While You Were Working - August 21
Bonnie Tyler began cashing some big royalty checks
Turn around, bright eyes.
Mnuchin keeps chugging along
Perhaps more than any other member of President Trump’s Cabinet, Treasury Secretary Steve Mnuchin has done a heck of a job of ignoring all the noise that comes out of the White House and just remained focused on the economic tasks that lie in front of him.
When I saw Mnuchin at the Milken Institute Global Conference earlier this year, I was struck by how relaxed he seemed to be. Pundits chalked it up to him being back in his former home town of Los Angeles, but now I reckon it was more than that. The actions of the Treasury Department spent a good chunk of the last decade living on the front page of many a newspaper. Mnuchin now knows that the louder the noise gets coming out of the White House, the more cover his department will have to get things done. And make no mistake, the Treasury Department is getting things done.
Mnuchin’s focus has been fantastic. I just wonder what will happen if raising the debt ceiling becomes less of a slam dunk and more of a political circus in Washington. Mnuchin will be front-and-center. Will he keep his cool? And will he want to stick around to clean up the mess if the country actually defaults on its debt?
De-legitimizing the Fed
The idea of the Federal Reserve becoming an arm of the president – any president – or a political party – any party - is truly frightening. I don’t know if all those people calling for the Fed to be reined in truly understand the history of central banks that act on the whim of political leaders. Those leaders are often dictators lording over banana republics.
I happen to think Gary Cohn is the frontrunner to succeed Janet Yellen at the helm of the Federal Reserve. It would certainly make sense that the promise of that gig is what helped Trump lure Cohn away from Goldman Sachs in the first place. Would Cohn be a good Fed chair or a bad Fed chair? I don’t know. But he would be a Democrat working for a Republican president. That doesn’t mean he’ll be totally independent, but I doubt he would be a puppet.
Ray Dalio on threats to American democracy
If you can’t tell already, I am a big fan of CEOs speaking their minds about topics beyond the scope of their commercial interests. It doesn’t matter if I agree with what the CEO is saying, I just want more of them to have the courage to say something. Anything.
That’s why I love what Bridgewater boss Ray Dalio posted on LinkedIn today. He mentions President Trump via the inclusion of some polling data, but doesn’t take any direct shots at Trump. Instead, he worries about the strains currently being placed on the fabric of American democracy:
“History has shown that democracies are healthy when the principles that bind people are stronger than those that divide them, when the rule of law governs disputes, and when compromises are made for the good of the whole—and that democracies are threatened when the principles that divide people are more strongly held than those that bind them and when divided people are more inclined to fight than work to resolve their differences. Conflicts have now intensified to the point that fighting to the death is probably more likely than reconciliation.”
Heavy stuff. And I am not gonna say Dalio is wrong. In fact, he seems to have penned the thoughts a lot of people across the political spectrum have been feeling.
Do you work in commodities? Apparently Goldman Sachs is hiring.
It’s that time of year again. The world’s central bankers are heading to Jackson Hole.
JPMorgan shows up late to the social justice party. Better late than never.