Treasury Secretary Scott Bessent spoke to the Economic Club of New York today and emphasized the growthy-ness of President Trump’s program.
I had a chance to interview the Secretary after his speech. But importantly, Bessent emphasized deregulation, especially in the banking sector – and that includes bank loans to small businesses. This is important because during the Biden years, Fed Chair Jay Powell swayed with the wind and promoted DEI, ESG, no loans to oil and gas companies, terrible supervision of Silicon Valley, and a disregard for the importance of community banks. Powell presided over a real mess.
Incidentally, it looks like Trump-appointee Miki Bowman, who is a member of the Federal Reserve Board, is going to get the nod to become the Fed Vice Chair for bank supervision – and that’s going to be a welcome relief from Jay Powell’s woke policies. Bessent defended President Trump’s campaign to stop unfair trading practices and currency manipulation and intellectual property theft. And incidentally, President Trump himself paused the 25% tariffs on Mexico and Canada and essentially gave the USMCA deal a 30-day reprieve.
But Trump is right about unfair trade. And I spoke with Bessent about this. There is no equivalence between communist China and the United States. And of course, it’s high-time that Trump’s idea of reciprocity is put into place because if the U.S. doesn’t do it, the WTO will never do it. And our heartland industries will continue to suffer.
Trump’s review process is a little disheveled at the moment. But the policy itself is correct. King Dollar will continue to rein, according to Scott Bessent. He’s very pleased that bond rates are coming down. And Bessent is a growth guy. He and I talked at some length about Trump’s tax cut policies where the President wants all of his 2017 extensions, plus no tax on tips, or overtime, or senior benefits. And Bessent reminded me that Trump wants 100% immediate expensing for new factories, as well as machinery and equipment. And it will all be retroactive to January 20.
Afterall, growth is so important. I mentioned that the combination of tax cuts and deregulation and the rest of Trump’s program produces 3% growth over the next 10 years instead of the usual 1.8% CBO baseline. That’s worth $3 trillion more in resources created by the private sector.
And in fact, Scott Bessent often talks about the need to reprivatize the American economy, and thereby ending Joe Biden’s failed big government socialism. The Trump tax cuts should be comprehensive and permanent and scored as current policy, which means deficit neutral. Just like the way CBO scores the current services baseline – where spending increases every year are never repriced.
Bessent also talked about the importance of reducing government jobs and increasing private jobs. And he gave a strong endorsement to the work of Elon Musk’s DOGE downsizing. Mr.Bessent is an elegant, old school, South Carolinian gentleman with a brilliant mind and a tremendous intellectual grasp of the key issues that will fulfill Donald Trump’s mission of a new golden era for America.
