First 100 Days

Trump as the First Deal-Maker-in-Chief

Promise and Perils of the Model

Donald J. Trump ran for president on the claim that he was uniquely qualified to solve America’s problems because of his professed business acumen, outsider status, and mastery of the art of the deal. This profession contains a self-diagnosis of America’s problems: America is suffering because politicians who lack Trump’s business experience have been making bad deals on trade, foreign relations, and immigration. What America needs is the first Deal-Maker-in-Chief.

Few voters could have understood what Trump meant by this during the election. To a contract specialist, however, Trump’s first 100 days suggest an emerging approach to governance, rooted in his idiosyncratic business experience, which deserves closer scrutiny from all Americans.

I. Trump’s Model of Deal-making

For most of his life, Trump has run a private family business, initiated by a huge capital investment from his father. Hence, unlike most successful CEO’s of publicly traded companies, Trump has rarely needed to distinguish his personal interests from his executive role. Free from SEC regulation, he has been able to operate with minimal transparency. He has therefore been able to make nimble executive decisions, unencumbered by bureaucratic hurdles or a need to justify his decisions to shareholders or a board.

The Art of the Deal suggests that Trump freely uses factors like these to his deal-making advantage. For example, Trump says that publicly traded companies cannot maximize tax deductions for real-estate depreciation because they need to show shareholders profit.1 But, Trump boasts that he profited from having no such constraints because he has run a private business.2 Publicly traded companies cannot easily expand into suspect businesses either, like gambling, which invite criminal affiliations and fleece people with addictions. But, Trump cites his lack of such moral qualms as helping him outcompete others when expanding into Atlantic City.3 Free from SEC-disclosure requirements, Trump—unlike most CEOs—can also seek to attach perceived value to his brand that far outstrips his actual record of business success.

If freedom of contract includes the freedom to make decisions based on one’s personal interests, without having to justify them to others, then Trump has profited from extraordinary access to this freedom. Freedom of contract is certainly valuable: it can promote economic development and give people space to pursue their goals, without undue oversight or regulation.

Trump’s idea of deal-making nevertheless suggests a narrow construal of this freedom’s purpose.4 Whereas contracts are often embedded in relationships, which create obligations of good faith and fair dealing, a deal is always better if it is cheaper or more conducive to one’s personal interests. Hence, while bargaining, one can sometimes get a better deal by misleading, overselling, leveraging unequal bargaining power, or skillfully avoiding the letter or spirit of legal regulations. Once a contract is formed, one can further increase a deal’s value by taking extreme interpretations of one’s contractual duties, refusing to pay after another has performed, or engaging in bad-faith litigation tactics that are too threatening or costly for weaker parties to resist. All these actions are inconsistent with contract law. But, the law lacks effective mechanisms to prevent powerful parties from using them to profit in many circumstances.

Both The Art of the Deal and public-litigation records suggest that Trump has made free use of all these techniques to get better deals for himself—sometimes making it hard to distinguish the art of the deal from con artistry. As Trump explains, “[m]y style of deal-making is quite simple and straightforward. I aim very high, and then just keep pushing and pushing and pushing to get what I’m after.”5

In addition, not all societal values can be achieved through freedom of contract. Instead, some values arise from living in communities governed by collective deliberation and justifications to one another. Think of marriage, family, and democracy. Think of knowledge and truth. Think of the Constitution, which creates procedures for inter-branch and popular deliberation. Or, think of a world community governed by foundational rules, which no one can reasonably reject, like protections for human rights and laws of war

People of all political persuasions value some of these forms of community, even while contesting the weight and role these values should play in government and law. This presents a question that all Americans must wrestle with: can a president who views all problems of governance as nails, which require the same hammer of better deal-making, truly govern in a way appropriately sensitive to any of our political answers to these questions?

This is an important question because, despite growing puzzles over Trump’s political convictions and pattern of presidential decisions, one of the clearest unifying threads may well be his tendency to approach all governance problems on a deal-making model. There have been several examples of this deal-making model from Trump’s first 100 days in office.

II. The Constitution & Judiciary

When Trump published an explicit and detailed list of candidates to replace Justice Scalia on the Supreme Court, many voters thought he was expressing commitment to certain constitutional principles, like originalism and religious liberty. But, this was also the most particularized transactional approach to Supreme Court appointments in the history of presidential elections. In other contexts, Trump has shown little interest in the Constitution, engaged in repeated attacks on judges, and expressed disregard for principles of religious freedom in his “Muslim travel bans.”

Trump ultimately kept his Supreme Court deal with Republicans and Christian Evangelicals by appointing Justice Neil Gorsuch. Still, even if filibuster rules have become increasingly dysfunctional, the ease with which Trump supported their elimination to get Gorsuch through suggests a shortsighted, instrumental perspective and a tin ear to the value of bipartisan deliberation. Together, these actions suggest more focus on deal-making than respect for either the Constitution or the Judiciary as a coequal branch of government.

III. Free Speech

Trump’s words and actions suggest that he values the personal freedom to repeat falsehoods, sometimes known or rooted in Russian propaganda. He also clearly disdains informal constraints on speech for civility and “political correctness.” Unlike a true free speech champion, however, he has also engaged in rampant attacks on the media and favors stronger libel laws to prevent the free press from critically examining his decisions.

Trump, therefore, appears more interested in using speech instrumentally to pursue his personal and executive goals than in freedom of speech to promote democracy, truth, or governmental transparency and accountability.

IV. Science & Market Regulations

Trump’s proposals to cut science funding threaten research programs at a time when many promise especially large benefits for human welfare. Even if truth and knowledge are public goods, however, not all private deal-makers profit from this public good—as environmental regulations show. To private deal-makers, many market regulations are, in fact, likely to appear threatening. This may explain why Trump could so cavalierly order repealing two administrative regulations for every one passed, regardless of any particularized assessment of costs and benefits.

Sanctions against Russia mimic regulations in that they tax certain deals to promote democracy, human rights, nonaggression, and noninterference in American elections. Some of these sanctions, however, prevented Rex Tillerson, Trump’s current Secretary of State, from closing a $300 billion oil deal with Russia as CEO of Exxon Mobile. As someone steeped in a private deal-making orientation, Trump has shown little understanding of the potential value of these sanctions. He has even suggested that China is smarter than America because its relative lack of concern for democracy and human rights allows it to profit from unsanctioned oil deals with Russia. These are the attitudes of a person who is insensitive to many classes of value that cannot be produced through private deal-making.

V. Healthcare & Long-Term Fiscal Policy

Trump’s earliest actions on the budget and healthcare suggest more focus on short-term legislative wins than long-term fiscal policy. This too may reflect Trump’s deal-making background. Trump often boasts that he makes the greatest deals, including some that allowed him to profit from others’ misfortune, by being extremely wealthy during recessions. Deal-making prowess of this kind requires no understanding, however, of how to promote a working economy for all Americans over the long haul.

It should, therefore, be unsurprising that in his first attempt to repeal and replace Obamacare, Trump relied primarily on the deal-maker’s tools of carrots, sticks, and bluffs. But he showed little to no ability to build policy consensus through substantive discussion. This deal-making approach failed, in part, because the deal Trump pushed showed extraordinary insensitivity to the harmful consequences of the legislation for many peoples’ healthcare costs and coverage. Instead of redoubling efforts to produce policy consensus after that defeat, Trump has begun threatening to intentionally increase the harm to many Americans if he does not get a legislative deal. These responses would appear to be the actions of a person who cannot see much beyond a deal-making orientation.

VI. Immigration & Foreign Policy

A President’s freedom from constitutional constraint is typically greatest in matters of immigration, national security, and some aspects of foreign relations. Still, the recklessness with which Trump initially proposed an all-out Muslim ban to seal the deal with some voters may explain why several lower courts, forced to make quick initial probability assessments on the likelihood of success on the merits of claims including religious discrimination, issued temporary restraining orders or preliminary injunctions pending a final decision on legal challenges to Trump’s travel bans. This is true even though the essentials of Trump’s current travel ban are likely to survive constitutional scrutiny in the final analysis.

Through his unilateral military actions in places like Yemen, Afghanistan, and North Korea, Trump has similarly shown little concern for inter-branch deliberation, congressional (or even adequate expert) input, the value of foreign lives, or the norms of international law and institutions. When dealing with foreign leaders, Trump has used unusual carrots and sticks—e.g., threatening divestment in NATO military support if Angela Merkel does not increase Germany’s investments and changing his position on Chinese currency manipulation to incentivize China’s help with North Korea. But, Trump has shown neither interest nor capacity to use diplomacy to build substantive consensus on any principles that should govern the world order. The question to ask is, thus, whether a deal-making orientation is sufficient to address all the problems that a president faces in international relations.

VII. Financial Conflicts of Interest

Trump is the first modern president to be neither literally subject to financial conflict-of-interest laws that govern the executive branch nor to act as if he were (thus following the spirit—if not the letter—of these laws). Citing legal exceptions for presidents, Trump has taken the unprecedented position that he cannot have any real conflicts. As a result, Trump has not made any meaningful business divestments and is now governing with fewer incentives to distinguish his personal interests from his executive role than any modern president.

This governing style is perfectly consistent with Trump’s lifetime of business experience—which also never required him to distinguish his personal interests from his executive role. Hence, Trump’s approach is now allowing his family businesses to profit from his presidency in historically unprecedented ways—e.g., the repeated use of taxpayer money to pay his family businesses for various official activities and the creation of incentives for third parties and foreign governments to make profitable deals with his family’s businesses or issue them valuable patents. All good deals for Trump—though not necessarily for America. It is hard to serve two masters, and Trump has no experience doing it.

VIII. Official Investigations

Most frighteningly, the FBI and Senate and House Intelligence Committees are currently investigating possible collusion between the Trump campaign and documented Russian interference in the 2016 presidential election. Despite thickening smoke, it’s hard to know how these investigations will end. Even if there was collusion, not all collusion is even provable.

Still, given Trump’s approach to governance, his apparent conception of masterful deal-making, and his methods of maximizing deal-making profits in the past, no one should be surprised if Trump agreed to lift Russian sanctions in return for Russian help with the election (through illicit cyber hacking, targeted Russian propaganda, and/or money-laundered investments in his family businesses or campaign). Winning the election is now allowing Trump to make even better deals for his family businesses and may pave the way for them to participate in unsanctioned oil deals with Russia. (Or some such private deals may already have been brokered). Hence, any such finding would merely confirm what Trump has promised all along: he likes to think big and make the very best deals for himself.

Still, it is a separate question whether this executive orientation is what anyone could have truly wanted or understood to be getting from this president. Given the pattern of decision-making that has emerged from Trump’s first 100 days in office, a pressing question all Americans—whether Republican, Democrat, or Independent—must begin to ask is whether Trump’s basic approach to governance is sufficient to handle all of a president’s functions. After all, a thoroughgoing deal-making orientation, which is too insensitive to the values of collective deliberation and interpersonal justification, can apparently result in disregard for quite a few values. As shown above, some prominent victims to date include the values of democracy, the Constitution, family, religion, religious freedom, civility, knowledge, truth, transparency, accountability, free speech, freedom from financial conflicts and self-dealing, international law, human rights, diplomacy, honesty, and good faith and fair dealing.

In addition, when a deficit is this pervasive, sensitivity may not be something that can be learned. That may well be the most important conclusion to draw from Trump’s first 100 days in office. Deal-making is not governing, and we may not currently have a functional president.

* Professor of law, University of Illinois College of Law.

1 Trump says that “[m]ost shareholders and Wall Street types only look at the bottom line, which shows a profit reduced by depreciation. As a result, corporate manager’s don’t like depreciation much.” Donald J. Trump, Trump: The Art of the Deal 219 (1987).

2 Trump says that because he doesn’t “have to please Wall Street,” he “appreciate[s] depreciation,” adding: “For me the relevant issue isn’t what I report on the bottom line, it’s what I get to keep.” Id. at 219.  He says: “One reason that I particularly liked owning the facility myself—rather than with any partner—has to do with the value of depreciation . . . . Put simply, depreciation permits you to pay lower taxes on your earnings.” Id. at 218. With respect to his casino business, he therefore says: “Merely by running it myself, I felt certain, I could earn a far bigger profit.” Id. at 219.

3 Trump explains, “I’ve never had any great moral problems with gambling because most of the objections seem hypocritical to me.” Id. at 196–97. When explaining his decision to expand from real estate to enter into the casino business in Atlantic City, he says that “for the first time, it occurred to me that even if I finally got the hotel built and it became a major success . . . . , it still wouldn’t be nearly as profitable as a moderately successful casino hotel in a small desert town in the Southwest.” Id. at 196.

4 For a broader construal, which would integrate freedom of contract into a larger set of norms that reflect a moral ideal of equal respect for persons and can sometimes constrain freedom of contract, see Robin Bradley Kar, Contract as Empowerment, 83 U. Chi. L. Rev. 759 (2016).

5 Trump: The Art of the Deal, supra note 1, at 45.