Trumponomics: Shame is the game
Economy and Markets
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ECONOMY & MARKETS | January 05, 2017
Trumponomics: Shame is the Game
By Ben Benoy, Editor, MarketVOX Trader
The mainstream media has branded our President-Elect’s economic policies as “Trumponomics.” They have focused on trying to understand who the winners and losers are going to be under this new administration.
I’m not a world-renowned economist like Harry Dent. (He’s emphatic that Trump won’t grow the economy at 3% to 4% like Trump says he will, because it’s actually demographically impossible.) So, I can’t tell you the true impact Trumponomics is going to have.
But what I can tell you, as a Marine Corps-trained Command and Control Systems Officer, is that Trump has rewritten the playbook for sending policy messages. And they will affect big companies directly.
He’s already warning the ones that stand in the way. And flipping them on their head.
We’ve seen it plenty of times during the presidential campaign and now in his transition to the office. Trump uses social media, mainly Twitter, to send messages straight to the world.
There’s no media filter. These are his raw, uncut thoughts.
What’s the impact?
His presidential opponent showed a small bit of the potential last year.
Back in September 2015, Hillary Clinton sent a 21-word tweet that cost the biotech sector $40 billion in market in just one day. She said price gouging in the specialty drug market was outrageous, and she planned to take it on. By the end of the day, the Nasdaq Biotech ETF, which tracks the sector, lost 4.5% as a whole.
Trump one-upped Hillary this week when he set a precedent for directly praising or shaming companies that follow, or more importantly, don’t follow, his Trumponomic initiatives.
On January 3, Trump sent out the below tweets to General Motors and Ford.
The first, talking about his policies and GM, came at 7:30 a.m.
In the second, just four hours later, he shared news about Ford ending plans for a plant in Mexico, seemingly in response to Trump’s recently tweeted public position.
That’s right, Ford is ending plans for a $1.6-billion plant in Mexico and instead investing $700 in a Michigan plant.
You could call this “reading the tea leaves” of the next administration and making a strategic business move for taxes.
In reality, what Ford really saw was a public relations nightmare. One that was about to be broadcasted to 18 million of Trump’s followers (and more), and they took the high road.
General Motors, though, didn’t get the message. The company got blasted and is about to pay the price, via taxes and poor public relations.
Good or bad, Trump’s setting a new precedent in public shaming that has been unseen from any other president.
The Master of the Deal is breaking new ground rewriting the playbook for negotiations and using every tool at his disposal.
Time will only tell how this tactic will play out, but if it’s anything like the election, it’s going to continue to catch people off guard and turn out to be highly effective.
Tweets might be mightier than the sword.
If you can heed one final piece of advice for the new year, let it be this: Never get into a public argument with someone who has 18 million Twitter followers.
Shaming could follow.
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