Financial Policy • Mnuchin Hrg Today (Jan. 19)

The Trump cabinet nominee confirmation hearings are bringing into greater clarity  the policy goals of the incoming administration.   Although the policy focus to this point has been mostly non-economic, that began to change yesterday with the hearing of Commerce Secretary-designate Wilbur Ross.  Today should  provide a still-clearer policy picture when the Senate Finance Committee considers Steven Mnuchin’s nomination for Treasury Secretary.
With close to 24 hours before the Obamas depart 1600 and Donald Trump takes the oath, the new administration’s economic policy goals and timetable remain fluid.  This morning in Senate Finance, some important questions will be asked and maybe answered.  We look at these questions below.
Best,
Dana
________________________________________
Commerce Nominee Wilbur Ross

If the establishment has winced, blanched, or looked through its fingers at the Senate confirmation hearing performance of some Trump cabinet nominees, Wilbur Ross, the President-elect’s pick for Commerce Secretary, must have provided relief.  The bald billionaire told the Senate Committee on Commerce, Science and Transportation this morning “I am not anti-trade. I am pro-trade,” Ross testified.  TPP and NAFTA have flaws, he suggested, but not fatal ones.  Ross, 79, is a former longstanding registered Democrat.

If confirmed — which is a certainty — Ross will loom large in the Trump administration’s infrastructure plans.  During today’s hearing, Ross made it clear that the plan will not consist only of a large tax deduction infrastructure investors.  Instead, it will be an a la carte approach involving a mix of:

•  tax incentives

•  conventional appropriations

•  expanded municipal bond authority

•  Public-Private Partnerships

Treasury Nominee Steve Mnuchin

As the principal economic advisor to the president, the Secretary of the Treasury critically influences economic and financial policy.  As Secretary, Steven Mnuchin would be responsible for  domestic and international financial tax and broader economic policy.  As such, he will craft fiscal policy and manage the public debt, controlling the most powerful set of economic levers outside of the Fed.

Mnuchin is a former partner at Goldman Sachs and has no prior government experience.  As the head of mortgage lender OneWest, Mnuchin profited handsomely from the housing crisis and his firm oversaw foreclosure practices that have been highlighted in paid media.

OneWest is currently under investigation for unfair lending practices. The nominee has not published any work regarding his views on fiscal or monetary policy.

•  Dodd-Frank

For many, the first question is what Mnuchin’s plans are for Dodd-Frank, which Trump has promised to “dismantle.”  Mnuchin expressed the view  last month that federal financial regulatory practices have reduced the flow of capital to small and medium sized businesses because of rules constraining  lenders.  He says his guiding regulatory principle is to make sure the banks lend as freely as possible.  What this means for Dodd-Frank and provisions like the Volcker Rule is a topline question.

The nominee has brushed off his lack of government experience, citing his background in the private sector as sufficient experience.  He has said that he saw first hand the negative effects of Dodd-Frank from the private sector and knows how to fix the problem.  Mnuchin stood to profit from the financial crisis and he did, mainly on foreclosed homes.

A critical question for the nominee relates to the interagency body created by Dodd-Frank and chaired by the Treasury Secretary — the body that designates financial institutions as systemically important and subject to enhanced regulation:   “Do you believe that the Financial Stability Oversight Council (FSOC)  should be retained or abolished?

•  Tax Reform

Mnuchin has suggested that the incoming administration will propose the largest tax reform since the Reagan administration. He has endorsed reducing the top corporate tax rate from 35  to 15 percent, claiming that these cuts would “create huge economic growth” and “huge personal income.”

He has insisted that the administration’s tax cuts will not reduce upper-income taxes and that the overwhelming bulk of tax relief will go to the middle class.  The tax credits that many low and moderate income families earn under the Affordable Care Act would be abolished, ultimately skewing the tax cuts in favor of the wealthiest Americans.

The status of previously published Trump tax plans is uncertain, but per estimates of his latest one, a millionaire would experience a 14 percent tax cut, while middle class families would get not much more than a one percent cut.  This outcome is similar to Paul Ryan’s plan –by design — where taxpayers earning more than $1 million would see an 11 percent increase in income after tax while the bottom 80 percent of taxpayers will receive a cut of 0.5 percent.

Tax progressivity is a bedrock principle as old as the Code itself.  At a time of increasingly economical inequality, a reasonable question about the nominee’s commitment to the principle of progressivity, seeking his assurance that, as you have stated, taxes on the rich will not decrease and that the middle class will benefit from his eventual tax plan?

•  GSE Reform

Mnuchin has said that he will completely privatize Fannie Mae and Freddie Mac “reasonably fast.”  Since the USG took Fannie and Freddie over, the agencies have paid $255.8 billion to the Department of Treasury, making the government investment profitable for taxpayers.  Privatization will be good news for shareholders, but not necessarily all taxpayers.

This begs the question of transition, if Mnuchin still believes in the full privatization of Fannie Mae and Freddie Mac.  What would this mean for their cashflow to the Treasury Department? How will privatization make it easier for borrowers to get mortgages?  Will it increase lending?

A question not to ask the nominee unless you want to adjourn the hearing:  anything to do with Skull and Bones, the Yale secret society whose members by club tradition must, when asked about the society, immediately leave the room.

70 thoughts on “Financial Policy • Mnuchin Hrg Today (Jan. 19)”

  1. Hi there to every body, it’s my first pay a quick visit of
    this webpage; this blog carries awesome and truly fine information designed for visitors.
    asmr 0mniartist

  2. Amazing blog! Do you have any recommendations for
    aspiring writers? I’m hoping to start my own website soon but I’m a little lost on everything.

    Would you suggest starting with a free platform like WordPress or go
    for a paid option? There are so many options out there that
    I’m completely confused .. Any recommendations? Thank you!

    0mniartist asmr

  3. hey there and thank you for your info – I’ve certainly picked up anything
    new from right here. I did however expertise a few technical points using this website,
    as I experienced to reload the website many times previous to I could get it to load correctly.
    I had been wondering if your hosting is OK? Not that I’m complaining, but sluggish loading instances times
    will often affect your placement in google and could damage
    your quality score if advertising and marketing with Adwords.
    Well I am adding this RSS to my e-mail and could look out for much more of your respective
    fascinating content. Ensure that you update this again very soon. asmr 0mniartist

  4. Hello it’s me, I am also visiting this web page on a regular basis, this
    website is in fact good and the visitors are in fact sharing fastidious
    thoughts. 0mniartist asmr

  5. Hey I know this is off topic but I was wondering if you knew of
    any widgets I could add to my blog that automatically tweet my
    newest twitter updates. I’ve been looking for a plug-in like this for quite some time
    and was hoping maybe you would have some experience with something like this.
    Please let me know if you run into anything. I truly enjoy reading your blog and
    I look forward to your new updates.

  6. It is perfect time to make some plans for the future and it is time to be happy.

    I have read this post and if I could I want to suggest you few interesting things or advice.

    Perhaps you could write next articles referring to this article.
    I wish to read even more things about it!

  7. Interesting blog! Is your theme custom made or did you download it from somewhere?

    A design like yours with a few simple tweeks would really
    make my blog stand out. Please let me know where you got your theme.

    Cheers

  8. Greetings I am so grateful I found your blog, I really found you by mistake, while
    I was searching on Bing for something else, Regardless I
    am here now and would just like to say thanks a lot for
    a fantastic post and a all round enjoyable blog (I also love the theme/design), I don’t have time to read it all at the
    moment but I have book-marked it and also included your RSS feeds, so
    when I have time I will be back to read a great deal more, Please do keep up
    the superb jo.

  9. Hello there, I found your web site via Google even as looking for
    a comparable subject, your site got here up, it appears to be like
    good. I have bookmarked it in my google bookmarks.

    Hello there, just become alert to your weblog
    through Google, and located that it is really informative.
    I am gonna be careful for brussels. I will appreciate when you proceed this in future.
    Many other folks can be benefited out of your writing. Cheers!

  10. What’s up friends, how is all, and what you would like to
    say concerning this paragraph, in my view its really
    awesome in favor of me.

  11. magnificent put up, very informative. I ponder
    why the other specialists of this sector do not
    realize this. You should continue your writing. I’m sure, you have a great
    readers’ base already!

  12. Hello, i think that i saw you visited my weblog thus i came to go back the prefer?.I am attempting to to find things to enhance my
    website!I suppose its adequate to use a few of your ideas!!

  13. I know this if off topic but I’m looking into starting my own blog and was wondering what all is needed to get set up?
    I’m assuming having a blog like yours would cost a pretty
    penny? I’m not very internet savvy so I’m not 100% positive.
    Any suggestions or advice would be greatly appreciated.
    Cheers

  14. This design is spectacular! You definitely know how to keep a reader entertained.
    Between your wit and your videos, I was almost moved to start my own blog (well, almost…HaHa!) Excellent job.

    I really loved what you had to say, and more than that, how you
    presented it. Too cool!

  15. Hi to every body, it’s my first pay a quick visit of this webpage; this weblog consists of amazing and in fact good information in support
    of readers.

  16. Hello! I’m at work surfing around your blog from my new apple iphone!

    Just wanted to say I love reading through your blog and look forward
    to all your posts! Carry on the excellent work!

  17. scoliosis
    After I originally commented I seem to have clicked
    on the -Notify me when new comments are added- checkbox and from now on whenever a comment is added I recieve four emails with the same comment.

    Perhaps there is a means you can remove me from that service?
    Many thanks! scoliosis

  18. scoliosis
    I am extremely impressed with your writing skills and also with the layout on your weblog.
    Is this a paid theme or did you modify it yourself?
    Either way keep up the nice quality writing, it’s rare to see a nice blog like this one nowadays.
    scoliosis

  19. scoliosis
    whoah this weblog is magnificent i really like studying your articles.

    Stay up the good work! You already know, many people are looking round for this information, you can help them greatly.

    scoliosis

  20. scoliosis
    Heya just wanted to give you a brief heads up and let you
    know a few of the pictures aren’t loading correctly.
    I’m not sure why but I think its a linking issue. I’ve tried it in two different web browsers and
    both show the same results. scoliosis

  21. free dating sites
    Excellent blog! Do you have any recommendations
    for aspiring writers? I’m planning to start my own blog soon but I’m a little lost on everything.
    Would you recommend starting with a free platform like WordPress or go for a paid option? There are so many
    options out there that I’m completely overwhelmed ..
    Any tips? Thanks! https://785days.tumblr.com/ free dating sites

  22. free dating sites
    Having read this I thought it was very informative.
    I appreciate you finding the time and effort to put this informative article together.

    I once again find myself personally spending way too much
    time both reading and leaving comments. But so what, it was still worth it!
    free dating sites

  23. Hey I am so glad I found your web site, I really found you by mistake, while I was browsing on Askjeeve for something else, Nonetheless I am here now and would
    just like to say cheers for a tremendous post and a all round thrilling blog (I also love the theme/design), I
    don’t have time to read it all at the minute but I have bookmarked it and also added in your RSS feeds, so when I have time I will be back to read a great deal more, Please do keep up the excellent work.

  24. Asking questions are truly good thing if you are
    not understanding something totally, except this piece of writing offers fastidious understanding
    even.

  25. Nice weblog here! Also your website a lot up very fast!

    What host are you the usage of? Can I am getting your associate link
    to your host? I desire my site loaded up as quickly as yours lol

  26. Do you have a spam issue on this site; I also am a blogger, and I was curious about your situation; we have created
    some nice methods and we are looking to exchange
    strategies with other folks, be sure to shoot me an email if interested.

  27. We are a group of volunteers and starting a new scheme in our community.
    Your website offered us with valuable information to work on. You’ve done an impressive activity and our whole neighborhood can be
    grateful to you.

  28. Hello, i think that i noticed you visited my blog so i got here to return the choose?.I’m trying to to find issues to enhance my web site!I assume its ok to
    use some of your concepts!!

  29. Hello, Neat post. There’s an issue with your site in web explorer,
    might check this? IE nonetheless is the market chief and a big portion of folks will omit your great
    writing due to this problem.

  30. Right here is the right blog for everyone who wishes to find out about this topic.
    You realize so much its almost tough to argue with
    you (not that I personally will need to…HaHa).
    You certainly put a fresh spin on a subject that’s been written about for many years.
    Wonderful stuff, just great!

  31. This design is steller! You obviously know how to keep
    a reader amused. Between your wit and your videos, I was almost moved to start my own blog (well,
    almost…HaHa!) Fantastic job. I really loved what you had to say,
    and more than that, how you presented it. Too cool!

  32. I think that everything published was very logical.
    But, think about this, what if you wrote a catchier title?

    I mean, I don’t want to tell you how to run your blog, but suppose you added something
    that grabbed a person’s attention? I mean Financial Policy • Mnuchin Hrg Today (Jan. 19) is a little vanilla.

    You might glance at Yahoo’s home page and note how they
    create article headlines to grab people to click.
    You might try adding a video or a picture or two to get
    readers excited about what you’ve got to say.

    In my opinion, it might make your posts a little livelier.

  33. I know this site presents quality based articles and extra data, is there any other web page which
    presents such data in quality?

  34. Pingback: keto diet menu for beginners

  35. I’m truly enjoying the design and layout of your blog.
    It’s a very easy on the eyes which makes it much
    more enjoyable for me to come here and visit more often. Did you hire out
    a designer to create your theme? Outstanding work!

  36. Hmm it appears like your website ate my first comment (it was super long) so I guess I’ll just sum it up what I
    wrote and say, I’m thoroughly enjoying your blog. I as well am an aspiring blog
    writer but I’m still new to everything. Do you have any helpful hints for newbie blog writers?

    I’d genuinely appreciate it.

  37. Wow, incredible blog layout! How lengthy have you ever been blogging
    for? you make running a blog glance easy. The full look
    of your site is wonderful, as smartly as the
    content!

  38. Hello my loved one! I want to say that this article
    is awesome, great written and include almost all vital infos.

    I’d like to look more posts like this .

Leave a Comment

Your email address will not be published. Required fields are marked *