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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
Elon Musk wants Trump to disrupt Wall Street with his Treasury pick
By David Goldman, Kayla Tausche, Elisabeth Buchwald and Tami Luhby, CNN
Updated:
5:40 PM EST, Sat November 16, 2024
Source: CNN
As Donald Trump privately considers his team to lead America’s
economy during his term, Elon Musk has put his thumb on the scale,
urging followers on X to help make a public push for a candidate who
won’t be “business as usual” on Wall Street.
Musk, a Trump ally who has gained significant influence in the
formation of Trump’s incoming administration, posted on X Saturday
that he wants Howard Lutnick, a staunch Trump supporter who runs
investment bank Cantor Fitzgerald, to serve as the next Treasury
secretary.
Scott Bessent, the founder of capital management firm Key Square, has
been widely viewed as the frontrunner for the job.
“My view fwiw is that Bessent is a business-as-usual choice, whereas
will actually enact change,” Musk Saturday. “Business-as-usual is
driving America bankrupt, so we need change one way or another.”
Musk urged his followers to “weigh in on this for to consider
feedback.”
Both Bessent and Lutnick are respected on Wall Street and have publicly
supported Trump and his economic policies — including massive and
unprecedented tariffs that remain largely unpopular among mainstream
economists. Both also have embraced cryptocurrencies, which Trump has
backed in recent months despite initial skepticism.
But Lutnick, a leader of Trump’s transition team, demonstrates a
personality that is somewhat more forceful and boasting than Bessent,
whose demeanor is perhaps more typical of a Treasury secretary — a
position that often plays a calming role for Wall Street during times
of economic or market turmoil.
For example, Bessent on Friday in support of Trump’s policy, saying,
“Tariffs are a means to finally stand up for Americans.” Lutnick,
by contrast, spoke at Trump’s controversial pre-election Madison
Square Garden rally, exclaiming: “When was America great? … 125
years ago. We had no income tax, and all we had was tariffs.”
That’s why some Wall Street titans are trying to push for Bessent.
Kyle Bass, a billionaire hedge fund investor at Hayman Capital
Management, said Lutnick doesn’t have the composition to lead the
Treasury.
“Scott Bessent is eminently more qualified than Howard Lutnick to run
the U.S. Treasury,” Bass . “Scott understands markets, economics,
people, and geopolitics better than anyone I’ve ever interacted with.
Markets have already anticipated a Bessent choice. Lutnick is not
Trump’s answer.”
Agreeing with Bass, Third Point’s Dan Loeb : “Right now the only
thing that matters is the President’s choice for this important
position,” noting the Treasury secretary will help determine how much
America’s economy grows by giving investors confidence about
inflation and markets.
But style aside, market analysts say Trump has made clear his intention
to impose widespread tariffs, and the person occupying the Treasury
secretary office probably won’t make much of a difference other than,
perhaps, the speed at which they get enacted.
“The fact is that if Trump wants tariffs, he’s going to get tariffs
regardless of who’s in charge at Treasury or USTR or anywhere
else,” said Scott Lincicome, vice president of general economics and
trade at the libertarian-leaning Cato Institute. “There’s plenty of
levers he can use, and I wouldn’t really expect a huge difference
there.”
If Trump’s plans to impose , deport millions of undocumented workers
and potentially influence the Federal Reserve get put in place, the
next Treasury secretary may need to contend with another inflation
crisis. Those policies would weaken growth, boost inflation and lower
employment, according to a released by the Peterson Institute for
International Economics. Inflation would climb to at least 6% by 2026,
and by 2028, consumer prices would be 20% higher, the researchers
found.
Both Lutnick and Bessent have been skeptical of mainstream
economists’ predictions that Trump’s policies would be
inflationary.
Trump’s decision-making process
Treasury secretary contenders have spent the past week in
behind-the-scenes maneuvering to secure the marquee economic role.
Late last week, Trump had reached a near-final decision to hand the
role to Bessent, a relatively recent MAGA convert, a decision some
officials involved in the transition began to message to outside
allies. At that point, Lutnick waged an aggressive, eleventh-hour
campaign to position himself for the job. Four people familiar with the
dynamic tell CNN that Lutnick sought to convince Trump that only he
would be in full support of the steep tariffs Trump had pledged — and
which Lutnick had been promoting in cable television appearances.
As the competition intensified — with Bessent described as taking a
more back-seat approach to Lutnick’s semi-public campaign —
frustration grew palpable among Trump and his team.
“He’s following the Cheney model,” one person said of Lutnick —
not favorably — referring to Dick Cheney’s job heading up George W.
Bush’s vice-presidential selection committee before landing the job
himself.
Trump even mused that he ought to rule out both of them and pick a
neutral party: Tennessee Sen. Bill Hagerty had interviewed the prior
weekend for a variety of administration jobs, and Larry Kudlow, a Trump
loyalist, would be seen as a market- and tax-friendly pick.
But Kudlow, 77, informed the Trump team that he will not be returning
to government, in part to preserve his health, according to sources
familiar with the conversations. In June 2018, while serving as
Trump’s director of the National Economic Council, Kudlow suffered a
mild heart attack and was hospitalized. In addition to a leadership
role at the America First Policy Institute, an outside group that has
helped develop Trump’s agenda, he currently hosts a show on Fox
Business where members of Trump’s orbit often appear to promote it.
A full week after appearing to decide on nominating Bessent, Trump
interviewed him again at Mar-a-Lago.
What the Treasury secretary does
Regardless of party affiliation, Treasury secretaries historically have
espoused policies that strengthen the US dollar, promote economic
growth, signal stability to the stock and bond markets, and seek to
maintain stability of the tax base, revenue from which flows into
Treasury’s coffers to fund the operations of the federal government.
A key Cabinet player, the Treasury secretary advises the president on
economic and fiscal matters, including spending and taxes.
The role will be especially important in the coming Trump
administration considering the president-elect’s campaign promises to
of either 10% or 20% on every import coming into the United States,
as well as a tariff upward of 60% on all Chinese imports.
Also, the incoming secretary will quickly have to deal with making sure
the nation doesn’t default on its obligations once the debt ceiling
returns in early January, unless Congress addresses the cap before
that. Plus, the secretary will work with Trump and congressional
Republicans to extend the more than $4 trillion in that expire at the
end of 2025.
And all that’s in addition to the overseeing the Treasury Department,
which pays trillions of dollars in bills, collects taxes, sells US debt
securities to investors and serves as a regulator of the banking and
finance industries. The secretary also serves as the nation’s finance
minister on the global stage.
During his first term, Trump chose , a financier and Hollywood producer
who stayed in the administration all four years. Mnuchin, who had no
government experience before taking the Treasury post, had also served
as finance chairman of Trump’s 2016 presidential campaign. He worked
on and helped implement the 2017 tax cuts law and some of the key ,
including the that were distributed to millions of Americans, among
other initiatives.
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