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Your guide to what the 2024 US elections mean for Washington and the world
The key nominations for Donald Trump's top team are in some ways similar to those of many presidents before him — overwhelmingly male, overwhelmingly wealthy, and drawn heavily from the financial services industry.
However, Trump's nominees differ in one important respect. They are not mainstream. In particular, the list does not contain prominent bankers, which breaks with the tradition (even championed by Trump MK I) that financiers' appointments are usually drawn from the likes of Goldman Sachs.
This applies to everyone – from Vice President-elect J.D. Vance, the venture capitalist, and Treasury Secretary nominee Scott Besent, the hedge fund manager, to incoming UK Ambassador Warren Stevens, an entrepreneur. Self-made investment bankerThe new Turkish ambassador is Tom Barrack, a private equity and real estate investor.
Most of Trump's appointed financiers were significant campaign donors and/or business partners during his career as a real estate mogul.
The “spoils system” in American politics—an 18th-century tradition that allowed presidents to cement their loyalty by appointing friends and family to government positions—was supposed to be eliminated through a series of legislative reforms beginning in the late 19th century. century. Not only did the next president embrace the system made famous by Andrew Jackson, the seventh president of the United States, but he did so in a way that would create a massive financial and political conflict of interest. It is unclear how effective legal restrictions are in checking these conflicts.
The optimistic reading of Trump's appointments so far is that these are serious people who will cut through bureaucracy and bring energy to a growth-focused reform agenda. Elon Musk, the co-head of the so-called Government Efficiency Administration, is its main embodiment.
The breadth of Musk's business interests makes it difficult to pinpoint all the conflicts related to Tesla, SpaceX, or X Payments, its emerging payments platform, has ambitions to become the West's WeChat and emulate the massive success of China's “everything app.” Strong government and regulatory support could give the platform a big boost.
Even more profound is how official US attitudes towards cryptocurrency finance are (another example). Pet musk topics) seems to be set the opposite. Under Gary Gensler's leadership, the SEC has taken an openly hostile stance: Multiple cases Cryptocurrency companies have been sued for fraud, so-called “wash trading” that inflates transaction volumes, registration violations, and other misconduct.
However, so is Gensler Set to be replaced Written by Paul Atkins, a deregulation advocate who co-chairs the Token Alliance, a cryptocurrency lobby group. Atkins will be supported by a number of other top Trump administration nominees: most notably Howard Lutnick, an outspoken crypto advocate, with Strong links to Tether As Minister of Commerce. And David Sachs, who is A close ally of Musk and his fellow PayPal alumni, dubbed the White House's AI and cryptocurrency czar.
On the investment front, Trump picked Steven Feinberg, co-founder and co-CEO of Cerberus Capital Management, as deputy defense secretary — opening up another potential conflict, given Cerberus' history of investing in defense businesses. Likewise at the Social Security Administration, the selection of Frank Bisignano, head of payments technology, to be in charge represents both a source of reform and a conflict that must be managed.
No matter how positive your view of the potential rewards of disruption, the risk of putting special interests in charge of such areas remains great.
One development is that although big bankers are absent among Trump's nominees, big banks are They can be outstanding winners. Easing so-called Basel III banking regulations could save billions of dollars in capital charges. repair The Federal Deposit Insurance System is likely to benefit them, at the expense of smaller institutions, as savers move their money to larger, safer banks. And any movement towards it Final state support for real estate loansIt is also possible that, through the full privatization of Fannie Mae and Freddie Mac, this would be a relative win for the larger banks.
Along the way, such revolutionary changes can lead to unrest or crisis. This may be the moment when Trump feels the need for more mainstream Wall Street advice.
