Mark Penn: Trump should push China but drop Twitter
Hey, President Trump. You gotta lay off Twitter.
Maybe social media works well for rough-and-tumble election campaigns because it’s a great way to confront your opponents. But government by Twitter is another thing altogether.
Sure, the briefing room and official statements are boring. Governing should be boring. It should be quietly improving the lives of our citizens, working to get ready for the day of reckoning that comes every four years.
If you are the president and want to talk to the Chinese government, pick up the phone or call the State Department. By using Twitter, all you do is get everyone but the Chinese nervous and make it more difficult to implement your policy. If former President Kennedy had used Twitter during the Cuban missile crisis, there might be no Miami today.
The goal of the United States is to make the Chinese government look weak, unstable and filled with protests while we are strong, unaffected by their actions and even sprinting ahead, given our robust consumer-based economy. Using social media to fire off emotional blasts completely undermines that approach.
China has been ripping us off. It has been supporting its companies to steal our jobs and build its own consumer economy. It has been stealing our technology wholesale and using it to build its own technology industry. It also is the largest source of economic growth in the world and new consumer spending — its markets do matter for us, today and tomorrow. We need to correct the relationship, not blow it up.
Under the surface, however, China has growing problems. The country has had to absorb all of the cost of the last round of tariffs to avoid mass layoffs, and its stock market has been sinking. President Xi Jinping made a fundamental mistake in having himself named China’s “president for life.” He thought it would give him and China greater stability. But it’s nonviolent transfers of power that allow peaceful change without violent overthrow. Telling 1.4 billion people — 20 percent of the planet — in the modern era that they will have no say in and will not be able to change their leader for perhaps the next 25 years is the actual creation of an all-powerful autocracy, a throwback to kings who ruled for life (but often lost their heads).
In contrast, the U.S. is stronger than perceptions. Earnings from retailers such as Target, Walmart and others show that consumers have money and are spending it. Target’s same-store growth rate was its best since 2005. Doomsaying and perhaps some politics seem to be behind the endless chorus of a recession being around the corner. There is definitely a slowdown of the manufacturing sector, but corporate profits were not gloom-and-doom. And we’re talking about perhaps $75 billion of China tariffs in a $19 trillion economy. Last year, by comparison, the states collected nearly $400 billion in sales tax revenue, a far greater drain on the economy.
No one can control or predict the markets accurately, but those who invest in markets are treating the world of social media like it’s the real world. Up 600, then down 600, then down again, all on the basis of nothing but hyperbolic tweets. No earnings report or jobs report seems to have the power of a single sentence on social media.
And the Federal Reserve did make a mistake — it overcorrected on interest rates because it was afraid of a runaway economy. Short-term rates are not set by the market but by the Fed. An inverted yield does not today, in my view, necessarily mean a recession is coming. It means the Fed set short-term rates too high relative to the long-term demand for capital. The Fed needs to correct its mistake.
It’s also important to understand the ways of negotiating with adversaries who do not want to do anything. I often say that the art of diplomacy is getting another country to do something it doesn’t want to do without resorting to violence. The Chinese don’t want to do anything — they have devised an economic system that is to their extreme benefit while having great costs to the U.S. The Chinese get jobs, money and technology; we get some cheaper goods. They are not going to agree to any changes without facing economic and political pressure.
Trump is right to take on the Chinese. He is wrong to allow it to become a reality show on Twitter. That’s the art of being a president and not a verbal bomb-throwing candidate. We are all wrong in taking Twitter as seriously as we do, but that has been fueled by a president and members of the media who react to every tweet as though it is actual policy in the absence of a clear definition of policy and a full explanation of that policy.
As the Taylor Swift song says, we all have to “calm down.”
Trump has to learn that governing by Twitter is self-defeating. Xi has to learn that the free ride is over and his country is in a more precarious position than he realizes. The markets and the Fed have to put all of this in perspective.
Unfortunately, no one is cooperating with any of these prescriptions — and so it’s likely to be a wild ride until at least some of them do.
Mark Penn is a managing partner of the Stagwell Group, a private equity firm specializing in marketing services companies, as well as chairman of the Harris Poll and author of “Microtrends Squared.” He also is CEO of MDC Partners, an advertising and marketing firm. He served as pollster and adviser to former President Clinton from 1995 to 2000, including during Clinton’s impeachment. You can follow him on Twitter @Mark_Penn.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.