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Your guide to what the 2024 US election means for Washington and the world
The key candidates for Donald Trump’s top team are in some ways like many presidents before him — overwhelmingly male, overwhelmingly wealthy and drawn from the financial services industry.
However, Trump’s nominees differ on one critical issue. They are not mainstream. Notably, the list contains no prominent bankers, breaking with tradition (even with Trump Mk I) where financial appointments are routinely drawn from the likes of Goldman Sachs.
This is true across the board – from vice president-elect JD Vance, venture capitalist and Treasury Secretary nominee Scott Bessant, hedge fund manager, incoming British ambassador Warren Stephenson; An independent investment bankAnd the new ambassador to Turkey, Tom Barak, a private equity and property investor.
Most of Trump’s financial appointees were significant donors to his campaign and/or business partners through his career as a real estate mogul.
The “corruption system” in American politics—an 18th-century tradition that allowed presidents to strengthen their loyalty by appointing friends and family to government roles—was supposedly eliminated in a series of legislative reforms that began in the late 19th century. Century. The incoming president not only adopted the system made famous by the seventh president of the United States, Andrew Jackson, but also did so in a way that created serious financial and political conflicts of interest. It is unclear how effective legal restrictions will be in checking these conflicts.
The interesting reading of Trump’s appointments to date is that these are no-nonsense people who cut through bureaucracy and bring energy to a growth-oriented reform agenda. Elon Musk, the co-head of the so-called Government Efficiency Unit, is at the core of it.
The breadth of Musk’s own business interests makes it difficult to identify all conflicts when dealing with Tesla, SpaceX or X. Another area to look at is Mook’s affinity for finance – he started as a co-founder of PayPal. The fledgling payment platform X Payments has ambitions to become the West’s WeChat and China’s “everything app”. Strong government and regulatory support can give the platform a big boost.
More profound still is how the US official attitude to crypto finance (another of the Musk’s pet topics) looks set to flip. The Securities and Exchange Commission, chaired by Gary Gensler, has taken a decidedly hostile stance: Many issues Charges have been brought against crypto companies for falsifying transaction volumes, registration violations and other offenses in the so-called “washing business” that inflates transaction volumes.
Yet it is Gensler It is ready to be replaced By Paul Atkins, an avid moderator who co-leads the Token Alliance, a crypto lobbying group. Atkins is concerned about several other top candidates for the Trump administration: most notably Howard Lutnick, a vocal crypto advocate, with Strong links with Tether As a business writer; And David Sachs, that’s who Musk’s closest partner And PayPal alums, like White House AI and crypto czars.
On the investment front, Trump has chosen Stephen Feinberg, the co-founder and CEO of Cerberus Capital Management, to be his deputy secretary of defense — opening up another conflict, given Cerberus’ history of investing in defense businesses. Similarly, at the Social Security Administration, electing Frank Bicino to lead payments technology provides both a source of reform and a conflict to manage.
But even if they view the rewards of disruption positively, they are more likely to dominate profit-seekers in these areas.
One of the anomalies is the presence of big banks among Trump’s nominees. They can be famous winners. Watering down Basel III banking regulations could save billions of dollars in capital charges. Excessive increase As savers move their money to larger, safer banks, the federal deposit insurance system may benefit them at the expense of smaller institutions. And any movement to State support for mortgages endsFully privatizing Fannie Mae and Freddie Mac could also be a relative win for the big banks.
Along the way, such revolutionary changes can cause chaos or crisis. That’s probably when Trump felt the need for some more top Wall Street advice.
