America's CEOs are acting like total cowards when it comes to Donald Trump

When it comes to Donald Trump, only one course of action makes sense: resistance. Opposing the president is no longer the sole domain of elected politicians and cranky activists; everybody is playing their part, with the loudest voices (in places like the entertainment industry, or the press, or the judiciary) being heard loud and clear. All of them face risks, especially the undocumented immigrants who are speaking out, and all of them know what has to be done.

But there’s one group of men (and they’re nearly all men) who have stood out by how quiet they’re being. The CEOs of America’s biggest companies–the people who control the nation’s means of production–are as a group being ruled by fear rather than honor. In person, in private, they might well say more or less the same things about Trump that the rest of us are saying. But in public, they’re much more circumspect.

Ask them what they’re afraid of, and they’ll tell you this: that if they speak out against Trump, he will retaliate in the form of a Mean Tweet, and that in turn Trump’s tweet will hurt their company’s share price. This is a proposition that is almost universally believed to be true within CEO circles; it has even prompted one Google employee to build a stock-trading robot that tries to make money by trading Trump’s tweets and donating the proceeds to Planned Parenthood and the ACLU.

This idea–that Trump is regularly punching companies right in their stock ticker–has pretty much become received wisdom. Gillian Tett, U.S. editor of the Financial Times, has said that Trump’s tweets “can be very damaging to the share price” of named companies, while CNN’s Samuel Burke reports that some West Coast companies are staffing their PR operations at 3 AM, “out of fear that a Trump tweet could crash their stock.” (Never mind that the stock market isn’t even open at 3 AM Pacific time.)

There’s one problem with this theory, however: It doesn’t really stand up to scrutiny.

For one thing, trading Trump’s tweets turns out to be extremely difficult. Consider that stock-trading robot. It started trading–hypothetically–on December 6, when it bet $100,000 on Boeing stock falling in the wake of this tweet. It sold Boeing at $152.16 per share, and then closed out its position at the end of the day, when Boeing was trading at $152.30 per share. That meant it ended up losing just under 1% on the trade. Whoops.

Or consider what happened on February 8, when the robot sold $107,644.65 of hypothetical Nordstrom stock at $42.64 per share, in the wake of this tweet. By the end of the day, when the robot bought its shares back, they were trading at $44.53, meaning it lost $4,736.79 in one day.

Those kind of trades don’t add up to a winning strategy: Overall, the hypothetical portfolio is up 2.9% since December 6, handily underperforming the stock market as a whole, which is up 5.5% over the same period.

And of course the hypothetical portfolio gets results no real-world trader could ever replicate. That’s because the hypothetical bot can see Trump’s tweet and trade on it, in six-figure size, at exactly the price that the stock was trading at before the tweet was published. But in the real world, that’s completely impossible: As soon as the tweet is published, the stock price changes.

The Economist has the chart:

What you’re looking at here is the share price of tweeted stocks in the 100 minutes before and after the tweet. You can see that there is an immediate effect: On average, a Trump tweet will move the stock price about 1% within seconds. And that effect lasts for well over an hour.

But negative tweets don’t move stocks as much as positive tweets do, and after a couple of days the effect of negative Trump tweets seems to be zero. No CEO should care about intraday stock-price moves of 1% or less; their job is to lead the company over the long term.

So why do CEOs worry so much about the effect of a Trump tweet on their share price, if that effect is to all intents and purposes nonexistent? The real answer is that they’re looking for any excuse to keep their mouths shut and their heads down, and this one is as good as any.

CEOs increasingly like to talk about “stakeholders” rather than “shareholders”: They have a responsibility for all manner of individuals who come into contact with their company, from lenders to customers to employees and more. But they talk much less about being stakeholders in society itself.

To be sure, when the government does something that directly threatens a company’s profits, that company will lobby hard and speak out and generally try to oppose the policy. And that’s what we saw in the wake of Trump’s immigration ban, which took aim at one of the key drivers of Silicon Valley prosperity.

On issues of broader national and international interest, however, CEOs prefer to make their views known quietly, in private meetings, rather than taking any kind of public stand.

In normal times, that’s fine. But these are not normal times. If the nation’s resistance is to get heard in the Oval Office, it also needs to reach business-friendly Republicans like Trump’s economic adviser Gary Cohn, as well as elected representatives on Capitol Hill. And while private communications to those people are all well and good, public ones are even better.

CEOs: It’s time to speak up. Standing up and making your voice heard involves risks, of course, but your job is to take risks, and you, like everybody else, must play your part. The future of America is at stake. If you stay quiet now, history will not remember you well.