On a recent episode of The Ezra Klein show, it was conveyed that “the Democratic brand is toxic” and, according to internal polling, as reported by Politico, many agree. The brand is floundering, and so too is the party’s strategy as pointed out on The Daily Show by Jon Stewart who mocked Democrats by saying “it is Trump's world, and we're just cowering in it.”
Trump’s world, however, is also generating real problems leading to unfavorable ratings and legitimating fears of too much government power. Even the most ardent fans of the MAGA brand are beginning to suffer from cognitive dissonance, and affiliated firms are finding themselves in an unfortunate situation. It is no secret that Tesla sales have been plummeting as bumper stickers with sayings like “I Bought This Before We Knew Elon Was Crazy” and “Vintage Tesla: Pre-madness Edition” are booming.
Those peddling MAGA merchandise are finding themselves with excess in inventory as business and consumer confidence continues to wane. Politico reported that “only about a third of voters said they approve of the GOP’s handling of the economy” and market and economic indicators have been sounding the alarm. Tariff rate fluctuations, mass layoffs of federal employees and disputable deportations continue to create a contentious business environment.
Consumers are holding back any spending on large and discretionary goods, and this is having a ripple effect within the marketplace. The “wait-and-see approach,” as reported by Adweek, is also being employed by firms large firms and this is a truly unfortunate matter. When uncertainty forces businesses to delay their initiatives, it inevitably delays investments, innovation, and experimentation.
Time and time again, history has shown that government interference in trade and business matters distorts market signals for supply and demand, and it alters the price setting capabilities of firms. In fact, Target and Best Buy, in trying to get ahead of any consumer backlash to product pricing, have been communicating that Trump’s trade war is to blame for any price hikes. Last month, the media was quick to quote the president’s acknowledgement of price increases when he asserted that “maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more than they would normally…”
From agriculture to automobiles and clothing to construction, all are bracing for an influx in production costs along with a slump in sales. And it’s not just the US market that is a cause for concern, in the EU there is a growing movement to boycott American brands. As noted above, it is no secret that Tesla’s brand has really been taking the heat as cars are reportedly being burned in Germany, a showroom was scorched in France, and a Tesla dealership was vandalized in Canada. Less flashy products, like grocery store items, however, are also facing consumer scorn. Even the best brands such as Heinz ketchup and Lays chips are losing their international appeal.
If we want America to be great, and if we want US brands to maintain their competitive edge in the global marketplace, the Whitehouse would be wise to remember that top-down planning and government meddling does little to empower markets or strengthen a nation’s economic standing. The actions of the Trump Administration infringe upon the market’s ability to uphold consumer sovereignty and retain business autonomy, and when the autonomy and agency business owners have over operations are removed, so too is the incentive for taking chances and facing challenges.
Calvin Coolidge, America’s 30th president, once proclaimed that “the business of America is business,” and it would be good for America’s 47th president to honor that proclamation. Let’s let Americans do what they do best, business, and political parties should do their best to keep any ramifications of their actions at bay. Thomas Sowell said it best when he asserted that “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” American businesses, and their consumers, bear the costs of bad politics and bad politics tarnish American brands.
