the utmost secrecy? Will Trump pack the Federal Reserve to maintain low interest rates forever? Will he gut Social Security and Medicare, as congressional Republicans and his own budget director want?
Fear of Trump
Perhaps the most important unknown is how much independence Congress will assert over these matters. So far, the Republican leaders have completely fallen behind Trump, and not because they think Trump is a wise ruler. The Republicans fear their president more than they admire him.
It’s normal for the early days of an administration to be bumpy and uncomfortable, but what makes the Trump administration so different is that no one knows what Trump (and his small inner circle) wants, beyond a vague promise to put America first.
Where is Trump’s North Star — in his navel?
White House counselor Kellyanne Conway has told us that we need to judge Trump on what’s in his heart, not on what he says. But businesses need more clarity than that: They want a nation where the laws and rules are written in books after due process, not in the fickle heart of one man ruled by emotions.