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When I attended The Catholic University of America in Washington, D.C., we had tons of future politicians on campus. Mitch Landrieu, now mayor of New Orleans, took a carload of us out for steak our first day: My first view of the Capitol at night came from the back of his Oldsmobile. I bonded with Ed Gillespie, a New Jersey kid now running for governor of Virginia, because I was the first person he met who knew where his hometown was.
Years later, the two of them are near the forefront of how we’re confronting extremism, after Charlottesville riots sparked by rifle-toting neo-Nazis. In the age of Donald Trump, they show a path forward.
Two college friends of mine, both good people. One’s the Democratic son of a former Carter administration cabinet member, the other a former chair of the Republican National Committee. One forthrightly demanded that, finally, America move on from the Civil War — and, by extension, the alt-nonsense that elected Trump. The other faltered, but has regained his moral bearings as Trump careens into irrelevance.
This is the lesson that the stock market and a raft of CEOs have learned this week: There’s no net price to pay for defying President Trump anymore, and no reason to bet on his success. Mitch and Ed’s journey to courage is a miniature of the one a raft of CEOs blazed this week as they quit Trump’s advisory councils.
The speed of Trump’s seven-month disintegration into laughingstockdom may shock, but the market being wise to him isn’t totally new. Back in January, I documented how Trump tweeting about a company is basically an 80% guarantee the stock will move in the opposite direction of what he predicts. He shoots blanks.
Resignations of CEOs from Merck MRK, +0.32% Intel INTC, -0.53% UnderArmour UA, +0.12% and others from Trump’s advisory council on manufacturing illustrate a belated appreciation of that. As powerful as a president theoretically is, this one is weak because he’s lost respect of nearly everyone of any modern accomplishment.
Watch the president use Twitter to attack the first CEO to step down (Merck’s Ken Frazier) and then blast those who followed as “grandstanders.” Watch as on Wednesday he disbands the group “rather than putting pressure on the businesspeople”.
And watch Merck’s stock price rise along with the Dow Jones Industrial Average. DJIA, +0.12%
The reason is pathetically obvious: Trump’s disapproval doesn’t exert pressure any more.
No one thinks they have more to lose from defying him than the sensibilities of their clients, business partners, employees (a Merck scientist I know posted “#proudemployee” on Facebook), colleagues — and now, even voters in a purple state like Virginia, whose disgust stiffened the spine of even a reliable partisan like Ed.
Even politicians get it now. That means Trump’s influence on tax reform, infrastructure and more is over.
Not long ago, pols had to wonder if being a decent human being was survivable in the age of Trump. Mitch’s sister lost her Senate seat from Louisiana in 2014, not least because open and closet David Duke admirers loathe Democrats. Ed nearly lost the GOP primary this year to a Trump cheerleader.
But In May, Mitch gave an acclaimed speech explaining why New Orleans was taking down four Confederate memorials, including a statue of Robert E. Lee, the West Point graduate and general who chose to command the Confederate Army over Union troops.
“These men did not fight for the United States of America, they fought against it,” Mitch said. “After the Civil War, these statues were a part of that terrorism as much as a burning cross on someone’s lawn; they were erected purposefully to send a strong message to all who walked in their shadows about who was still in charge in this city.”
Ed wasn’t initially so forthright after neo-Nazis swaggered into the home of his adopted state’s flagship university, their torches and semi-automatic weapons a latter-day way to “send a strong message.”
“It is painful to see these ugly events in Charlottesville last night and today,” Ed’s campaign said in a statement. “I know we all appreciate the law enforcement officials maintaining order and protecting public safety there.”
It’s no secret Ed’s incentives were different than Mitch’s. Mitch runs a black city in a state where he has no path to higher office as a Democrat. Ed has a tight race this fall.
But Ed’s position shifted anyway, and he spoke of “evil in the torches of the KKK and white supremacist torches and the howling rhetoric of neo-Nazism.”
Whether he has an updated view of his incentives or couldn’t stand straddling on Nazism, he spent this week getting it right.
Just as CEOs have. As we all have.
It will be entertaining to see what happens next month, when politicians return to Washington. Until it’s not.
Remember, the press conference where Trump humiliated himself was meant to revive his infrastructure push, which Wall Street banks thought would anchor a Trump stock rally. Trump’s equating neo-Confederates with George Washington won’t build any roads. It just burned political capital.
Next month Congress and Trump will try to raise the federal debt ceiling before the government defaults. Maybe the government will default, maybe it won’t.
But a Congress that ignored Trump on health care will hardly heed him now. He can’t mediate the conflict between right-wingers who want to leverage the debt ceiling into a border wall and adults who understand governments unconditionally pay their bills. Let alone restructure the tax code or write a $1 trillion infrastructure plan.
Unless someone takes charge of this government as Trump can’t, the market will discover a level of pain no Tweet could ever cause.