President Trump has escalated his attack against Internet giant Amazon.com and CEO Jeffrey P. Bezos, who owns The Washington Post. The president has accused Amazon of manipulating the nation’s tax laws, while claiming it would regularly “use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.).”
While these comments are false, they are not new. Trump has been targeting the Internet company for “getting away with murder tax-wise” since his 2016 campaign. More ominously, Trump has recently threatened to use government power to restrain the company’s ongoing expansion. He ordered a review of the Postal Service’s finances, an indication he might be following up his threats with action.
Observers have attributed Trump’s adversarial relationship with Bezos partly to his fury over the criticism he and his administration have received from The Post. However, the president’s continued excoriation of Amazon also fits into his political narrative, in which he is the unlikely populist who will save the country’s small-business community from elitist corruption on Wall Street and in Washington.
In describing himself this way, Trump is aligning himself with another wealthy, hyperactive New Yorker who ascended to the nation’s highest office using a populist message to attack the power of corporations. Over a century ago, it was Theodore Roosevelt who was unapologetic about his own wealth, distrustful of unions and unabashed when it came to using the power of his personality to bend individuals and industries to his will. By pitting his administration against big corporations, Roosevelt created the populist tradition upon which Trump has built his presidency.
Yet while Roosevelt and Trump talked similar games, when it comes to corporate America, they have acted quite differently. And their targets are quite different as well.
In the winter of 1902, Roosevelt launched a campaign against J.P. Morgan and John D. Rockefeller’s corporate “trust” designed to gain a monopoly over the nation’s railroad industry. In so doing, he launched a new presidential role: that of reformer. By expanding the power of the federal government, Roosevelt worked to protect the public from unfair corporate practices in an effort to expand economic participation to all Americans in a changing economy.
The crusade transformed Roosevelt into a hero in the public’s eyes. His activism led to new laws that regulated railroad ticket prices and forced the companies that controlled the railway system to create a standard accounting practice so that irregularities could be noticed almost immediately. He backed up tough, populist rhetoric with hard-hitting action, taking advantage of the power of government to regulate corporate power. This stands in stark contrast to Trump, who continues to belittle Amazon and Bezos but has actually governed as a friend of corporate power, not a champion of the little guy.
When Roosevelt took office in the fall of 1901 after the assassination of President William McKinley, one of the first items on his agenda was to respond to the emergence of the Northern Securities Co., a large holding organization that was designed to legally allow Morgan, Rockefeller and their colleagues E.H. Harriman and James J. Hill to hold a monopoly over the nation’s railways. As with Bezos today, the industrialists, were household names who garnered frequent news coverage. And like the Internet today, people depended on the railroad for transportation and commerce. Unlike Bezos, these robber barons openly chased monopolies; though some accuse Amazon of being a monopoly, others disagree and many Americans are unabashed fans.
Given the popularity of train travel, Harriman, Morgan and their colleagues frequently aroused the ire of the public, which grew increasingly concerned about the limiting of competition as well as the centralization of economic power in the hands of a select few. The Sherman Antitrust Act, created in 1890, had been designed to prevent issues like the railroad monopoly from occurring. However, enforcement had been lackluster.
But Theodore Roosevelt changed this. The issue of the railroad trust drew the new president’s attention because he had spoken of the desire to fix a financial and political system that many had come to believe was controlled by the wealthy and well-connected. The system demanded presidential action to fix it.
“More and more it is evident that the state and if necessary the nation has got to possess the right of supervision and control as regards to great corporations which are its creatures,” Roosevelt said at the Minnesota State Fair in 1902. Roosevelt believed Morgan and Rockefeller’s “trust” system was counter to that idea. Without competition, the robber barons could raise prices as high as they liked on passengers’ tickets while charging farmers excessive amounts for carrying freight. While the president certainly supported the philosophy of creating a positive business environment, Roosevelt also believed everyone should have the opportunity to prosper from free enterprise, entrepreneurship and individual freedom.
Two months later in February 1902, without even consulting the Cabinet, Roosevelt instructed Attorney General Philander Knox to bring suit against the Northern Securities Co. and its board of directors, which included Morgan. The financier, who had proudly proclaimed a year earlier that he “owe[d] the public nothing,” was livid when he heard the president’s decision. As Roosevelt recalled years later, when the banker visited the White House he asked the president if he could simply “send your man to my man and they can fix it up.”
The president liked Morgan. The financier had been a friend of Roosevelt’s father’s. But the president had made his decision, a point emphasized by Knox when the attorney general curtly stated: “We don’t want to fix it up; we want to stop it.” To Roosevelt, striking a deal with Morgan would simply have perpetuated corporate power; in the president’s words, the offer was “an illuminating illustration of the Wall Street point of view.”
Roosevelt’s decision was indicative of his desire to serve the public interest through government intervention. Ironically, however, it is Morgan, not Roosevelt, who captures Trump’s attitude toward corporate power and governance. Trump views himself as a preeminent dealmaker, believing he needs nothing more than his superior negotiating skills to solve the nation’s problems. Yet as Roosevelt demonstrated, the kind of actions Trump has discussed enacting against Amazon would not only be highly difficult to achieve but also would require the use of government regulation, something that Trump has consistently disparaged since he became president.
Roosevelt’s actions caused a long legal battle that culminated with the Supreme Court issuing a 5-4 ruling in 1904 finding that Morgan and his colleagues had violated the Sherman Antitrust Act and ordering the dissolution of the Northern Securities Co. The decision, which strengthened the country’s antitrust legislation, allowed Roosevelt’s administration to continue to pursue those trusts he believed restricted traditional market forces and harmed the American consumer. These are the legal and political precedents on which Trump will depend if he continues his pursuit against Amazon.
However, he has shown no inclination to actually take the sort of action against corporations that Roosevelt embraced in his battle with the robber barons. Roosevelt’s successful battle against the “Trusts,” revealed that when the New York patrician proclaimed himself to be “president of all the people,” Roosevelt wasn’t simply blowing smoke. He was willing to promote activist policies designed to scrutinize the corporate class while balancing the economic playing field for all those who hoped to take advantage of the American Dream. Even if ordering a review of the post office is an opening salvo against Amazon, Trump seems unlikely to fully unleash the power of government against the titans of corporate America.
Trump, by contrast, while routinely sounding similar populist notes, has governed in a way that would have made J.P. Morgan smile. Instead of enacting new regulations, he has moved to slash it. To truly take after Roosevelt, Trump will need to embrace policies that will alienate the very business community that helped him become president. In Amazon, he has also chosen a target whose record is far more ambiguous in terms of the public good. When it comes to battling corporate giants, Trump will have to choose: Is he the deregulator in chief or the populist in chief?