Recently, when asked if intervention by the White House into private enterprise was presidential, President-elect Trump responded, “I think it’s very presidential. And if it’s not presidential, that’s okay … because I actually like doing it.”
Writing for the Library of Law and Liberty, Greg Weiner asks, “On what authority is the President of the United States pressuring, which is to say intimidating, the leaders of private enterprise to determine where goods are made and sold? Answer: sheer personal will. ‘I actually like doing it.’” This is a serious threat to the Constitutional rule of law, notes Weiner:
Vice President-elect Pence confirmed this in saying this weekend that the President-elect will decide whether to intervene “on a day by day basis.” But constitutionalism, like capitalism, depends on decentralized decisions. There is all the difference in the world between, on the one hand a macroeconomic policy of protection that makes it more expensive to move jobs offshore—a policy decided upon through the mechanism of separation of powers—and, on the other hand, a President of the United States personally stepping in to impede the rational decisions of individual economic actors.
The former may be unwise, but it is still constitutionally sound. F.A. Hayek would recognize the latter as a threat to the rule of law itself. The rule of law, Hayek notes, requires “that government must never coerce an individual except in the enforcement of a known rule.” Carrier’s decision to move jobs offshore was entirely compatible with known rules.
Presidential intimidation (threats of “consequences”) of individual companies is the very definition of coercion applied to an individual. Section 301 of the Trade Act of 1974 appears to authorize the President to take measures against countries that inhibit American commerce. Trump is threatening, here, to slap self-destructive 35 percent tariffs on individual companies that facilitate commerce.
The only apparent way the President could target individual companies would be by rewriting the 1974 statute by way of deliberate misinterpretation: in other words, presidential unilateralism. Consequently, this may well be the first test of Congress’ capacity to stand up for its own statutes against the other political branch. But even if these tariffs are legal, Hayek also warns that “the requirement of mere legality in all government action” is not the same as the actuality of the rule of law.
In Becoming Europe, Samuel Gregg examines economic culture - the values and institutions that inform our economic priorities - to explain how European economic life has drifted in the direction of what Alexis de Tocqueville called "soft despotism", and the ways in which similar trends are manifesting themselves in the United States.