Tuesday, January 10, 2017

Mike Lofgren — Wall Street’s Win-Win with Trump

… the commanding heights of capital are no longer sitting on their hands.
As a glance at the membership of the President-elect’s Strategic and Policy Forumshows, they are flocking to his side, with representatives of financial buccaneering like Steven Schwarzman of the Blackstone Group and Jamie Dimon of JPMorgan Chase, old smokestack firms like GM’s Mary Barra, and towering retail giant Walmart’s Doug McMillon. There is even an ex-governor of the Federal Reserve Board, Bush appointee Kevin Warsh. It appears that Corporate America has abruptly swung to Trump’s side. 
Why the change? First, beyond whatever innate skill at making money that they may possess, the typical American corporate executive smells power in the way a pig locks on to a Périgord truffle. It was only a couple of months ago that virtually none of the corporate moguls supported Trump, while they fell all over themselves to back Hillary Clinton. Now, I doubt many of them would take her phone call. Sucking up is so ingrained in American corporate culture that we should hardly be surprised at the about-face. 
Second, regardless of their pious rhetoric about fiscal responsibility, business leaders dearly love the deficits created by rate cuts on income, capital gains, and dividends. The tax cuts put money directly into their coffers, and the resulting deficit provides the fiscal stimulus driving consumer spending and corporate profits. Occasionally, a few of them, like Pete Peterson (ironically a co-founder of Schwarzman’s Blackstone Group), will launch a rhetorical jihad against the federal deficit, but this effort is mainly a rationale to cut the federal pensions and benefits that they assume the Ninety-Nine Percent are lazily wallowing in rather than working. 
That is not the end of Trump’s fiscal stimulus. In addition to his $6.2 trillion in planned tax cuts, he is promising a large infrastructure program as well as hefty increases in Pentagon spending (the one Keynesian measure Republicans have traditionally adored)....
Translated from the Bloombergese, it suggests the plutocrats are licking their chops in the expectation of a looting spree that will make the plutocracy of Ferdinand and Imelda Marcos look like strict Swiss governmental administration.
Pigs inevitably gather at the trough.

Consortium News
Wall Street’s Win-Win with Trump
Mike Lofgren, former career congressional staff member who served on the House and Senate budget committees

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