John Stoehr: Pro-business reputation takes a hit

Sikorsky-built U.S. Army UH-60 Blackhawk helicopters take off in Romania. A much-publicized $100 billion deal with Saudi Arabia that included Sikorsky helicopters turns out to be less than was advertised. Sikorsky-built U.S. Army UH-60 Blackhawk helicopters take off in Romania. A much-publicized $100 billion deal with Saudi Arabia that included Sikorsky helicopters turns out to be less than was advertised. Photo: AP Photo /Vadim Ghirda / Associated Press Photo: AP Photo /Vadim Ghirda / Associated Press Image 1 of / 1 Caption Close John Stoehr: Pro-business reputation takes a hit 1 / 1 Back to Gallery

There was a consensus among business leaders after the election: Donald Trump is going to be very good for business. The Republicans controlled Congress and the billionaire president-elect promised to deliver on tax reform, drastically simplifying corporate and individual tax rates. Wall Street responded by going on a tear.

That was then.

A new consensus is emerging.

Not only is the president mired in a scandal involving possible ties to Russia, not only has he imperiled the promise of tax reform by appearing to obstruct justice, business leaders have now had time to take a closer look, and many don’t like what they see.

Ray Dalio, founder of Westport’s Bridgewater Associates, voiced the new conventional wisdom Monday. Via LinkedIn, he said: “When faced with the choices between what’s good for the whole and what’s good for the part, and between harmony and conflict, (Trump) has a strong tendency to choose the part and conflict.”

This, Dalio said, is bad for business. “The more I see Donald Trump moving toward conflict rather than cooperation, the more I worry about him harming his presidency and its effects on most of us.”

He isn’t alone.

After Anthem announced it was leaving Ohio’s health care exchanges, the Indiana insurance firm explicitly cited instability. It didn’t blame Trump directly, but the president has hinted the federal government might not penalize those who do not buy health insurance or that it might withhold reimbursements.

Major corporations favor the Paris Climate Accord. It brings predictability to global markets, levels the field of competition and doesn’t ask too much of them. When Trump said the U.S. would leave by 2020, United Technologies got nervous. The Farmington firm said its renewable energy ventures would be disadvantaged. A spokesman said the 200-nation agreement would “ensure that the U.S. is ahead of the curve, rather than behind.”

The president spent the week promoting a plan to invest $200 billion in

infras tructure. But that’s far less than the $1 trillion he has promised. In cash-strapped Connecticut, business groups, elected officials and civic leaders were hoping dearly for a piece of that action. But Trump wants the difference to be made up by private investment. That will have some advantages, but the problem is that investing in infrastructure isn’t the same as investing in a hotel.

Where you profit from infrastructure isn’t necessarily where you need it. As state Republican Sen. Toni Boucher told Hearst Connecticut Media: “When you lose control over cost structure to a private entity, you’re not being as responsive to the public as you should be.”

The American Society of Civil Engineers says investment should be $200 billion per year . Its spokesman told The Atlantic he saw the plan this way: “We’re trying to better understand how that money can be leveraged. I’m not sure I quite understand it yet.”

So: Conflict. Instability. Unpredictability. Let’s add unreliability.

Trump said after returning from overseas that he signed a deal with Saudi Arabia worth $110 billion. About $6 billion of that is for 150 Black Hawk helicopters made by Sikorsky in Stratford. It was great local news. A Sikorsky spokesman said the deal would “help to maintain more than 450 U.S. jobs, including in Connecticut and throughout the U.S. supply chain.” Wall Street responded favorably, too. Sikorsky’s parent, Lockheed Martin, saw its stock price soar.

Just one problem.

There is no deal.

The only signed paperwork are memos of understanding and letters of intent.

Basically, the Saudis have a wish list that includes $6 billion worth of Black Hawk helicopters. But the U.S. Senate has not been notified, meaning there are no contracts yet.

If Trump had indeed negotiated a deal, said the Brookings Institution’s Bruce Riedel, Israel would have demanded one of its own to match the Saudis’.

So nothing has happened yet.

It may never happen. Riedel says the Saudis have been talking for years about buying more arms from the U.S., but oil prices keep getting in the way. With prices low, the Kingdom struggled to make payments for a previous deal signed in 2012 worth $112 billion.

Moreover, most of the details of Trump’s “deal” were known when President Barack Obama announced them in Camp David in 2015. In other words, the president is taking credit for a nonbinding preliminary arrangement negotiated by his predecessor.

Sikorsky, by the way, knew this. That’s why it is so careful to say this new “deal” would “maintain” jobs in Connecticut that already exist.

I don’t blame Sikorsky.

If you’re going to deal with a conflict-prone, unstable, unpredictable and unreliable president, you may as well get something out of it. If his “fake news,” as Riedel called it, helps your stock, well, so be it.

John Stoehr is a lecturer in political science at Yale University. He can be reached at johnastoehr@gmail.com.