Friday, January 6, 2017

Trump Considering Crony Establishment Operative for Treasury Undersecretary

David Malpass, an economic adviser to President-elect Donald Trump is the leading candidate to be named Treasury undersecretary for international affairs, reports The Wall Street Journal.

Malpass, a former chief economist at the collapsed Bear Stearns, also served in the Ronald Reagan and George H.W. Bush administrations.

Notes WSJ, ln this position, which requires Senate confirmation, Malpass would advise the Trump administration on global economic and financial developments, taking the lead on G7 and G20 macroeconomic issues. This appointee has also traditionally overseen trade and investment negotiations involving financial services or capital flows.

Malpass served as deputy assistant Treasury secretary for developing nations in the Reagan administration and then deputy assistant secretary of state for Latin American economic affairs in the George H.W. Bush administration, where he worked on the North American Free Trade Agreement.

For those of you slow on the pick-up, this means he is a total establishment tool.

In a September 1, 2016 op-ed for The New York Times, titled  Why This Economy Needs Donald Trump, Malpass wrote:
Counterproductive federal policies squash small businesses with inane regulatory sprawl that affects hiring, taxes, credit and medical care.

The result is a stagnant economy that leaves out millions of Americans who would like to work and get ahead, and a devastating report card on the Obama White House.

To restart growth, Mr. Trump would immediately lower tax rates, including for middle-income voters, and simplify the tax code. Americans would be able to exempt average child-care expenses from taxes, and Mr. Trump’s administration would eliminate the death tax, which falls especially hard on some small businesses and farmers.

To help create a flood of new business investment and jobs, the Trump plan would reduce corporate tax rates to 15 percent while eliminating or capping many tax deductions. This would simplify the tax system, making us much more competitive with countries and a magnet for new jobs.
All excellent points to raise.

But he is a supply-sider who really isn't concerned with government spending though he does make an obligatory curtesy and mention the large national debt. His view is in supply-sider fashion that the tax cuts will generate more government revenue and solve spending and debt problems. More from the pre-election op-ed:
Mrs. Clinton wants to go in the opposite direction, depressing job growth with an uncompetitive corporate tax rate, higher taxes on estates and short-term capital gains, and a 4 percent surtax on the most successful individuals.
She insists that the Trump plan will cause a bigger deficit and a recession, but she is basing that on her party’s view that tax rates don’t matter much to growth and investment; Mr. Trump knows they do.
 The Moody’s study Mrs. Clinton cites so often says Mr. Trump’s plan would cause higher fiscal deficits but would also create faster growth and a surge in new jobs. It assumes that the Fed would raise interest rates to over 6 percent, causing a recession it attributes to Mr. Trump. A much more likely outcome is faster growth without the spike in interest rates or a recession.
Mr. Trump agrees with those who are concerned about the national debt. He wants to help the private sector to grow faster and to create a debt limit that would rein in our debt-to-G.D.P. ratio, which has skyrocketed under President Obama. 
Critics of tax cuts say the government can’t afford his plan. But what the economy can’t afford is the current inept tax system, slow growth and Mrs. Clinton’s $1.1 trillion in tax hikes.
In other words, he is a perfect establishment crony that Trump can bring in to talk free markets while at the same time he will justify larger government spending.  He's the worst kind of operative that will be circling Trump. He will get Trump fanboys all juiced up about free markets while the opposite occurs and government expands.

In his op-ed, he already started sneaky support for Trump's economically ignorant trade protectionism:
Mr. Trump is proposing to overturn that stagnant, corrupt system. An important part of his transformation is a new trade policy that encourages American jobs rather than undercuts them. His position has been demonized by the press as protectionism, but the reality is that our trade system is broken.  

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