How would Donald Trump lead the nation? At Fortune, we decided to try and answer that question by looking at how he ran his business. Our piece, by Shawn Tully and Roger Parloff, is running in the May issue of the magazine. You can read it today, here.
Separately, I’ve been critical of the current crop of political candidates, including both Trump and Clinton, for not offering a pro-growth agenda. But what would such an agenda look like? Today, we also are releasing an essay from two erstwhile presidential hopefuls – former Republican Governor Jon Huntsman and former Democratic Senator Joe Lieberman – that offers one answer. The organization they chair, called No Labels, has put together a list of 60 proposals for consideration by the next president that you can read here.
The No Labels proposals will leave Washington lobbyists howling. The tax reform plan, for instance, would eliminate the lower tax rate on capital gains loved by the investor class, and the proposal to let the federal government negotiate drug prices will be attacked by pharmaceutical companies as price controls. Their proposals to cut income and corporate tax rates and sunset regulations will anger those who wrongly think throttling business and redistributing income is the key to combatting inequality. In short, the proposals violate the dogma of the left and the right.
But that’s what makes them worth studying. These proposals weren’t designed to satisfy partisan ideologues or special interests; they were designed to promote growth and raise American living standards. Each has been shown in polls to have the support of a majority of Americans. Whoever wins in November should pay some heed. The partisan strategy for governing has clearly failed. This is a roadmap to a more bipartisan approach.
Let me know your reaction.
Deadline Day for Volkswagen
Volkswagen is expected to admit that it hasn’t been able to fix up to 500,000 cars with 2-liter engines to make them conform to U.S. environmental regulation, and will therefore offer to buy them back. German media reports are mooting that drivers will also get up to $5,000 in cash compensation through a specially set up fund. This isn’t the end of the scandal, although it does provide some clarity regarding a major element of it: how to appease U.S. customers and dealers. But the company still faces lawsuits and criminal investigations in a number of countries, and its credibility took a hit earlier this week when it emerged that the idea of installing ‘defeat devices’ to fool U.S. regulators went back a lot further than it previously claimed, and originated not in a close circle of conspirators at its Wolfsburg HQ, but at its upmarket Audi brand, based hundreds of miles away. The company’s shares have risen 5% in Frankfurt this morning to a new high for 2016, underlining how much markets love the removal of uncertainty. Fortune•
Mitsubishi’s Horror Show
On the subject of mendacious motor makers, Mitsubishi’s shares were suspended in Tokyo today after falling 33% in two sessions on the news that it had falsified fuel economy figures for four models of minicars that represent about 40% of its sales in its home market of Japan. They’re also popular in the wider Asian market. In addition, it admitted to using an unapproved testing method for over a decade (another echo of the VW case, which arose from carmakers’ undue control over testing conditions). One of the worst aspects is the damage done to Mitsubishi’s relationsip with Nissan, which sells two of the models under its own badge, through its own distribution network (and the fact that it was Nissan that alerted it to the problem is mortifyingly embarrassing). President Tetsuro Aikawa has already warned that the affair is likely to have a big impact on profits. Financial Times, subscription required•
Commodities Come Out of Hibernation
It’s springtime for those who get stuff out of the ground. Crude oil prices have surged to their highest this year, while iron ore and copper, two (very rough) proxies for the strength of industrial activity around the world, are also on the up. The common theme is that producers are finally succumbing to reality and scaling back output after over-investing in new capacity over recent years (although skeptics would argue that the output cuts may be more apparent than real). Meanwhile, fears for the Chinese and, indirectly, the global economy appear to have receded somewhat. There are still risks aplenty out there: Saudi Arabia and Russia are both talking tough about raising crude output again, but the fact that the market is rising despite such talk (and despite the end of a strike in Kuwait that disrupted short-term supply) suggests that the worst is past. The bad news for the U.S. is that it’s local shale oil producers that are bearing most of the adjustment burden. Reuters
• Elsa > Barbie
Never underestimate the power of Disney. Mattel’s loss widened in the first quarter after the toymaker lost the precious franchise for ‘Frozen’ and other princess dolls to rival Hasbro. Disney Princess products had generated 7% of Mattel’s sales in 2015, and they’re now plumping up Hasbro’s bottom line nicely: it reported better-than-expected figures for the first three months earlier this week. Mattel desperately needs its reinvention of the Barbie doll to pay off, but the signs so far are that it is only really doing so in the U.S., where sales rose 11% on the year. Globally, though, Barbie sales fell 3%–a ninth straight quarterly drop. WSJ, subscription required
Around the Water Cooler
•Obama Flies Into Brexit Storm
President Barack Obama is dropping in on Queen Elizabeth II on her 90th birthday today, and will be trying to avoid getting drawn any more deeply into the storm over Britain’s referendum on whether to leave or stay in the European Union. The White House, along with the IMF, the OECD, the British Government, the Bank of England and, of course, the E.U. itself, have all tried their best to reason, cajole and scare the population into remaining. The trouble is, that sort of thing strengthens a Leave campaign which derives its emotional energy from revolting against the blandishments of complacent, financially secure and–let’s not duck the issue–often foreign elites. London Mayor Boris Johnson has already labeled the President a hypocrite for urging on Britons to sacrifice sovereignty in a manner that Americans would never agree to. The Mayor has a point, if you overlook (as many Britons are wont to do) the fact that Britain no longer has the military capability nor the influence over the global economy and financial system that are the ultimate guarantees of sovereignty. Fortune
• Trump Gets Serious
Fresh from a convincing primary victory in his home state of New York, the GOP front-runner is shaking up his campaign tactics in what appears to be an effort to project a more statesmanlike image. The Wall Street Journal reports that Trump is planning a heavyweight speech on foreign policy in Washington D.C. next week, for which he may use a teleprompter. That’s quite a break from the impromptu and conversational style that has brought Trump this far. The question is, can he bolster his credibility as a serious presidential candidate without losing the spontaneity that has made him so popular at grass roots level? WSJ, subscription required
• Comcast Outfoxes the FCC
Comcast has fired back at the FCC’s proposals to break open the digital and cabet TV market. It’s making its full TV service available on Roku devices and Samsung smart TVs for the first time, without asking customers to lease its set-top box. The Wall Street Journal reported that Comcast will partner with any and all device makers to offer the app more widely. WSJ, subscription required
• Showtime for Mario
Mario Draghi is expected to offer a spirited defense of the European Central Bank’s monetary policy against some increasingly nasty German sniping. Over the last month, he’s been accused of helping the rise of new far-right parties with a low-interest rate policy that has hit German savers. And his suggestions that the ECB might ultimately consider the creation of ‘helicopter money’ to keep the Eurozone away from deflation have prompted outrage. The ECB isn’t expected to add any more stimulus this week, which means the focus will be on whether Draghi can avoid another unwelcome strengthening of the euro against the dollar with his press conference comments. ECB webcast, starting at 0830 ET