The GOP has, for decades, portrayed itself as a champion of “free markets.” The party’s definition of free markets turns out to be pretty confusing, though.
It apparently includes allowing the president to personally dictate what companies must buy, from whom, and at what price; what products they should sell; which employees they should hire and fire; where they should locate; and perhaps even who should get secret, market-moving information early.
The Trump administration has taken action or raised questions in all these areas — some in just the past week. And President Trump’s supposedly laissez-faire co-partisans in Congress have barely said boo.
On Friday, for instance, Trump ordered the Energy Department to keep afloat ailing coal-fired and nuclear plants. Based on a leaked draft memo, the mechanism for doing this would likely require forcing regional electricity grids to purchase power from a list of plants curated by the government.
If that doesn’t count as “picking winners and losers,” it’s hard to say what would.
Efforts to prop up inefficient coal-fired plants are not only harmful to the environment and public health. They’re also a terrible idea from an economic perspective. The reason these plants are struggling, after all, is that they can’t compete with cheaper natural gas and renewables. Trump is wielding the power of the state to keep uncompetitive companies in business, and costing taxpayers and consumers lots of money in the process.
This is not the administration’s first attempt to subsidize failing coal and nuclear plants, by the way. The Federal Energy Regulatory Commission — four of whose five members were appointed by Trump — nixed an earlier effort in January.
Undeterred, Trump is now defiantly claiming that “national security” requires bailing out his political allies in the coal industry. It’s the same absurd rationale he has lately invoked for other un-free-market interventions — including, ironically, our military-alliance-straining steel and aluminum tariffs and, perhaps soon, automobile tariffs.
Not that Republican congressional leadership seems particularly interested in stopping him.
Also this past Friday, Trump found another creative way to mess with markets. He did this by taking the unprecedented (and possibly illegal) step of tipping off his Twitter followers to the contents of the all-important jobs report.
The jobs report publishes at precisely 8:30 a.m. on the first Friday of each month. Until that time, its contents are a closely guarded secret, with only a select few career staffers able to access the numbers as they’re tabulated. Even the maintenance crew doesn’t collect trash from their offices in the days leading up to the official release.
There’s a good reason for such extreme safeguards: If someone got unauthorized access to the data early, he could use that inside information to make a lot of money.
The White House typically gets the numbers the day before, but a federal regulation forbids any executive branch officials — including the president — from publicly commenting about them until at least an hour after they’re released. This rule was adopted to preserve the credibility of official government statistics, so that markets (correctly) perceive them as free from spin or political influence.
On Friday, Trump not only disregarded this hourlong waiting period; an hour before the numbers came out, he hinted on Twitter that they’d be great. Bond yields and dollar values spiked immediately. But more concerning than this particular tweet, and the market reaction, are the questions the episode raises about what Trump may be doing behind the scenes.
A president who breaches a sacred data embargo to brag publicly invites suspicion that he may do the same thing privately, perhaps to buddies and business associates who could profit off the information. Steel-related trades his friend and adviser Carl Icahn made days before Trump’s steel tariff announcement raised similar concerns. (Icahn subsequently denied receiving any prior knowledge of the tariffs.)
These are hardly the only ways that Trump has eroded confidence in the integrity of government data and fairness of financial markets, or otherwise used his bully pulpit to pressure firms to make choices they wouldn’t otherwise consider profit-maximizing.
He urged National Football League teams to “fire or suspend” players who kneel during the national anthem, comments that at least one team owner admitted in a deposition affected his personnel policy.
He attacked Nordstrom for dropping his daughter’s clothing line.
He publicly berates Amazon — whose chief executive, Jeffrey P. Bezos, independently owns The Washington Post — and has reportedly demanded that the Postal Service double prices on Amazon packages.
He has browbeaten manufacturers such as Carrier for decisions about where they locate jobs, factories and other operations.
And so on. Leave it to Trump to try to strong-arm the invisible hand.
Catherine Rampell
Catherine Rampell’s email address is crampell@washpost.com. Follow her on Twitter, @crampell.