A MAN with a background in business, running on a platform of lower taxes and protective tariffs, is elected president of America. He views this as a mandate to intervene in corporate affairs. Bosses are told what their priorities ought to be: more jobs and higher wages. This may sound like Donald Trump, already successful in persuading Ford, a carmaker, and Carrier, an air-conditioning company to keep jobs in America even before his inauguration. It also describes Herbert Hoover. In 1929, soon after he was sworn in, Hoover called executives to the White House for some “jawboning”. For intervening in business from a position of authority has a long tradition in American politics.

The desire to meddle dates as far back as 1791. Alexander Hamilton then set out arguments for nurturing and protecting “infant industries”. Any restraint was in part because the federal government lacked the resources and authority to do so. Individual states, however, took on the role with gusto. By 1840 they had lent and invested themselves into the red, prompting laws preventing future intervention. Almost all, says Naomi Lamoreaux of Yale University, were rescinded in the 20th century as the memories of failures faded while the desire to intervene remained.

States now compete furiously for business. Firms shop around for the most favourable subsidies when deciding where to locate headquarters, factories or sports teams. Carrier’s decision to stay in Indiana was assisted by the promise of hefty tax exemptions. New York has allocated billions of dollars to encourage tech firms to set up in depressed areas of the state.

Presidents have also long attempted to shape corporate activity using any means at their disposal. Carrots are dangled and sticks wielded. Shame and praise, broad rules and one-off deals, startup funds and nationalisation have all played a part. The result has been an often-fractious relationship between business and government. Mr Trump’s interventionist instincts may differ only by degree.

The federal government’s largesse towards business began in the latter half of the 19th century with the railways, which cut across state boundaries. Early intercontinental lines received federal loans and large land grants in the West. The irresistible urge to oversee parts of the economy meant that in the 20th century handouts turned to direct management. In part this was driven by national emergency. Woodrow Wilson, under laws passed to support involvement in the first world war, nationalised railways, canals, telegraph lines and arms production, and expropriated American subsidiaries of German firms. Franklin Roosevelt used the same law to shut banks briefly upon his assumption of the presidency in 1933.

Roosevelt had previously observed Hoover’s hands-on approach to business with disdain but his reservations were transient. Intrusiveness is popular because it yields immediate results. Hoover’s jawboning had persuaded Henry Ford to raise salaries at his car plants, utilities to invest, and companies not to cut jobs. To boost wages, Hoover curtailed immigration. To protect businesses he signed the Smoot-Hawley Act, increasing duties on thousands of imports from beverages and wool to tungsten and clocks.

Train of thought

After unseating Hoover, Roosevelt busily issued regulations and told businessmen how to conduct their affairs, pausing only when the Supreme Court ruled that there were limits to federal power over intrastate commerce in a case that challenged the administrations’ power to block customers from buying the chicken of their choice.

The enthusiasm for meddling survived other presidential transitions. Roosevelt’s successor, Harry Truman, seized 28 enterprises, including meat packing, railways and oil refiners, often in response to labour disputes. This behaviour only ended in 1952 when nationalisation of the steel industry to preclude a strike was blocked by the Supreme Court, which said Truman needed congressional support.

Direct control is not the only way to use the power of the presidency. The bully pulpit can be even more effective. The era of explicit bullying began with Teddy Roosevelt, who lambasted the men behind large corporations as “malefactors of great wealth” and launched antitrust prosecutions. But the most famous use of the presidency to berate firms came in 1962.

Stung by an announcement of steel-price increases, John Kennedy sermonised rather than nationalised. He blamed “a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility…[and]…shows such utter contempt for the interests of 185m Americans”. Facing a public backlash and after visits from the FBI, to check of their expenses, the steel bosses caved in. A decade later Richard Nixon went further. In response to a “real and pressing problem of higher prices”, he froze all wages and prices.

American presidents can hand out favours as well as harsh words. In 1962, when France and Germany imposed duties on American goods, including chickens, Lyndon Johnson responded by imposing a tax on imported pickup trucks. This resulted in a lucrative part of America’s vehicle market being produced almost entirely domestically. Carmakers sought favours again in the early 1980s, from Ronald Reagan. He imposed “voluntary” export restraints on Japanese carmakers. They responded by building factories in America.

The arrangements between government and business have become more complex in recent years, as broader policy replaced specific interventions. Bill Clinton, for instance, was adept at using arcane incentives, often in the form of obscure tax benefits, or threats, such as restrictions on operations or acquisitions. Disastrously, banks were encouraged to issue more subprime loans to advance the administration’s interest in home ownership by poorer people. More recently Barack Obama has pursued this technocratic approach, issuing vast numbers of rules that give discretion to arms of the executive branch. The finance and energy sectors have been particularly affected.

Is it working?

As Mr Trump prepares to follow in, and perhaps embellish, this tradition of presidential activism, the most important question is whether it works. Mr Trump’s goal of boosting manufacturing employment would require reversing a 70-year trend (see chart). The consequences of presidential action, intended and unintended, can be hidden, indirect or long delayed. But there are many reasons to believe politicians would do better by focusing their attentions elsewhere.

Direct investments seem particularly fraught. The Obama administration lost $535m in public guarantees for Solyndra, a manufacturer of solar panels that filed for bankruptcy in 2011. Johnson’s subsidy for pickup trucks provides an explanation for why America’s big carmakers were so uncompetitive that they came close to perishing in the financial crisis, surviving only after a bail-out by Mr Obama. It skewed production and left them unable to respond when high fuel prices shifted buyers towards more fuel-efficient cars.

Similarly, enthusiasm for forcing down prices through persuasion or law has faded. Kennedy’s anger at the steel industry is now seen as rage misdirected at a symptom, inflation, rather than the problem itself—onerous labour contracts and a lack of investment. Nixon’s wage and price controls, initially greeted with applause, were disastrous. Production slowed and shop shelves emptied. Hoover’s jawboning to preserve wages and employment undermined firms’ ability to adjust to an economic slowdown and his endorsement of Smoot-Hawley partly caused a worldwide depression by undermining trade.

However important those lessons may be, Mr Trump is likely to draw others, notably that there is plenty of precedent for presidents to meddle with business. If Mr Trump differs from his predecessors, it is in the pleasure he takes in doing deals. Many presidents were fond of the occasional anti-business rant but none has shown the same delight in one-off negotiations that produce winners (Mr Trump) and losers (anyone on the other side of the table). For that reason alone, his brand of interventionism may be more heavy-handed than any in the recent past.