President Trump has proven to be a man of unusually strong, though sometimes paradoxical, influence. Maybe it’s a matter of unintended consequences. He can frown, raise his voice, and accuse the media of lying, hating him and, most recently, of being unworthy of space in the White House press room. But following the frowns and ugly words, viewers and readers flock to the bruised media to observe, read, and listen to the immediate reactions.
Oddly enough, Trump’s rough treatment has turned into a media boon. According to news reports, shares of New York Times stock have risen by 42 percent since November. Yet Trump calls it the “failing New York Times.” Subscriber numbers for the Wall Street Journal climbed by about 250,000 last year. The Washington Post doesn’t report subscription numbers, but indicates that its readership is “growing at a rapid pace.”
Trump now says he will boycott the much-celebrated White House Correspondents Dinner. This could be a good time to buy shares in the media!
More unintended consequences resulted from the Trump war of words involving Nordstrom’s decision to drop daughter Ivanka’s clothing line. Shortly after his Twitter blast, Nordstrom’s shares tumbled downward, but then rose 4 percent for the day.
Or consider Trump on trade and his job-stealing nemesis: Mexico. Almost from day one in his presidential campaign, Mexico was cast as a villain. Whether it was Carrier, Ford, or GM, the story was the same. The firms were expanding operations in Mexico and abandoning U.S. growth opportunities. Trump raised his voice, frowned at his “no-we-won’t-pay-for-the-wall-
Immediately, the peso swooned, and the dollar soared. Mexican goods, land and machinery got cheaper for Americans. Instead of canceling their plans for a Mexican expansion, Ford announced it was still on. According to press reports, “two expanded Mexican plants are still on track to open later this year. … Ford is spending $2.5 billion on constructions, and will hire 3,800 workers once the plants are fully up and running.”
Is this another case of unintended consequences? Whatever the explanation, Trump’s tough talk seems to have made those plants cheaper to buy with U.S. dollars.
Meanwhile, Mexican-produced Chevy, Ford, and GM pickup trucks got cheaper. More of them will be rolling across the border. Trump’s rant may have been great for U.S. consumers, too.
Trump loves to pontificate from his bully pulpit. And sometimes, his enemies may quake in their boots. But other times, his anger has created unexpected opportunities. While these outbursts may help specific companies for a short period of time, it is not the way to build a stable economy. Strong economic growth dislikes political uncertainty.
If Trump wants to fulfill his promises to grow the economy and create jobs, he may need to step back from calling attention to his enemies.
Bruce Yandle is a contributor to the Washington Examiner’s Beltway Confidential blog. He is an adjunct distinguished professor of economics with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business & Behavioral Science. He developed the “Bootleggers and Baptists” political model.
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