Time to bail out of tech stocks
The shutdown of President Trump's tech-heavy advisory councils in the wake of the Charlottesville kerfuffle bodes ill for toppy tech valuations
It appears increasingly likely the US president will double down on economic populism in response to the cold shoulder he got from tech executives. His Aug 17 tweet faulting Amazon for “doing great damage tax paying retailers” is the first salvo of what will likely be a long war.
White House strategist Steve Bannon gave some indication of where Trump’s political agenda may go in an interview with the American Prospect, a left-wing publication associated with old-fashioned Democratic Party economic policies. While the Democrats (and a lot of the Republican Establishment) bash Trump for insufficient sensitivity to racial concerns, the trade-union wing of the party has no representation in the Democratic leadership.
The traditionally Democratic voters who put Trump over the top in Michigan, Ohio and Wisconsin have little patience with protesters pulling down Confederate statues. Trade protection and immigration limits are longstanding trade-union demands (big business always liked immigration, and the tech companies love free trade). The outrage over Trump’s supposed insensitivity over Charlottesville won’t impress his base. A CBS news poll released this morning shows that the president still has the support of 67% of Republicans.
The more the Democrats wave the bloody flag of Charlottesville, the less their working-class base will believe that the party leadership represents their interests. Trump may run against big US corporations who are selling out American economic interests to China. So far the president has done little more than jawbone US companies to bring jobs stateside. He could do a great deal more, for example, prevent US companies from giving know-how to the Chinese in return for access to the Chinese market–a standard way of doing business with China. He could also require the Defense Department to buy American exclusively for certain categories of defense goods. That would not be a good outcome for US tech stocks.