I wonder what the business leaders who have been waxing enthusiastic about our new pro-business administration are thinking right now.
Confidence and prosperity depend on a perception of government credibility and confidence. Is that present when an administration lies about readily observable facts like crowd sizes and then defends the lie with the Orwellian concept of alternative facts?
Secretary of commerce nominee Wilbur Ross vows to self-initiate dumping cases rather than waiting for industry to file. During the two administrations I served in industry discouraged such efforts because of retaliation fears. Have matters really changed or is the new secretary ahead of his constituency?
Do the financial cheerleaders for a business-leader-dominated administration approve of the emerging combination of weak dollar rhetoric from both the president and Treasury secretary nominee along with strong dollar policy?
If, as secretary nominee Mnuchin has just written to Congress and the president has asserted, the administration believes the dollar is too strong, why are all its policies calculated to raise the dollar: (i) very expansionary fiscal policy (ii) complaints about easy money (iii) measures like the border tax adjustment that discourage imports and encourage exports and (iv) measures to reduce capital outflows as American companies outsource? This is the least coherent dollar policy since the Carter administration.
I guess as someone put it to me in Davos, business people are more comfortable with fellow business people than with policy people. Perhaps in forming views they should get modern and look at data. Almost 30 years ago in 1988, Roger Altman and I had a piece in the Wall Street Journal showing that in the preceding 35 years the economy and corporate profits did much better with Democrats in power. At the time I thought the point was a valid counter to Republican rhetoric but not necessarily a strong regularity. But the best test of any statistical finding is looking at data subsequent to its publication. The recent much more thorough study by Alan Blinder and Mark Watson shows that Democrats are much better for business than Republicans.
Little is going right or giving confidence. Increasingly I think the sugar high may be short lived. For the sake of their shareholders, corporate leaders need to stop cheerleading and start insisting that policy have a modicum of logical coherence and factual support.
The writer is a professor at and past president of Harvard University. He was Treasury secretary from 1999 to 2001 and an economic adviser to President Barack Obama from 2009 through 2010.