“It is a leader's role, in business or government, to bring people together, not tear them apart,” JPMorgan Chase CEO Jamie Dimon said Wednesday. It was one of many strongly worded statements condemning the president's failure to lead. Merck CEO Kenneth Frazier, who started the mass exodus by resigning from the manufacturing council Monday, said he felt “a responsibility to take a stand against intolerance and racism” because Trump did not.
There are three key questions now: How many others will abandon Trump? Is his agenda dead? And does this drive Trump further toward Steve Bannon and the nationalist members of his administration?
“This is a tipping point for Trump,” says Larry Sabato, head of the University of Virginia's Center of Politics, who witnessed the horrific and tragic events in Charlottesville over the weekend. If even CEOs won't stand by Trump, Sabato predicts that more Republicans and White House staff may jump ship too. “What about all the Jewish members of his administration? How can they serve a man who has essentially winked and nodded at neo-Nazis?”
Two of Trump's top economic policy advisers are Jewish: Treasury Secretary Steven Mnuchin and National Economic Council adviser Gary Cohn. They have been silent so far, at least publicly. Mnuchin stood stoically behind Trump during a heated news conference Tuesday in which the president repeatedly insisted that “both sides” were to blame for the violence in Charlottesville that killed a young woman who was trying to stand up to white nationalists. Mnuchin and Cohn have been dubbed Trump's “Wall Street team." They are often at odds with Bannon and the nationalist members of Trump's team.
CEOs usually pride themselves on being able to work with anyone. They want to make money. That's supposed to be the overriding concern. But American business leaders made it clear to Trump this week that they care about more than taxes, regulations and dollar signs. They did it at a time when so much is potentially at stake for the business community on tax reform, NAFTA, possible trade tariffs and more.
“Intolerance, racism and violence have absolutely no place in this country and are an affront to core American values,” the Strategy and Policy Forum said in a statement after the group broke up. Numerous CEOs stressed how important diversity is. In this age of talent wars, they want — and need — the best people from around the world. Trump has made that harder with his Muslim ban, his anti-immigrant rhetoric and now his comments that do not fully condemn neo-Nazis.
“Clearly the CEOs are making an important statement placing values ahead of policy,” says Kristina Hooper, global market strategist at Invesco.
The question now is whether Republicans still want to work with Trump. On the very day the councils disbanded, some Republicans in Congress gathered at former president Ronald Reagan's ranch to try to talk about how important tax reform is. Cutting taxes was supposed to be the signature part of Trump's economic agenda to bump up growth and create more jobs. Now Democrats have one more reason not to work with the president, and even some Republicans will probably reevaluate whether it is worth staying tied to the White House. GOP Senator Jeff Flake (R-Ariz.) has already come out with an entire book rebuking Trump as a “crony capitalist” who isn't a true conservative.
“I don't know how the White House will repair relations” with businesses or Congress, said one lobbyist familiar with the CEO council deliberations Wednesday who spoke on the condition of anonymity.
It will be telling who has Trump's ear in the coming days: Cohn or Bannon? The business community and many world leaders have said they can work with people like Cohn and Mnuchin. Both are former Goldman Sachs executives and political moderates. Cohn is known to walk into meetings and say, “I'm not a Democrat, and I'm not a Republican. I just want to get things done.” But it's possible that Trump will be so angry with the rebuke from the CEOs that he will turn more toward his nationalist advisers. It already seemed to be going that way, even before Charlottesville.
After Congress gave Trump a major loss by failing to repeal the Affordable Care Act (also known as Obamacare) this summer, Trump was supposed to pivot to tax reform and infrastructure. Instead, he shocked many with his announcements that transgender individuals should be banned from military service and legal immigration should be cut by 50 percent. These policies came from the far right, not the Wall Street advisers. Both moves were overwhelmingly denounced by moderate Republicans, business leaders and economists. In an era when CEOs complain that they can't find enough qualified workers, the last thing they want to do is cut off immigration or prevent talented military personnel from serving the country because of their gender identity.
President Obama was often criticized for being anti-business. He wasn't popular in business circles for clamping down on Wall Street after the financial crisis, increasing environmental regulations and causing U.S. businesses to move overseas to reduce their tax bill. George Buckley, the CEO of 3M in 2011, said this of Obama: “We know what his instincts are ... he is anti-business.”
But Trump just got an even bigger rebuke. The current CEO of 3M, Inge Thulin, resigned from the president's manufacturing council Wednesday over Trump's Charlottesville remarks. He was the last one to go before the council imploded. In a statement, Thulin said he felt that the White House no longer reflected the values of “sustainability, diversity and inclusion.”
The president who claimed to be uniquely able to pull together business and government leaders is proving to be uniquely able to drive them apart.