The business of America is ...?

The President's comments on the Federal Reserve in a CNBC interview this week have come under the typical scrutiny from those looking for authoritarian tendencies in Donald Trump. For instance, a New York Times reporter wrote that Trump "seemed to lament that the Fed, which is independent of the White House, did not operate like China's central bank, which is largely subservient to the government." The reporter correctly quotes the President saying, however facetiously, that Xi Jinping was "head of the Fed in China," adding Trump's explanation that on questions of interest rates and related matters Xi "can do whatever he wants." He described what he perceives as a competitive advantage enjoyed by China, where financial policy can be manipulated, as Trump claims, to soften the impact of the tariffs his administration has imposed on the People's Republic. If the Fed has a problem from Trump's perspective, however, it's not that its board of governors retains a degree of independence from politics -- their 14-year terms outlast the presidents who appoint them -- but that the board doesn't necessarily share Trump's view of economic policy in general as an extension of national-security policy.

The President opened the interview with a chiding of the U.S. Chamber of Commerce, normally loyal to a fault to Republican presidents, over its opposition to his tariff policies. There was no simpler way for Trump to differentiate himself from conventional Republicanism than by differentiating American interests from those of the Chamber of Commerce. Before, the typical (or perhaps the stereotypical) Republican might not have recognized any difference of interests. By opposing tariffs, however, the Chamber, in Trump's view, puts the interests of its constituent corporations, many of whom manufacture products abroad, against the American interest as the President understands it. For nearly a century, Calvin Coolidge's observation that "the chief business of America is business" has been Republican orthodoxy. It has been interpreted to render protectionist trade policy, once the defining Republican platform plank, a heresy against free enterprise. By no means, of course, is Donald Trump against free enterprise, but he clearly has, to say the least, a heterodox vision of America's "business" that transcends the momentary bottom-line interests of American businesses. For him, trade is inescapably a matter, at least in part, of national security. The American economy, for him, is a weapon. His complaint against the Fed is basically that they fail to see this. He sees their job as manipulating interest rates and other powers within their purview to maximize the nation's advantages in trade negotiations or, if necessary, trade wars. So long as he assumes that other countries use their "Feds" that way, he will expect the American Fed to respond accordingly. In his interview, he's wishing not so much that he had more control over the Fed, but that the Fed saw things more as he does. His complaint extends to the Chamber and to an extent to the Republican party itself, which has long contemptuously equated a nationalist trade policy with the anti-market and purportedly anti-competitive practice of "picking winners." The current GOP orthodoxy sees businesses seeking protection from allegedly unfair foreign competition as "special interests" who'd benefit more from protectionism than the price paid by consumers can justify. Trump's heresy, interpreted generously for argument's sake, sees no employer as a special interest -- unless, to be less generous, that employer speaks ill of him -- and is interested only in picking the nation to win. Whether Trump deserves this generosity for long remains to be determined, but he's doing more to challenge Republican orthodoxy on some fronts than Democrats have in some time, and at the least that's not a bad thing.