Treasury Secretary (and human-turtle hybrid) Steve Mnuchin is a guy who wants his Yale classmates to know that he doesn’t work for a Nazi sympathizer.
He’s also a man who is going to weaponize the stock market in order to brow-beat Congress into passing a tax plan that benefits people like him.
Here’s what he told Politico in the first episode of what, in retrospect, will almost surely be seen as an ill-conceived series of podcasts called “Politico Money“:
There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done. To the extent we get the tax deal done, the stock market will go up higher. But there’s no question in my mind that if we don’t get it done you’re going to see a reversal of a significant amount of these gains.
Ok, so first of all, that’s probably true. The original “Trump bump” and its short-lived sequel (which both included notable rotations within equities, a run up in yields, and a dollar rally) were at least partially attributable to optimism on tax reform.
But the problem with Mnuchin’s comment is that he’s effectively piggybacking off Trump’s tweets about the stock market. All Trump has left in terms of things he can point to for evidence of “success” are record stock prices and his tweets have made working class people i) care about stock prices, and ii) believe that the rally is attributable to him.
So what Steve is doing is telling those same working class people that if tax reform doesn’t get done and stocks crash, they have Congress to blame. That move is a rather transparent attempt to blackmail lawmakers. Now, they’re in a position where if their constituents’ 401ks take a hit on tax reform failure, they’ll be blamed. Of course those would be the same constituents who, for the most part, will not benefit from the administration’s tax plan.
And the ultimate middle finger to the middle class here is that the people who benefit the most from higher prices for financial assets like stocks are the people in whose hands those assets are concentrated – people like Steve Mnuchin and of course his trophy wife. Those would be the same people who also benefit from the tax plan.
How fun is that, right?
Maybe Steve is just trying to make sure we can get the national debt down.
He’s a schmuck but he’s probably right. Know what else? Even if it does pass, it could be a case of sell the news.
yeah, definitely. for once I agree completely with one of your comments. 🙂
Either way, It’s likely headed for at least a period of consolidation.
I seem to recall a similar weaponization in the fall of ’08…
Mnuchin’s comment can also be seen as another strategic and ground-laying effort to create another point of blame to attribute to the current dysfunctional Republican Party and its incompetent leadership. This blame – for the purpose of either completely fracturing and over-throwing the existing Republican Party. Amplifying the existing fractures between fiscal conservatives/moderate social conservatives, and the extreme far right and alt right Fourth Reich conservatives.
Currently there seems to be a dysfunctional tie between the respective fractured R Party camps – even with a majority in Congress they get nothing accomplished. Not necessarily a bad thing. However, the 2016 election results are indicative of the potential for a far right/alt right domination of the Republican Party. A lower probability outcome of the R Party fractures would be the creating of a new alt right conservative third Party by blaming the current legislative and agenda failings on the moderate wings of the R Party insisting that the only way forward for the far right – is as a separate US registered political Party. The outcome of this conflict might invigorate passive, educated, lazy, liberal leaning Democrats to actually vote, but it might also siphon off and convert right leading Independents to a far right identifiable Republican faction and or a now separate far/alt right party.
In any case, American political demographic landscapes have changed from a simple and relatively homogeneous two party system, to a more multi-faceted and significantly identifiable division within the parties of the former two party system, but most especially in the Republican Party. It is clear that our two party system is continuing to change, but the degree of which is unclear if not simply unknowable at present.
This changing by enlarge is due to the inability of voters to get accurate information – coupled with the average voter’s lack of developed critical thinking ability to separate the “truth” from the oceans of inaccurate and or manipulated digital information/noise. Much of the this political noise is circumstantial. A result of the evolving digital information in age and the competitive and the concomitant growing monetized for-profit industrial politics that we currently experience. Add to this circumstantial political noise, some serious strategic efforts of foreign influence, subterfuge, outright espionage, possibly treason by US politicians and the possibility of a US Democracy as we once knew it – no longer exists. Regardless of what source the disinformation – voters are constantly bombarded with it – confusing their ability to see and understand their candidates personal backgrounds, proven professional abilities, financial ties and motivations, and the collective implications of what a candidate’s election might lead to.
I am not at all sure that most people see, understand, and or are ready for the changes to the culture of the United States that the middle age and older of us have known. Especially regarding the changes that have taken place recently and that are continuing to take place around us. I think the younger you are, the less ability you have to see these change due to the inherent limits of your age experiences to allow you to observe and compare. None of us have an accurate grasp of the life and culture before our own ages of awareness. Fortunately or unfortunately, for the more mature of us, the human mind has evolved to round off the sharp and painful facts of our past – many of us remember only the best – and distorted “good old days.” While change is unavoidable, the directions of that change are up to all of us. We decide the direction that will be good for the majority of us – or bad. Ultimately we should all decide these directions of change – by acquiring and using our best critical thinking processes.
PLEEEASE pass the Tax Plan! I’ll know exactly where to SHORT this sh*t-show… Total capitulation here we come.
First, capitulation must finish on the upside. And calling a final top will be a fool’s errand as usual imho
@ Durwood M. Dugger
I appreciate your well thought out comments. I encourage you to continue your thinking and perhaps submit opinion pieces. Read please share…
Based on how you are thinking where does it leave us…. and where does it leave other democracies (as an example the German public seems to be reasoning better)
@IRB @Broody
If we pass this tax plan – the societal costs for the US are huge. Are you sure you really want that?
If 2/3 rds of the US economy is based upon spending – and if only 1/2 can spend (once services and SSN are dropped)….