CEOs: A Machiavellian Tiptoeing Act Through the Trump White House

Is it better to be loved or feared?

If you asked Machiavelli, he would say it’s better to be feared than loved … if you cannot be both, of course.

For high-profile CEOs around the world, the new Trump administration represents a Machiavellian tiptoeing act that involves both fear and love.

That’s the general conclusion to be drawn by a piece in Monday’s New York Times titled, “For CEOs, a New Concern: The Activist-in-Chief.”

In his article, writer Andrew Ross Sorkin puts the issue into context this way:

As corporate executives around the globe try to understand the implications of the Trump administration on their businesses, they seem to be having an almost bipolar reaction: a euphoric sense that regulations and taxes could soon be lowered — which would likely increase their profits and paychecks — yet a simultaneous anxiety that they could become a target of one of the president’s Twitter tirades, which could undo their businesses or possibly their careers.

That’s about as love/fear as it gets. And the implications here are profound — not only for high-profile CEOs, but also for us investors.

Sorkin goes on to describe the many CEO “pilgrimages to Trump Tower” that we’ve seen since the election. Ones that comes complete with photo ops and tweets of the event.

On Monday, the pilgrimage extended to the White House. There, CEOs Elon Musk of Tesla Motors (TSLA), Kevin Plank of Under Armour (UA), Andrew Liveris of Dow Chemical (DOW) and several others had a meeting with President Trump.

Per Sorkin:

This meeting and similar ones, according to more than a dozen executives who have attended them, are viewed by the executive class not only as an opportunity to help shape policy in their favor, but also, perhaps more important, as a defensive measure aimed at making “friends” with the new president so as to avoid his wrath later.

Avoiding wrath certainly fits the fear category. Yet the opportunity to shape policy in one’s favor fits into the love category.

Whichever the true motivation, we do know that some companies have already changed things up because of Mr. Trump.


As Sorkin points out, Jeff Bezos’ (AMZN) recently announced it will hire some 100,000 new employees. Automaker Ford (F) has canceled plans to build a factory in Mexico, saying it would also create 700 U.S. jobs.

Then a big surprise came yesterday, as Chinese electronics manufacturer Foxconn (the company that produces Apple’s (AAPL) iPhone), announced that it may spend some $7 billion in the U.S. to build a factory that could employ 50,000 people.

So certainly, changes are afoot in the corporate world, and you can chalk that up in large part to fear of the Trump Twitter account.

Even Trump friend and special adviser on regulation Carl Icahn admitted to Sorkin this was the case.

Here’s what Icahn told Sorkin in an interview for the NYT piece:

“If they are taking advantage of the system, they should be scared,” Mr. Icahn said of corporations. “Remember, many of the guys I went after deserved to be scared — but in many cases, I bought stock in companies with managements I liked, and I helped them get things done with recalcitrant boards.”

Now, do I think this is right?

Not really. In fact, I don’t like the idea that CEOs make decisions out of fear of the president of the United States.

What I do like is the potential for CEOs to help shape the regulatory landscape such that it favors commerce, business and capitalism.

It would also be better if CEOs were (or could be) motivated out of love for a president who helps make the business climate in the country much more friendly to corporate American than it’s been over the past eight years.

If this ends up being the Trump legacy, then I too will have some love for the entire situation.


Do you think fear is a good motivation for CEOs? What about the chance to shape policy in their favor? I’d love to hear what you think about this issue, and I encourage you to jump right in. Doing so is as easy as leaving me a comment on our website or sending me an e-mail.


Five Dow names — 3M (MMM, -1.4%), DuPont (DD, +4.5%), Johnson & Johnson (JNJ, -1.9%), Travelers (TRV, -1%) and Verizon (VZ, -4.4%%) — reported earnings today. Despite their mostly negative performance, the Industrials gained 113 points (+0.6%).

• Financials and tech stocks led the broader markets higher. And this led the S&P 500 and Nasdaq to post all-time closing highs. The S&P ended Tuesday’s session at 2,280.07 (+0.7%) and the Nasdaq came in at 5,600.96 (+0.9%).

• TransCanada (TRP) gained 3.5% after Donald Trump OK’d through executive order two controversial pipeline projects, Keystone XL and the Dakota Access Pipeline.

• Pumping the brakes on Brexit? The UK Supreme Court said Parliament must approve it before the process begins.

• Oxfam International: The richest 1% of individuals in the world have a collective net worth that exceeds the collective net worth of the other 99% of people in the world.

• An estimated 52% of American adults were invested in the U.S. stock market last year, either in personal accounts or through their retirement portfolios, according to Gallup. The S&P 500 gained +12% (total return) in 2016, higher than the index’s trailing 50-year average performance of +10.2% per year.

• Department of Labor: Inflation (as measured by the Consumer Price Index) advanced by +2.1% during 2016. Inflation in 2015 (+0.7%) and 2014 (+0.8%) were 2 of the 3 lowest rates of annual inflation in the United States in the last 50 years, i.e., 1967-2016.

• The world’s most-expensive city to live in is Hong Kong, according to the 13th Annual Demographia International Housing Affordability Survey. It says Hong Kong’s housing market is the least-affordable in the world.

• ETFs saw $288.6B of inflows last year. This puts them near $3T in assets under management (AUM). PricewaterhouseCoopers predicts AUM will grow 23% a year to reach nearly $6T by 2021. Mutual funds, which have $16T in assets, saw $90B in outflows in 2016.

Good luck and happy investing,

Brad Hoppmann
Uncommon Wisdom Daily

Your thoughts on “CEOs: A Machiavellian Tiptoeing Act Through the Trump White House”

  1. Yes I think that CEOs who make their money in the US should be uncomfortable about supporting other country economies but not wanting the US citizens to know about it. Already people in many other countries pay less for items than we pay for the same item so we are contributing the higher profits made by selling in the US and receiving less of the jobs with which the products are made. Go Trump.

  2. I agree that corporations should not “fear” our government. But it would be helpful if some of these companies recognized, for a change, U.S. national interests. Our National Debt is now $20 Trillion. We simply MUST get OUR citizens back to work and balance our budget. These companies simply MUST start thinking not only about themselves but also about the status of our nation as they plan their strategies. And this applies to individuals also. Time to stop some of this selfish thinking and consider the country….as JFK said (in a fashion).

  3. Even if he isn’t an economic disaster for the country, this is all feeling like a nightmare. Threatening a police state in Chicago? Military parades to show our might to whom — disobeying citizens? No need to fund the humanities? Gathering his group of male swamp monsters to hijack women’s health care? I didn’t vote for socialism but I sure didn’t want to invite fascism either.

  4. Start with love . Nothing ever wrong with it . It is said ” love begets love”. Give him a chance to deliver his TOUGH love . See how it pans out!

  5. Yes, Trump knows how to negotiate, and always opens with his bottom position, which is scary until you understand him. The problem I see is that everything, so far, has to be done by him. It’s the cult of I, and that is the hallmark of the dictator (think Putin). We’ll have to see how things go once he gets his full team around him, but this being called to Trump Tower or the Oval Office is going to wear people out. People have to be able to do their jobs without waiting for a tweet, or democracy and freedom are in jeopardy. And President Trump, please stop the childish personal attacks!

  6. Mr. Hoppman, after some years I just unsubscribed to your newsletter. If I want to read attacks on our new President, all I need to do is turn to the major media. You are free, of course, to find fault with his efforts to make America business-friendly once again, but I’m free to turn elsewhere for actual financial commentary. When you start complaining that CEOs should based their economic decisions on “love” for the U.S. president, your basic credibility spirals right down the drain, I’m afraid. I do not recall you expressing comparable concerns over our Marxist-Islamist President, sir. For every reader who’ll tell you what you’re doing wrong, there probably are ten who simply turn away from your service.

  7. it is sad that the US is turning into a fascist dictatorship. Dictators thrive on the fear of others. That means that CEOs of many companies enable this mini-Hitler. It also shows that the chase of money destroys morals and most probably personal integrity. This environment fosters corruption and decadence.
    What a shame the US voters have served us!

  8. You want to know what I think? I think that President Trump, based on the way he is acting, may actually be insane. If he continues on the same course he is on so far, things could really start turning to shit and, if they do, he could be declared unfit for office and be removed!

  9. Why oversimplify the man? President Trump is a complex world class business leader who now is also a world leader who deserves to be respected and not demeaned. He is the master in making deals and has many tactics up his sleeve to accomplish his goals. Great Presidents like Abraham Lincoln, Franklin D. Roosevelt and Ronald Reagan also knew human nature well and used the appropriate approach to persuade, and get people to get along and do things his way and get the job done. Let us give President Trump a break and give him his due consideration and support him in doing his job. He deserves the so called honeymoon period for the first 100 days!

  10. Trump should bear in mind the old saying “… you can attract more flies with honey than with vinegar.” But it’s clear why Trump becomes combative. It makes people step back, proceed more cautiously and give Trump some room to achieve some compromise – Art of the Deal.

  11. Super PACs have raised hundreds of millions dollars for both political parties while billionaires such as the Koch brothers have spent tens millions providing campaign funds to the political candidates of their choice. Let’s not forget the lobbyist on K Street or organizations like the NRA. Just about every member of Congress has been bought and paid for by the corporate elite or well funded special interest group to ensure their political agendas are looked after.

    The current occupant of the Whites is a charter member of the 1% club as is most of his cabinet. I am not optimistic much has changed in Washington to benefit the average American but instead will continue to favor rich & powerful at the expense of all others.

  12. Let’s not call it fear. Let’s call it respect for a man on a mission to restore America’s prestige, wealth and respect. Trump knows how to talk business and other CEOs get it. The main thing is for the rest of us to stop the fear-mongering that kills optimism.

  13. For once, we have an executive leading the Executive Branch. Those who have been excessively feeding off our taxes are running scared and those have paid taxes are finally getting their just dues. Those who don’t understand the change still try to measure Trump against the performance of professional politicians (Trump is a business owner/CEO). Further, this CEO understands the correct balance between share holders, labor, and community. I look forward to the first quarterly report.

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