Political Risk Brief
February 2018

Trump's First Year: Corporate America and the New Nationalism

Introduction

During the first year of his presidency, Donald J. Trump has reordered with uncertain consequences the relationship between government and corporate America.  Applying his experience in the private-sector, President Trump enlists government to support corporate America as a force for social stability and, ultimately, national greatness.  More than simply a reversal of his progressive Democratic predecessor, President Trump’s approach overthrows nearly four decades of emphasis by the Republican Party on the free-market economics of the Chicago school championed by Milton Friedman.

President Trump’s worldview connects the inner strength of the nation with the dignity of steady work made possible by the iconic corporate giants of the post-World War II period.  The President champions reliable employment not only as an economic goal, but also as a solution to the deeper social “carnage” exacerbated by the Great Recession.1  As he emphasized in his 2018 State of the Union address, President Trump’s primary concerns are “America’s struggling workers, and America’s forgotten communities.”2   By emphasizing labor force participation rates and wages as the appropriate measures of national progress, President Trump has radically re-oriented American conservatism away from low prices and toward labor as the principal goal of economic policy.

Whatever the ultimate impact, President Trump’s government interventionism in support of wages reflects a popular discrediting of the elite policy consensus that had prevailed for decades, one that emphasized overall growth in incomes with little attention to its distribution between elites who benefited from globalization and factory workers and other members of the middle class who did not.  If successful, the policy agenda that defines Trumpism – less accommodative trade arrangements, restricted immigration, and a tax code that most rewards major corporations stimulating job creation and wage increases – poses a competitive threat to the Democratic Party’s Electoral College coalition.

The Dignity of Work

Throughout his first year in office, President Trump has emphasized the importance of work, particularly to young people.  “We want every American to know the dignity of a hard day’s work,” President Trump proclaimed in his 2018 State of the Union address.3  This echoes statements the President has made, such as his announcement of an apprenticeship program for student workers: “This is the message I want every young American to hear: there is dignity in every honest job, and there is nobility in every honest worker.”4

The Trump Administration highlights the link between the availability of dignified work and a person’s flourishing: President Trump has stated that “every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families.”5   In a leaked internal White House memo, Peter Navarro, Director of the National Trade Council, detailed the consequences of elites’ longtime focus on prioritizing globalization and low prices of imported goods over dignified work.  Listing the “socioeconomic costs of a weakened manufacturing base,” Navarro connects the loss of manufacturing jobs with a wide range of social impacts – “higher abortion rate,” “lower marriage rate,” “increased drug/opioid use,” “higher incarceration rate,” and “rising mortality rate,” among others.6

Work and Family Life

For President Trump, these social impacts, which challenge the vitality of the American family, result from the loss of work: “We want every American to know the dignity of work, the pride – the pride, the beautiful pride – getting a paycheck, the satisfaction of being told that was a job well done.  We want every parent to be able to care for their children, and we want every child to know a home filled with love, and a community filled with hope.”7

Dignified work, President Trump argues, sustains the flourishing of families.  This perspective resonates with many Americans who lament the decay of other sources of social capital: traditional faith communities, wholesome arts and entertainment, and physical rather than digital social networks.

This focus on the importance of work acknowledges the central role employers have played in family life, both historically and today.  In decades past, manufacturing jobs provided stability for families, and the decline in manufacturing jobs has negatively affected family and personal well-being.8  According to a study published by the National Bureau of Economic Research (NBER), areas experiencing a decline in manufacturing employment due to trade imbalances also see a decreased supply of “marriageable” men, defined as those with steady employment and not drinking or using drugs in excess.9

 Corporations and Community

Trumpism also recognizes the role of corporate organizations in strengthening communities and nurturing patriotism.  In an address to the National Association of Manufacturers (NAM), President Trump remarked, “There is a great patriotism that lives inside the men and women who leave their hearts on the factory floors … When they huddle in the breakroom, at the rest stop, or at the end of a long and very tiring shift, they take pride in knowing that the products they work and the products they make aren’t just building business; they’re building families and communities, and, most of all, they are building this nation that we all love so much.”10

To this end, President Trump himself has encouraged corporations around the country to relocate cash and manufacturing to the United States and pressured industry leaders to invest in domestic production.  The President publicly hailed the relocation of a Dodge Ram facility from Mexico to Michigan as “great news”11 after the president urged the company to invest more than $1 billion dollars in U.S. production plants.12

This connection among work, community, and patriotism informs President Trump’s stance against globalization.  While American workers build the nation, President Trump views with suspicion global corporations who have no responsibilities “other than to make as much money for their stockholders as possible,” as Milton Friedman argued.  In President Trump’s estimation, “Globalization has made the financial elite who donate to politicians very wealthy.  But it has left millions of our workers with nothing but poverty and heartache.”13  Confronted with a choice between more jobs and lower prices for consumers on imported goods, President Trump embraces the former.

Conclusion

During his first year in office, President Trump has offered a vision of major American corporations, both compelled and supported by government, as part of a remedy to the disturbing social trends afflicting the nation.14   For the President, the loyalty of U.S. companies to the American worker should complement the loyalty of American workers to their families, communities, and country.  President Trump has made globalism a serious political liability for U.S.-based multinational corporations.  With the flag of the United Nations flying alongside the Stars and Stripes in front of the Palo Alto city hall, CEOs of technology and other American companies now lead a more complicated life.  Welcome to the New Nationalism.

1  Donald J. Trump, “Remarks of President Donald J. Trump – As Prepared for Delivery,” The White House, January 20, 2017, https://www.whitehouse.gov/briefings-statements/the-inaugural-address.

2  Donald J. Trump, “Remarks of President Donald J. Trump – As Prepared for Delivery,” The White House, January 30, 2018, https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-state-union-address/.

3  Donald J. Trump, “Remarks of President Donald J. Trump – As Prepared for Delivery,” The White House, January 30, 2018, https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-state-union-address/.

4  Donald J. Trump, “President Donald J. Trump’s Weekly Address,” The White House, June 16, 2017, https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-weekly-address-4/.

5  Donald J. Trump, “Remarks of President Donald J. Trump – As Prepared for Delivery,” The White House, January 20, 2017, https://www.whitehouse.gov/briefings-statements/the-inaugural-address.

6  Damian Paletta, “Internal White House documents allege manufacturing decline increases abortions, infertility, and spousal abuse,” The Washington Post, October 17, 2017, https://www.washingtonpost.com/news/business/wp/2017/10/17/internal-white-house-documents-allege-manufacturing-decline-increases-abortions-infertility-and-spousal-abuse/.

7  Donald J. Trump, “Remarks by President Trump to the National Association of Manufacturers,” The White House, September 29, 2017, https://www.whitehouse.gov/the-press-office/2017/09/29/-remarks-president-trump-nam-tax-reform.

8  “Labor Force Statistics from the Current Population Survey,” U.S. Department of Labor, February 27, 2017, https://data.bls.gov/pdq/SurveyOutputServlet.

9  David Autor, David Dorn, and Gordon Hanson, When Work Disappears: Manufacturing Decline and the Falling Marriage-Market Value of Men, Working Paper No. 23173, National Bureau of Economic Research, February 2017, http://www.nber.org/papers/w23173.pdf.

10  Donald J. Trump, “Remarks by President Trump to the National Association of Manufacturers,” The White House, September 29, 2017, https://www.whitehouse.gov/the-press-office/2017/09/29/-remarks-president-trump-nam-tax-reform.

11  Donald J. Trump, Twitter post, January 11, 2018, 6:49 PM, https://twitter.com/realDonaldTrump/status/951647402599026689.

12  Chester Dawson, “Fiat Chrysler to Move Some Truck Production to Michigan From Mexico,” The Wall Street Journal, January 11, 2018. https://www.wsj.com/articles/fiat-chrysler-to-move-some-truck-production-to-michigan-from-mexico-1515713834.

13  Donald J. Trump, “Declaring American Economic Independence,” speech at Alumisource, Monessen, PA, Donald J. Trump for President, Inc., June 28, 2016, https://assets.donaldjtrump.com/DJT_DeclaringAmericanEconomicIndependence.pdf.

14  For further discussion of these trends, please see “The Era of U.S. Political Volatility,” Political Risk Brief, Baron Public Affairs, LLC, November 2016.