How companies should respond to Trump’s attacks – and praises

Singling out individual companies for praise or pressure is not such a good thing for a president to do. However, singling them out for individual favors or penalties is absolutely terrible policy – generally. I suppose there are situations where a company could be called out for bad behavior, particularly if that company engaged in fraud or some other violation of the law. But as a rule, we do not want the President blessing or cursing companies. That does not in the end create a good business environment.

(From Reuters)

Whether Trump has been testing messages to use as president or launching a regular practice, he has used his own “bully pulpit” to put some businesses on notice and to commend others. This approach is raising questions about what some economists call “crony capitalism” and also about quid-pro-quo politics, and it’s shaking up company executives who might otherwise be optimistic about pledges of economic growth…

…A dynamic, growth-oriented capitalist system requires a level playing field in which companies focus on how best to compete in the marketplace, not in the political arena or with political money. A number of economists believe crony capitalism brings harmful uncertainty to U.S. companies. And there is academic research suggesting an association between government-induced risk and companies’ increased political donations.

How, then, would U.S. companies respond to a new president’s bully pulpit?

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