Thursday, January 12, 2017

The Character of the Trump Government

By Rick Miller

The recent interview you posted with Kellyanne Conway had some interesting exchanges toward the later part of the interview (starting at 9:30) in which Conway brags about what she calls the "Trump Effect":

Kellyanne Conway:  “Think about the ‘Trump effect’, as I call it, already.  He has major employers deciding to move their factories out of Mexico and back to the United States and keep those jobs here.  That’s what leaders do-they do that even before they are sworn in.”

Seth Meyers (half-heartedly objecting):  “And so, you’re ok with the President sort of picking winners and losers in the free market via Twitter-because that seems like what he’s doing sometimes?”

Conway:  “Not at all.  What he’s doing is he’s laying down incentives.”

Aside from the obvious effects such threats Conway calls "incentives" can have that are related to comparative advantage, like rising prices of consumer goods and misallocation of labor and other resources, Conway is lauding the power Trump has via Twitter to affect the decision making process of companies, misnaming it "leadership".  To cut through the political garble, she is telling us that this administration is not going to allow many individuals to employ their capital as they would like.  This means we can look forward to an economy stigmatized by “regime uncertainty”, a phenomenon discussed by Robert Higgs:

“…businesspeople may be more or less “uncertain about the regime,” by which I mean, distressed that investors’ private property rights in their capital and the income it yields will be attenuated further by government action. Such attenuations can arise from many sources, ranging from simple tax-rate increases to the imposition of new kinds of taxes to outright confiscation of private property. Many intermediate threats can arise from various sorts of regulation, for instance, of securities markets, labor markets, and product markets. In any event, the security of private property rights rests not so much on the letter of the law as on the character of the government that enforces, or threatens, presumptive rights.

The character of the Trump government could be described as proudly interventionist without any identifiable limiting principle.  Property rights be damned, Trump in his omniscience knows and has always known how to better things for others; he is the personification of Hayek’s “fatal conceit".

The highlight of the interview, in my view, was later when Conway met resistance from the audience as she tries to talk up Trump’s “brilliance”- eventually attempting to shame those who do not bow down in great humility and admiration at the office of the el presidente.

Conway:  “…he’s an unconventional guy.  We’ve never had such a successful, brilliant businessman take office before.  (audience starts laughing) It’s usually a politician who is moving from place while he’s employed tens of thousands of people…”

“We have such disrespect…I am almost 50 years old; I am so astonished to hear people outwardly ridicule the office of the president and its current occupant.  I was raised differently- no matter who it is.”

The open ridicule of the president-elect is refreshing- he is, in fact, not God.  But, those who hate Trump are not ridiculing the office, but are consumed by vitriol toward him as a person.  In addition, they (like Trump supporters) possess no economic sense.  They do not identify as a source of injustice the existence of the office and resulting economic interventions, but are simply sore that the power will not be used to pursue their particular agenda.


  1. To the point about regime uncertainty, I saw an article on Reuters yesterday titled "U.S. companies have new business risk - being labeled 'anti-American' by Trump." The most interesting line in that piece was "corporate leaders, say the advisers, can no longer focus only on maximizing shareholder value; they must now also weigh national interest."

    To the point about the disrespect of the person who is president, as long as I can remember, those in opposition to the sitting president have been unabashedly disrespectful of the person. Some people, particularly those with a military background, do have a sort of mystical reverence for the "office" of the president even while virulently ranting against the current occupant. Take Obama for instance. People with this type of extreme statist indoctrination salute, and in the case of active military, kill for persons they disagree with and disrespect in every way possible just out of respect for the "office." This type of cognitively dissonant behavior shows that, to some, statism is truly a religion. An extremely dangerous one at that.

  2. Despite Donald Trump's idiotic moves, I am surprised that the mainstream media suddenly care about the free market. I have never heard so much talk about the free market in a positive way from the media in my 28 years on this planet.

  3. The last point is chilling. The right has rolled over for a fascist dictator and the left is too ignorant on economics to be a dependable opposition. It's libertarians against 90% of the population.

    This could turn out very badly.