What is the greatest power of the presidency? Is it the power to enact laws? Is it the power to order military attacks? How about the power to pardon criminals and commute prison sentences? All of those are awesome weapons in the chief executive's arsenal. But the most powerful thing the President of the United States can do is send a clear message via the bully pulpit.
Without having to sign a bill or use an Executive Order, a president can make things happen simply by saying it's the right thing to do. And even though he's still only President-elect, Donald Trump is using this power and getting results.
We learned that last night when Ford finally came out and definitively promised it would not move its Lincoln MKC plant from Louisville, Kentucky to Mexico. Trump happily made the announcement on his Twitter account:
Skeptics and Trump detractors jumped all over the tweets, insisting that Ford had never made any solid plans to move the plant in the first place. But as CNBC Auto and Airline Industry Reporter Phil Lebeau explained, Trump can indeed claim a victory here by "getting Ford to reverse plans to move the MKC out of Louisville at some point in the future."
And that's not all, Trump's "Made in America" message also seems to have spurred Apple to consider some form of iPhone production in the United States. One report says the company asked its Chinese-based suppliers to start coming up with ideas on how to move some production to America. It's probably no coincidence that June was when even the ever-faulty pre-election polls showed Trump at his strongest levels of the campaign.
There could be more announcements and stories like this in the coming months through the first 100 days and even first year of Trump's presidency. And even if none of them individually or even collectively actually make a difference in economic growth, it's important to remember that perception is almost always greater than reality in politics.
These kinds of small public relations victories will be helpful for Trump who is coming into office with such high unfavorable ratings and so many Americans actively refusing to accept his election victory. But all you have to do is ask the Clinton campaign and the Democratic Party about how perceptions can change and it's best to have real accomplishments on your side in the long run.
President Obama was able to point to the very slow recovery in the most positive light for most of his two terms in office. It helped him win re-election in 2012 and it seems to be keeping his approval rating above 50 percent as he begins his final two months in office. But Hillary Clinton's happy talk about the economy during the election fell flat because there just wasn't enough economic growth to justify it. Call it bad luck or just bad timing, Clinton found out there is indeed an expiration date on positive political perceptions.
Trump isn't likely to get the kind of grace period President Obama enjoyed. The best he can probably hope for is the timetable president Reagan faced when he took office in 1981. The nation actually went into recession in 1982 and had not shown much real recovery through most of 1983.
By September of '83, Reagan's poll numbers were weak as the period of optimism he initiated was waning. Had the first few months of 1984 not produced the kind of stronger economic numbers that they did, it's arguable even the enormously popular Reagan would have been defeated in November instead of winning a 49-state landslide.
Trump is going to need solid numbers, starting with some form of sustained GDP growth at or very close to the three percent level to win over more suspicious voters and keep most of his existing base.
Real wage growth will need to be higher by 2019 or so. And if higher interest rates are coming, they'll have to find a sweet spot that keeps retirees and cash investors happy without destroying the housing market with soaring mortgage rates. Trump and his team believe reducing corporate taxes, repatriating cash held overseas, and creating large amounts of infrastructure and defense manufacturing jobs will do the trick.
But with a Republican Congress in tow, Trump will have few excuses in the years to come if his favored economic bills are passed and they don't produce the promised results. For now, and maybe for another year or so, little symbolic victories like the Ford announcement and the Apple story will be fine enough. But at some point, Trump will have to deliver the goods.