Strategic Communications and Marketing News Bureau

New paper explores promise, pitfalls of Trump as ‘deal-maker-in-chief’

CHAMPAIGN, Ill. — A new paper by a University of Illinois legal scholar and contract law expert argues that President Donald J. Trump’s model of executive leadership doesn’t augur well for his ability to serve as president of the U.S.

A style of governance that relies heavily on Trump’s long-standing approach to “deal-making” – which includes leveraging unequal bargaining power, overselling and skillfully avoiding the letter and spirit of legal regulations – also has the potential to render his administration acutely prone to incompetence and corruption, said Robin B. Kar, a University of Illinois professor of law and of philosophy.

Trump’s narrow conception of deal-making is inimical to accountability – the lifeblood of good government, Kar said.

“We can elect whomever we want as president, but since each coequal branch of government serves a discrete and complex set of functions, ‘deal-making,’ however you wish to define it, doesn’t necessarily lend itself to good governance,” said Kar, an internationally recognized scholar of moral and legal philosophy.

Trump’s claim to fame – business mogul who makes great private deals – seems to be wholly incompatible with the broad range of issues that will inevitably arise as president, Kar said.

“He believes that there’s an analog between being an executive of a private, family company and being the executive of a public body,” he said. “But, in fact, they’re very different systems, and at times there is little overlap in expected function.”

Candidate Trump campaigned on the platform that America was suffering from a dearth of good deals on “everything – trade, foreign policy and immigration, to name a few,” Kar said.

“What the country needed was someone with Trump’s business acumen to be the first ‘deal-maker-in-chief,’” Kar said. “Trump is now governing on a model of private deal-making. Well, deal-making is not governing. And whether you support Trump’s policy goals or not, this approach is now causing an unprecedented level of governmental dysfunction.”

In business, one is trained to maximize profits through freedom of contract. But in government, not all societal goals and values can be achieved through freedom of contract, Kar said.

“Some values arise from living in communities governed by collective deliberation and justifications to one another,” he said. “Think of marriage, family and democracy. Think of knowledge and truth. Think of the Constitution, which creates procedures for interbranch and popular deliberation. Or think of a global community governed by foundational rules, which no one can reasonably reject, like protections for human rights and laws of war.

“All of those values are counter to the zero-sum, ‘I win, therefore you lose’ game of deal-making. And people on all sides of the political spectrum care about some values of this kind.”

Kar also believes Trump’s conception of deal-making itself is flawed.

“It prizes a narrow interpretation of freedom of contract,” he said. “Trump thinks of it as ‘Do whatever you want without having to justify yourself to anyone else.’”

In the past, Trump has sought to maximize the value of his private deals by extreme interpretations of his contractual duties, Kar said.

“After forming contracts, he has sometimes sought to increase a deal’s value by refusing to pay after another has performed, or by engaging in bad-faith litigation tactics that are too threatening or costly for weaker parties to resist,” he said. “Those kinds of hard-nosed tactics may increase a deal’s value to one person, but they are inconsistent with contract law.”

Contract law has duties of good faith and fair dealing, but Trump’s conception of deal-making “is insensitive to these values or others produced by collective deliberation,” Kar said.

“The pattern I see is inattentiveness to democratic and constitutional values, and outright contempt for good faith and fair dealing,” he said. “When you’re in private deal-making mode, you do not have to justify your decisions to anyone. You can burn bridges with your business partners at will, so long as new partners are willing to engage. That’s not such a good idea when you’re in government.”

Trump’s perspective on deal-making also suggests that deals are always better when the end result is cheaper or more aligned with one’s personal interests – “a myopic view that doesn’t necessarily comport with democratic values, or translate into good government,” Kar said.

“For most of his life, Trump ran a private family business that was underwritten by capital investments from his father,” he said. “Thus, unlike most successful chief executives of publicly traded companies, he has rarely needed to distinguish his personal interests from his executive role. And it’s not clear that he’s doing that well now, either.”

By running a private family business, Trump has been free from the oversight of federal watchdogs such as the Securities and Exchange Commission, meaning “he has been able to operate with relative impunity,” Kar said.

“He has been empowered to make executive decisions that are unencumbered by bureaucratic hurdles or a need to justify himself to shareholders or a board,” he said. “Now, as president, he has more than 300 million stakeholders he has to answer to, as well as other coequal branches of government. It’s an unfamiliar position for him, to say the least. That lack of familiarity renders him particularly susceptible to abuses of presidential power for private gain.”

The paper was published in a special issue of the University of Illinois Law Review that examined Trump’s first 100 days in office.

Editor’s notes: To contact Robin B. Kar, call 217-333-4461; email rkr@illinois.edu.

The paper “Trump as the first deal-maker-in-chief” is available online.

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