The Lesson of Nordstrom:Do Business with the Trumps or else…


A Nordstrom branch in Chicago. President Trump criticized the chain for dropping his daughter’s clothing line. Credit Christopher Dilts/Bloomberg

It is a clear violation of federal ethics rules for White House staff members, or any other federal employees, to use their official positions for private gain. But what President Trump did on Wednesday in his Twitter attack on the Nordstrom department store chain, castigating it for dropping Ms. Trump’s line, was far worse.

In sum, Nordstrom made a business decision not to do business with the president’s daughter because her clothing line was not selling well, and the president used his official position to attack the company for this decision.

The president’s tweet — posted on his personal account and then re-sent from his White House account — is an act of intimidation. Nordstrom interacts with many executive branch agencies: the Department of Labor, the Federal Trade Commission, the Securities and Exchange Commission, the Internal Revenue Service and others. Each one of these agencies will be headed by Trump appointees. Most will be staffed with other political appointees as well. The president is telling all of these people that he is very angry with Nordstrom. The message is clear, and it won’t take much for a political appointee in some agency to conceive of an ingenious way of ingratiating himself with the White House by making life difficult for the store chain.

Most important, regardless of whether such retaliation actually happens, Nordstrom and the handful of other companies that announced they, too, would drop the line have to live in fear of it for the rest of the Trump administration. And now every other department store knows that it had better not make a similar “business decision” that displeases the president. In other words, do business with the Trump family and help the Trump family promote its products, or else.

This is not the way free markets work, particularly in the United States. We fought a revolution in part against the mercantilism that prevailed in Britain, where the king and members of Parliament played favorites and people who wanted to ingratiate themselves with the government did business with companies in which powerful politicians had an interest (the South Sea Company and the East India Company were the two most notorious examples). Edmund Burke and Adam Smith railed against this type of corrupt relationship between business and government in Britain; similarly, the founders of our country did not want that type of abuse of power going on here.

The modern-day Tea Party movement arose in the aftermath of the Great Recession, a reaction to the perception that politicians were playing favorites in bailing out Wall Street banks and auto companies. The Republican Party for years has made a very strong case for an economy in which market actors make their own decisions free of government interference.

And now all of that — and indeed the bedrock principles of limited government power that go back to Thomas Jefferson — lies in shambles as a president seeks not only to use his official position to promote the business of the Trump family but also to retaliate against other businesses for the decisions they make in the marketplace.

Americans have worried about losing freedoms in the Trump administration, including freedom of religion and of the press, as well as the right to be heard by an independent judiciary. We learned this week that free markets are at risk as well.

Advertisements

About Here and Now

I rant about issues concerning foreclosure, real estate law and any topic of interest. Normally my day job is Fashion and Costume Design. I like writing and reading interesting subjects.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s