here, there, and everywhere
business business business as an instrument of power
I thank the two individuals who caught my auto-correct miscorrection on Wednesday. As I said in a subsequent column, China is currently a rule-by-law system while we are rule-of-law. They are quite different in effect. Always send me questions to ensure that I said what I meant!
As we close February 2025, today's topics on any news source, online or beloved hard copy, appear business-related. Is that because business is becoming the sole instrument of power? I think not.
President Trump did not sign an agreement with President Vlodomir Zelenskyy to assure U.S. revenue from Ukraine's vast mineral deposits, although that event was the focus of the Ukrainian leader's visit this afternoon. Instead, a pre-signing meeting collapsed when Trump and his vice president labeled Zelenskyy disrespectful when the latter disputed the POTUS's demands for peace between Russia and Ukraine. Trump had intended to use the accord on Ukrainian minerals as collateral for any U.S. support in the peace negotiations with Putin's Russia.
This incident exemplifies the President's preference to deploy business (through negotiated access to provide an advantage or implement tariffs to impose a disadvantage) arrangements as an instrument of statecraft. In strategy terms, Trump seeks to utilize carrots and sticks for business access as a renewed emphasis on the economic instrument of power. The President's propensity to use threats is an additional shift from the approach of his predecessors. We have yet to see how this will result in successes or failures as individual cases unfold.
Bloomberg.com reported this morning that 10% of our households in the United States now control 50% of consumer spending, equating to roughly a third of gross domestic product. Think about those numbers. That may not be the highest concentration of wealth we have ever seen. Still, households earning $250,000 annually disproportionately affect consumer spending and the economy overall. It's hard to conjure up a different interpretation of these numbers. Earlier in the week, the Wall Street Journal noted that the wealthy are fueling spending faster than inflation, but I saw nothing quite as stark as this emphasis on half of consumer spending. In a period of deep concerns for people about rising food prices and overall sustained inflation (even when the fears outstrip the actual numbers), this is quite a disconnect between one in ten Americans and the overwhelming bulk of the population.
How will today's "National Consumer Boycott" register for businesses with these numbers? The proposed twenty-four-hour suspension of consumer spending (except on genuine necessities) across the country at service stations, grocery stores, and shopping at major corporations includes political and economic aims to penalize the corporations supporting DOGE efforts to squeeze the government. I don't know how many people nationally will participate, nor how effective it will be. Still, many supporting the economic strike are more affected by the rising costs in their day-to-day lives than the ten percent able to buy goods so prolifically.
But if financially higher-end households are driving such a significant portion of the spending, will a consumer boycott by hundreds of thousands or perhaps a few million people cut into the bottom line for one twenty-four-hour period? Perhaps, but I am dubious that anything other than a more targeted and sustained spending freeze would dent the incomes of big corporations. Why my doubts?
Bluesky or other social media enthusiasm will motivate the most ardent opponents of the current manipulation of the federal workforce and spending assaults on popular policies. However, the movement would need to be much broader to cut into corporate sales. One of the interesting effects of the Trump election in November has been hearing how many people now ignore the news altogether, except at the broadest level. I am uncertain whether those very folks would even know of the boycott, much less participate.
The symbolism is that the boycott will be powerful, however, if it manifests any substantial (I confess I do not have a number in mind for what bothers big business because I simply don't operate in that galaxy) decrease in revenue. It seems that businesses in the age of mass data track sales details to the umpteenth degree, but we just don't know whether it will occur in practice or fizzle.
Public outrage is not declining, nor will it with the decrease in Members of Congress refraining from meeting constituents (especially Republicans, according to media reports. Last fall, I wrote in this column about the challenges a Republican Congress and White House would confront in cutting federal spending significantly because so many "Red state" districts rely heavily on such money. However, government spending is a nationwide phenomenon, as one should expect from the federal government. The government is not business but addresses popular needs. Republicans counting on this anger burning out are potentially wrong. Still, they assess that any future elections, such as 2026, are far enough to ignore the upheaval in the face of White House pressure to adopt the budget cuts.
Perhaps they don't expect future elections, but the public is as angry as any policy proposals in my lifetime. In truth, this fury is not healthy for business, either, as selective boycotts can affect a localized market. The ire, in short, is worrisome on many levels for anyone, whether it's the dislocated workers, the wholesale undermining of what government does (always wholly different from the role of business in our society), and the repeated rumors that legislative personnel are under threat of violence if they do not conform to these cuts. Again, this last part may only be apocryphal, but this is not how the rule of law operates.
The House of Representatives initiates tax bills, the Senate counters with its proposals, and then the two bodies confer to pass a bill. That bill must garner the President's signature before becoming law. Violence has no place in our system; no more than one branch of government has disproportionate power in any aspect of governing—punto final (call me old school, but I am wedded to the Constitution rather than preferred interpretations). Listening—whether to the public or business or any other financial contributors to the coffers of elected officials in any position—is part of the deal unless we are saying we no longer are a government of the people, by the people, and for the people as Abraham Lincoln so eloquently reminded us in Gettysburg on that cold November afternoon in 1863.
Xi Jinping's China illustrates one example where the public does not top the list of government priorities. The General Secretary has spent over a decade disincentivizing listening to the business concerns about economic reform to promote investment or the public's needs. Xi's China is a government of the CCP, by the CCP, and most definitely for the CCP.
This week, what is attracting some interest is whether Xi's recent reinvigoration of encouragement to reinvest in China is a tactic or a reversal in his efforts to renew the CCP's grip on the reins of power. I put my money on Xi's sweet talk as a tactic, but his words are welcome to many who want to justify investment in China in hopes of expanding market access. The PRC remains a country with an enormous, if declining, population, many of whom have hoarded money for future contingencies. Still, Xi—and business—hopes that saving can fuel consumption as occurs in this country. Consumption could mean increased production, employing more people rather than leaving them disenchanted by the CCP rule.
Xi is also well aware that President Trump intends to impose new tariffs on Chinese goods, and Beijing wants to respond in kind. Increased foreign investment is a hedge against China having fewer options as it navigates the challenges at home of more questions about its economic future and U.S. pressure through tariffs. The General Secretary currently needs business to provide him with options for addressing changing conditions in the future. He is willing to defer his aspiration of Party dominance over all aspects of society for the reprieve of getting investors back, especially in high-tech sectors, which can increase China's autonomy. It's a gamble he will take.
Business questions, in one form or another, consume us this week. Changes are unfolding around the globe, with potential impacts on us as individuals and in the geostrategic context. It's hard to feel overly confident that it will all go well since humans with their innate foibles are involved.
Time will tell the outcome. Actions have consequences, but outcomes are not evident yet.
Thank you for reading Actions today. I appreciate readers any and every day, but especially paying subscribers, as their investment offers me options for broader reading to compose these columns.
Please feel free to challenge, question, rebutt, or endorse the column. I suggest you circulate this piece if you find it valuable.
This afternoon, the Chesapeake light definitely has that spring quality. I hope you have a few minutes outside over the weekend.
Be well and be safe. FIN
Rachel Louise Ensign, “The U.S. Economy Depends More than Ever on Rich People”, WallStreetJournal.org, 24 February 2025, retrieved at https://www.wsj.com/economy/consumers/us-economy-strength-rich-spending-2c34a571?mod=Searchresults_pos1&page=1
Andrew E. Kramer and Constant Meheut, “Draft of Minerals Deal Features Vague Reference to Ukrainian Security”, NewYorkTimes.com, 26 February 2025, retrieved at https://www.nytimes.com/2025/02/26/world/europe/us-ukraine-minerals-deal-security.html
Jakub Kruba, “Zelenskyy Leaving White House Early after furious meeting where Trump says he ‘disrespected US’ and is not ready for peace-live“, TheGuardian.com, 28 February 2025, retrieved at https://www.theguardian.com/world/live/2025/feb/28/volodymyr-zelenskyy-donald-trump-us-minerals-deal-russia-ukraine-live-news
Amanda Mull, “Rich People are Firing a Cash Cannon at the U.S. Economy—but At What Cost?”, Bloomberg.com, 28 February 2025, retrieved at https://www.bloomberg.com/news/articles/2025-02-28/wealthy-americans-fuel-half-of-us-economy-consumer-spending?cmpid=022825_morningamer&utm_medium=email&utm_source=newsletter&utm_term=250228&utm_campaign=morningamer&leadSource=uverify%20wall
Li Yuan, “Is Xi’s Sudden Embrace of Business for Real? China is Left Guessing“, NewYorkTimes.com, 28 February 2025, retrieved at https://www.nytimes.com/2025/02/22/business/xi-jinping-jack-ma.html?searchResultPosition=1