President-elect Trump just announced a deal to save about 1,000 jobs at the Carrier plant in Indianapolis. This gives us a view into the deal/project mentality that Trump brings with him to the Presidency from his real estate development background.
I happen to think this was a good deal to do. But Trump needs to be careful not to fall into the “mayor trap” of thinking about too many individual projects and ribbon cuttings, and be sure to keep thinking much, much bigger.
I talk about this, and how his real estate background might work with or against the job of the President, in my new City Journal piece “The Mayor Trap“:
Trump thinks big and is a master of complex deal-making. He has a project orientation, seeks to maximize his PR value, focuses on brand-building and increasing brand value, and boasts of his cost efficiency and operational excellence. Trump really did save that late, mismanaged, and over-budget Wollman Rink project in Central Park, finishing in mere months a renovation that had dragged on for four years. He really did spend far less than both his primary opponents and Hillary Clinton during the election. And now he really has cut a deal to save Carrier. “Trump buildings are extremely well managed. Like it or not, he does a good job,” the head of a real-estate brokerage told Crain’s New York.
The challenge for Trump is that this operational orientation translates imperfectly to the presidency. Trump may have run a large business empire, but it’s small enough—even now—for him personally to oversee deals and projects. The presidency isn’t like that. There’s no way he can govern effectively by involving himself in deals relating to individual factories or infrastructure projects.
Abandoning this successful style will be a challenge for Trump. He’ll need to be strategic about which “deals” he chooses to oversee himself as president. The Carrier agreement was high-visibility and it fulfilled a campaign promise, making it a perfect example of the kind of deal Trump should involve himself in. Because Carrier’s parent company is a large defense contractor, Trump had leverage. His running mate, Mike Pence, is still governor of Indiana, and thus had a governor’s economic-development tools to work with. Above all, the Carrier deal sends a powerful message to corporate America: there’s a new sheriff in town. Still, it can’t be the norm. Instead, Trump needs to think bigger, focusing on transformative agreements—renegotiating unfavorable trade deals, getting legislation through Congress, adjusting relations with foreign governments—that affect the larger economy.
Click through to read the whole thing.