Real Trumpism Has Never Been Tried

A News Roundup

Good morning! Here is today’s list of tariffs, subject to change at any time. Good luck with your business planning.

Is there any such thing as free-market authoritarianism? Part of the weird appeal of Trumpism is the notion that it will lead to smaller government, less regulation, free markets—all things that some of us have wanted—and it will all happen quickly, right away, because it will mandated from the top down by an authoritarian executive.

But this is an illusion, and its believers should have known better. Donald Trump keeps benefiting from people’s willingness to create their own fantasy version of him and his policies rather than looking at the real thing.

Yet some are beginning to notice that one of the prominent characteristics of the Trump administration is central planning. Axios comes right out and says it, in one of their bullet-point-style overviews titled, “Trump the Central Planner.”

Trump’s extraordinary interventions—which dovetail with what some critics have labeled “MAGA Maoism”—are rattling businesses, consumers and investors, and throwing global markets into turmoil….

Trump spooked markets on Friday by threatening Apple with huge financial risk if it doesn’t move iPhone manufacturing to the US—later expanding his threat to Samsung and other phone makers.

He has demanded Walmart absorb the cost of his tariffs to avert price hikes for consumers, warning on Truth Social: “I’ll be watching.”

He’s ignored a law that was supposed to ban TikTok in the US if its Chinese parent company did not divest, embracing the app after it proved useful to his 2024 campaign.

He’s even told parents to buy fewer cheap toys from China amid the threat of supply chain shortages, saying that “maybe the children will have two dolls instead of 30 dolls.”…

In an interview with Time magazine, Trump compared the US market to “the biggest department store in history” and said he would determine the price of entry with tariffs. “[O]n behalf of the American people, I own the store, and I set prices, and I’ll say, if you want to shop here, this is what you have to pay.”

The Washington Post goes with that last quote: “I Own the Store”

President Donald Trump is trying to force down drug prices to specific levels. He has directed tariff rates on virtually every country. He declared that the Federal Reserve “must” lower interest rates. He takes a personal interest in the fate of individual companies like TikTok. He appears frequently with CEOs to tout investment deals, including many that were hatched before his presidency….

“In this administration, policy decisions seem to be made only based on the president’s personal views, not after systemic analysis,” said Douglas Elmendorf, a former director of the Congressional Budget Office and a top economic official under President Bill Clinton.

“The president of our country is not the CEO of our businesses,” Elmendorf said. “I think this president likes the idea of being the CEO of businesses, but that’s not the role of the president. They should be setting broad polices, not intervening for particular companies.”

Most telling is the official White House response to the Post.

The White House said Trump’s personal intervention is preferable to letting lower-level officials run the show.

“After four years of the Joe Biden disaster, over 77 million Americans rejected having anonymous bureaucrats who call themselves ‘the experts’ run our country,” White House spokesman Kush Desai said. “They instead voted for one man with one vision who isn’t beholden to special interests: President Donald J. Trump.”

“One man with one vision”—that’s their plan for the US economy.

One of the bright sides of the past few years is seeing Democrats negatively polarize themselves into adopting key ideas from classical liberalism. So I found this passage amusing:

“No one person, however talented or knowledgeable, can understand everything about the world that a collection of experts working for that person can understand,” Elmendorf said. “Any individual has blind spots and won’t see some indirect consequences of a policy or won’t know enough about how another party will respond.”

Funny, it’s almost as if there are unintended consequences and a knowledge problem. It would be interesting if he took that reasoning just a little bit farther.

As to whether any of this is good for business, by way of Scott Lincicome, I came across an article in a trade magazine on the effect of tariffs on the liquor industry.

“Nobody can work like this. It is impossible to function in this environment,” Alison Leavitt, managing director of the Wine and Spirits Shippers Association, says. “We’ve worked with a level of certainty over the years that has worked for almost all industries. There are certainly adjustments that can be made, but it’s the random nature that causes this fear and disruption. You just do not know what to expect.”

This is even more telling:

“The spirits industry has very strong lobbying efforts…. The problem with this administration is that you have to have a really loud voice in the ear of the White House to get anything done, and right now it seems that the tech industry has that ear. I’m not sure if the spirits industry is quite as close to the top, and it needs to get there.

“So, I think the carve-outs are possible, I just think it’s going to be getting to the right people at the right time and trying to get that message across.”

That’s our economic system right now. You can do business, but only so long as you know the right people and have the ear of the president.

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The Monkey’s Paw

This is not going to work out as well as a lot of Trump’s foolish supporters in the business world thought it would. I know some people who work on energy issues and were very excited that the Trump administration would be a land of opportunity for them to reduce restrictions on fossil fuel production and get the oil wells pumping.

But that monkey’s paw was twitching, and here’s the result.