Trump’s cabinet appointments are a bitch slap to the face of the State

American democracy allows entrepreneurs and traders to balance the power held by the “strongman” or “the State” against the power held by the masses. Entrepreneurs and traders want as much unimpeded access to capital that the United States has to offer so that it can convert that capital into goods and services that eventually are traded for compensation.

Entrepreneurs and traders want the masses to have enough power to keep the strongman in check. This power is mostly held in the license to vote issued, ironically, by the strongman. Government, on the other hand, should have enough police power to minimize the ability of the masses to disturb the flow of commerce while limiting their access to capital. One sign of balance is where entrepreneurs and traders see growth in the returns on and return of capital.

For over a decade now, entrepreneurs and traders have been wary of the United States as a place for capital accumulation or growth given the amount of cash being stashed overseas versus reinvested in the U.S.  According to CNBC.com, the equivalent of 14% of the gross domestic product of the United States is being held overseas.  That amounts to approximately $2.5 trillion and as this amount continues to grow their appears to be no sound initiative in sight for bringing the loot back to American shores.

The CNBC.com article does go on to point out that even if tax policies are changed such that the $2 trillion is repatriated back to the United States, the money would join another $7 trillion of domestic cash sitting in U.S. banks, other money accounts, or the Federal Reserve not being put into productive use.

With bond yields rising this appears to be the time to take advantage of the perceived “Trump Effect” and bring the moolah back home to be plowed into the economy. What is needed is a change in political institutional mentality to make this happen. A small step taken toward that change in mentality appears to be in President-elect Trump’s choices for a number of his cabinet positions.

For example, Mr Trump has selected billionaire Wilbur Ross to head the U.S. Department of Commerce; and ExxonMobil chief executive officer Rex Tillerson to take charge of the U.S. Department of State. Left wing media, mouthpieces for the political wealth class, have been stirring up the pot about Mr Trump’s preference for rich white men at the helm of government.

Salon.com took issue with Mr Trump’s choice of Mr Tillerson, arguing that Mr Tillerson was too cozy with Vladimir Putin, president of Russia. Mr Ross found himself a target of the “He’s got ties to Russia” media messaging when DailyKos.com called out Mr Trump for selecting an American billionaire with ties to a billionaire member of the Russian oligarchy.

Those of us with gray hair, an inability to grow an Afro, or both remember the term “linkages” that Ronald Reagan enjoyed throwing around when he felt like dropping a bomb on someone (in his case Libyan president Ghaddafi). I always thought the linkages were weak in the 1980s and the ties today in 2016 are just as tenuous.

What we are seeing here is the left wing of the political wealth class not taking a liking to the strong man being pushed aside by the entrepreneurs and the traders. Entrepreneurs and traders have a “Kill what we eat, eat what we kill” mentality. It’s one that cuts to the bottom line driven by data, logic, and pragmatism. It should come as no surprise that a man who prides himself on making deals would pick private sector men whose living depends on the best deals they can make for their shareholders and themselves.

While there is bi-partisan consensus on the issue of bringing $2 trillion of capital back to the U.S., the left wind media overlooks that it is the political wealth class, that group of people with government experience, that have failed to create an action plan that persuades firms like Apple and Microsoft to treat their cash like prodigal sons and have it return home.

It is ironic that tech companies, along with pharmaceuticals, account for the firms with the highest proportion of cash overseas. Silicon Valley, notorious for its support of Hillary Clinton and other progressives, interestingly enough sent some of their biggest heads to meet with Mr Trump at his tech summit. Pragmatism attracts, no matter the political polarity. And it’s good to see the entrepreneurs in charge for a change.

 

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in business, capital, commerce, Donald Trump, Economy, entrepreneur, Political Economy, technology and tagged , , , . Bookmark the permalink.

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