Recently former Colorado Governor John Hickenlooper demurred when asked if he defined himself as a socialist or a capitalist, refusing to buy into what he called “empty labels.” Later, he admitted the term “capitalist” best described his approach to the economy, still qualifying his position with this distinction: “I may be a capitalist, but I’m sure not a Trump capitalist.”
It turns out, whether wittingly or not, Hickenlooper’s identification of this new category of economic thinking, named for our president, has proven quite fitting.
Trump’s recent rants against General Motors and the United Auto Workers for the closing of the Lordstown, Ohio plant where the Chevy Cruze was assembled reveal that Trump indeed has his own version of capitalism, one rooted in an understanding of economics that has little to no resemblance to capitalism.
It is scary to realize, in fact, that Trump, as revealed in both his policies and statements, seems to have no idea what capitalism is, and thus no idea how our economy works.
His recent harassment of GM makes this ignorance clear. Take this tweet: n a tweet, Trump said “Because the economy is so good, General Motors must get their Lordstown, Ohio, plant open, maybe in a different form or with a new owner, FAST!”
And he added “Toyota is investing 13.5 $Billion in U.S., others likewise. G.M. MUST ACT QUICKLY. Time is of the essence!”
Yet GM closed this plant because of a rapid shift in consumer demand from smaller sedans to larger vehicles, such as sport utility vehicles. Sales of the Chevy Cruze made at the plant had plummeted 23 percent in 2018; the plant was operating on one eight-hour shift per day, when typically to be profitable an auto plant must run at least two shifts.
Trump seems not to realize that just because the economy may be performing well, all companies will not necessarily share in that success, depending on how effectively run they are, the quality of and demand for their product, and so forth. A company won’t stay open if it is not profitable.
That is capitalism.
Trump, of course, in concert with his equally foolhardy gang of economic advisors and the GOP-led Congress, passed a massive tax-hike, really a corporate give-away, with the putative rationale that throwing money at corporations, in the blithe and foolhardy spirit of trickle-down economic theory, would defy the dynamics of capitalism.
Reducing the corporate tax rate from 35 to 21 percent and saving corporations some $13 billion in taxes was supposedly to spur economic growth, create more jobs, and induce companies to raise wages. While Treasury Secretary Steve Mnuchin trumpeted that 90 percent of working adults would experience an increase in pay tied directly to the tax cuts, in fact only 4.3 percent of workers in Fortune 500 companies have received either a one-time bonus or an increase in wages. Businesses have reaped nine times more in tax cuts than what they have passed on to workers.
And GM still pushed forward with its announced layoffs. Indeed, shares of GM’s stock surged some 9 percent after the announcement of layoffs last November, underscoring the diametrical disconnect between corporate and shareholder interests and those of the mass of Americans overall.
If anybody thought transferring boatloads of wealth to corporations would encourage hiring and wage increases, well, let’s just say a funny thing happened as that wealth looked for a way to trickle down.
Private companies don’t serve the public good, so throwing excess money at them to feed their top lines won’t encourage them to ignore the laws of capitalism to keep more workers employed than they need to meet lagging demand. Their obligation is to create value for shareholders, not serve the well-being of Americans who have served them and created their wealth. Economists such as Lawrence Summers, entrenched as they are in capitalist mentality, have, in fact, praised GM’s announced layoffs as, in fact, responsible and doing what’s best for the U.S. economy.
Summers, in an interview last November, defended the move as “a response to very substantial excess capacity relative to what the demand for their product was,” asserting that “companies that have more capacity than there’s demand for their product can’t ostrich with respect to that reality.”
Summers made another interesting point, though, that may provide insight into how Trump imagines his role as an authoritarian President/CEO in relation to the economy. He said, “I don’t think that we want to be taking the position as a country that our big companies should be like Chinese state enterprises where they’re kept afloat independent of economic reality.”
Just President Xi Jinping in China and, earlier in history, Josef Stalin in the Soviet Union presided over state capitalist systems, so Trump yearns for this kind of authority to dictate policy and defy the laws and internal dynamics of capitalism when he wishes.
He does not so much care about capitalism or the health of those living within this system, as he does his re-election, which means he must make good on his promises to rust-belt states like Ohio to save manufacturing.
But how can he make smart economic policy if he doesn’t understand how economic systems work? He passed a tax cut that would never trickle down, raise wages, or keep factories open, claiming they would. That money could have been invested more wisely to actually help the American worker.
And if he isn’t so ignorant but is just plain lying, then we know he doesn’t want voters to make smart, informed choices as effective democratic citizens, feeling rather the need to fool us and prevent us as much as possible from comprehending and pursuing our best interests.
Either way, Trump capitalism, like Trump “democracy,” is not serving the people.
Tim Libretti is a professor of U.S. literature and culture at a state university in Chicago. A long-time progressive voice, he has published many academic and journalistic articles on culture, class, race, gender, and politics, for which he has received awards from the Working Class Studies Association, the International Labor Communications Association, the National Federation of Press Women, and the Illinois Woman’s Press Association.