Trump’s Attack on Amazon Actually Has Its Precedents
As public attitudes towards Silicon Valley and Big Tech continue their rapid pivot from admiration to vilification, the current occupant of the White House has sought to lead the chorus. Several weeks ago, he launched a tweet-driven crusade against Amazon and CEO Jeff Bezos, accusing the company of ripping off the US Postal Service and harming Americans by not collecting more sales tax. His Thursday order for a review of the Post Office’s finances is a clear attempt to undermine one of its largest customers, Amazon.
Zachary Karabell is a WIRED Contributor. Karabell is the head of Global Strategies Envestnet and the president of River Twice Research.
The president’s aggressive—and factually debatable—attacks have triggered concern about the fragility of our democracy and the potential for the powers of the state to be used to quash private companies. Former Treasury Secretary Larry Summers said Trump’s attacks on Amazon echoed Mussolini’s Italy, where the state cowed private companies or destroyed them. Sheila Bair, former chair of the FDIC, suggested that Trump is undermining the Bill of Rights by assailing a company based on personal pique at negative coverage in the Bezos-owned Washington Post.
Yet, here as elsewhere, the reaction to Trump may say more about his ability to arouse strong and often negative passions than about how close the US is to a constitutional crisis or an erosion of fundamental liberties. Trump is hardly the first president to attack a large company by name. He is by no means the first to let his personal animus dictate his approach, nor the only to contemplate using the considerable powers of the presidency to harm or hobble a company or CEO that he dislikes. While the past is at best prologue, compared with presidents of yore, Trump hardly stands out as remarkable in his willingness to engage in personal and public feuds with large corporations that piss him off.
Take Teddy Roosevelt. He famously began his tenure in the White House, on the heels of the assassination of William McKinley, with a vow to take on the large conglomerates then referred to as “trusts.” He wrote to Congress at the end of 1901 that “There is a widespread conviction in the minds of the American people that the great corporations known as the trusts are in certain of their features and tendencies hurtful to the general welfare.” The only way to protect the common good and counter the “crimes of cunning” perpetrated by the business world was to more aggressively use the authority of the recently passed Sherman Antitrust Act.
Roosevelt then proceeded to take on the largest trust of the day, the Northern Securities Company formed in 1901 by an alliance of banker JP Morgan, railroad magnates, and oilmen including John D. Rockefeller. The resulting holding company controlled an inordinate percentage of the nation’s rail lines, with the potential to raise prices for its own profit at the public’s expense. So Roosevelt—personally—instructed his attorney general to prosecute Northern Securities under the Sherman Act. The trust fought back, but the Supreme Court ultimately sided with the government and Northern Securities was forced to dissolve.
Trump has yet to do anything nearly as draconian. Some have suggested that he is responsible for the Justice Department’s suit to block the proposed merger of AT&T with Time Warner, because of his oft-stated dislike of Time Warner’s CNN. But it appears that the case was instead initiated by attorneys in the antitrust division and not on the urging of the White House. Nor has Trump used the Justice Department to go after any other company. His words may be ominous but his actions here have been essentially non-existent.
After Northern Securities, Roosevelt’s trust busting met considerable resistance, as courts showed less willingness to endorse breakups. Franklin Roosevelt had more success tearing down the power of large banks during the Great Depression. The large banks’ role in the crisis remains unclear, but FDR made them his prime target in 1933. “A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor—other people’s lives.” Such attacks may have been seen as justified, but many Trump supporters see his attacks on some private companies as equally justified. All is not in the eye of the beholder, but some surely is.
Flash forward to the 1960s, when John F. Kennedy squared off against the CEO of US Steel over steel prices. Believing that he had been double-crossed by CEO Roger Blough over the size of price increases, Kennedy vowed to retaliate. “You have made a terrible mistake,” Kennedy told him. “You have double-crossed me.” He then announced at a press conference that the steel conglomerate was guilty of “a wholly unjustifiable and irresponsible defiance of the public interest,” perpetrated by “a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility.” Kennedy ordered the Defense Department to steer orders away from US Steel and towards companies who hadn’t raised prices, and instructed other agencies to probe US Steel for regulatory and tax irregularities.
Arguably, Kennedy’s vendetta against US Steel was a move to defend the public good against a private company’s self-interest, but the actions and the anger were nonetheless personal. Kennedy showed an easy disregard for process and a casual willingness to go mano o mano with a corporate executive simply because he felt a deal hadn’t been honored. Somehow, democracy and the republic survived.
And then there was Nixon, whose rage and fury at the press and at enemies real and perceived are captured in hundreds of hours of taped conversations. It was Nixon after all who publicly accused his enemies of a “witch hunt.” Not only did he sue both the Washington Post and The New York Times for leaks of the Pentagon Papers, he ranted late into the night about Jews controlling the media. His threats and language were raw and ripe and menacing, and perhaps the biggest difference with Trump was that most of those rantings were in private. He used the FBI to harass opponents, and the IRS to put pressure on companies that he did not like or that he felt had crossed him. In the process, Nixon provoked a constitutional crisis of the sort that Trump’s critics now fear.
For the moment, Trump hasn’t gone that far. But this little tour of history suggests that power struggles between presidents and large companies were based on different understandings of the legitimate powers of government. We may tend to side with JFK in his campaign against big steel, but it was still a questionable use of presidential power based largely on personal anger that a deal—with no force of law—had fallen apart. The prospect of the executive branch going after a private company can seem disturbing, but it’s hardly unique to Trump. His verbal assaults are a long way from autocracy and the end of the rule of law. Words and deeds are not the same. That isn’t an argument for complacency, but it is a call for waiting until words translate in troubling deeds before we sound the klaxon too loud.