How Trump could break from the Fed’s independence

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PALO ALTO, Calif. — President Donald Trump does not really view the Federal Reserve as an independent agency intended to be outside his ability to control, a onetime candidate for the top job at the world’s most powerful central bank said.

Kevin Warsh, a former Fed governor who was on the final short list for the top job at the Fed, said in the latest POLITICO Money podcast that Trump — during an hourlong Oval Office interview last year — appeared to want to know exactly what Warsh would do on interest rates and seemed not to care about the Fed’s historical independence.

“If you think it was a subject upon which he delicately danced around, then you’d be mistaken. It was certainly top of mind to the president,” Warsh said about Trump’s questioning on interest-rate policy. Continue reading “How Trump could break from the Fed’s independence”

Morning Money at the Milken Institute Global Conference: Wrapping up in Los Angeles

WRAPPING UP IN LOS ANGELES — The sun finally broke through on the final day of the Milken Institute Global Conference in Los Angeles, allowing attendees to sun themselves in the Wilshire Garden at the Beverly Hilton in the morning and watch on the big screen as Dr. Vivienne Ming — a self-described “mad scientist” — blew everyone’s minds with talk about the rise of neuroprosthetics and wonder drugs that in just a matter of years could produce super-smart humans with better working memories and turn negative experiences into positive ones inside your head.

Forget worrying about artificial intelligence, Ming warned; worry about potential divides between those able to afford super-brains and those who can’t. It was enough to make those of us gorging on avocado toast in the garden stop for a minute and think … maybe we could turn all this in a Tom Cruise vehicle? Or Continue reading “Morning Money at the Milken Institute Global Conference: Wrapping up in Los Angeles”

From weird and wonky to glitz and glamour: Inside L.A.’s Milken conference

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The latest POLITICO Money podcast examines what it’s like to be at the Milken Institute Global Conference at the Beverly Hilton hotel in Los Angeles.

The event featured top financiers, senior members of the Trump administration, sports stars like Tom Brady and Alex Rodriguez and celebrities like Goldie Hawn and Tyler Perry.

It’s a mix of serious policy talk and transcendental meditation sessions. The podcast also includes an interview with John Carney, who talks about what it’s like being Breitbart’s finance editor at a very globalist-friendly conference.

Morning Money at the Milken Institute Global Conference: Getting mindful in LA

MILKEN GETS MINDFUL — There was plenty more high-level talk about the economy and trade and investing and North Korea and Africa and higher education today at the Milken Institute Global Conference in Los Angeles. And we will bring you some of it below. But there was also time to chill out, get groovy and meditate with Goldie Hawn and to talk about how to be a man in 2018 with baseball legend Alex Rodriguez.

Your MM at Milken host got a chance to ask A-Rod about his humbling experience finally having to admit to steroid use and accept a one-year ban from Major League Baseball. The context of my question was what Rodriguez’s experience could teach men about owning up to mistakes (though in his case it took quite a long time), admitting vulnerabilities and asking for forgiveness. These things are not always our strong suits.

A-Rod talked about Continue reading “Morning Money at the Milken Institute Global Conference: Getting mindful in LA”

Morning Money at the Milken Institute Global Conference: Animal spirits take over on Day One

MILKEN MOMENTS — One of the best spots to be at the Milken Institute Global Conference at the Beverly Hilton in Los Angeles is the speaker ready room, where many of the big names gather at once in a tiny space. This afternoon, you could find Tyler Perry deep in conversation with Gayle King as Dr. Oz got mic’d up for a session on healthful food.

Just prior to that you could catch Tom Brady schmoozing with House Majority Leader Kevin McCarthy and broadcaster Jim Gray as captured by McCarthy’s Instagram account. At least we THINK that’s the speaker ready room. If it’s not, well, the speaker ready room is still the place to hang if you’ve got the right credentials.

Also walking the grounds today: Former Yankee slugger Alex Rodriguez, who did not respond when POLITICO’s Brad Dayspring (like your columnist a giant Yankees fan) greeted him in Continue reading “Morning Money at the Milken Institute Global Conference: Animal spirits take over on Day One”

How low can unemployment go?

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The jobless rate in the United States is just 4.1 percent, but the nation remains well short of a fully healthy economy, according to the former head of the Bureau of Labor Statistics.

In the latest edition of the POLITICO Money podcast, former BLS Commissioner Erica Groshen argues that the very low headline number masks some persistent weaknesses.

“The danger is that the job market might become a source of inflation for the rest of the economy, but we actually haven’t seen that for a very long time,” said Groshen, who led the Labor Department agency from 2013 to 2017 and is now a visiting senior scholar at Cornell University.

“In fact, wage growth has been growing far below productivity since the mid-1970s. So while the rate itself is quite low, we see elevated signs Continue reading “How low can unemployment go?”

America’s divide ‘as significant as when we had slave states,’ Hickenlooper says

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Colorado’s Democratic governor, John Hickenlooper, sure sounds like a man running for president.

In the latest POLITICO Money podcast, Hickenlooper, a term-limited moderate, discussed his recent visit to the first-in-the-nation caucus state of Iowa as well as his vision for fixing American’s polarized politics. “We are seeing a divide in this country that is as significant as when we had slave states and anti-slavery states,” Hickenlooper said. “This rural-urban divide, people in rural areas of Colorado and across the country feel like the urban areas have just left them behind and don’t care.”

Hickenlooper described a broad-based approach to addressing this problem, including infrastructure projects to bring broadband to everyone and skills-training programs short of four-year college degrees that would better prepare workers for jobs in clean technology and other burgeoning industries. And he suggested Continue reading “America’s divide ‘as significant as when we had slave states,’ Hickenlooper says”

Trump to nominate ex-banker Muzinich to top Treasury role

President Donald Trump plans to nominate former Wall Street banker Justin Muzinich to be deputy secretary of the Treasury, a person familiar with the matter said.

Muzinich, currently a counselor to Treasury Secretary Steven Mnuchin, would formally take on the No. 2 role if he is confirmed by the Senate. Initially, Mnuchin appeared unlikely to select a deputy after a pair of candidates did not work out.

Brian Brooks, a former Mnuchin colleague at OneWest Financial who is now at Fannie Mae, withdrew his name from consideration late last year. And Mnuchin’s initial selection, Goldman Sachs banker Jim Donovan, withdrew over family concerns.

After Brooks withdrew, a Treasury spokesman said the department had enough full-time staff and that Mnuchin would not fill the deputy role. But Mnuchin later changed his mind, a person familiar with the matter said, deciding he needed a full-time deputy to run the department day-to-day while Continue reading “Trump to nominate ex-banker Muzinich to top Treasury role”

Facebook critic: Greed led to company meltdown

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Facebook is confronting an existential crisis on a global scale that threatens the long-term viability of the company, according to the author of a book on the social networking giant.

“The reality is that Facebook is threatening global democracy. It’s a threat to liberal democracy on a global scale,” David Kirkpatrick, author of “The Facebook Effect,” said in the latest edition of POLITICO Money.

The book dives into problems roiling the company, including the disclosure that political consulting firm Cambridge Analytica, which had ties to Donald Trump’s presidential campaign, accessed the private data of 50 million Facebook users.

“Facebook has been swimming in so much dough that they came to live on their own fumes,” Kirkpatrick said. “They were more interested in growing their extraordinarily, unprecedentedly profitable business than they were in really sitting back and thinking Continue reading “Facebook critic: Greed led to company meltdown”

How a Trump trade war with China could whack the U.S.

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President Donald Trump’s plan to slap as much as $60 billion in tariffs on imported Chinese goods could eventually trigger a trade war that slams American farmers, according to a leading expert on the U.S.-China relationship.

David Dollar, a Brookings Institution fellow and former U.S. Treasury envoy to Beijing, said in the latest POLITICO Money podcast that Trump misunderstands the nature of the U.S. trade relationship with China — and that a trade war could badly damage the American economy.

“I think the argument that we are losing out to China — that they are cheating everywhere — I think that’s overblown,” he said. “The administration focuses a lot on the imbalance in the relationship, and that’s not really a very useful metric. The trade balance is largely a macroeconomic variable. In the Continue reading “How a Trump trade war with China could whack the U.S.”

Why Trump Slayed His Own Masters of the Universe

Donald Trump swept into the White House on a promise to run the government like a business and stock his administration with titans of industry.

The partnership hasn’t worked out.

Just over a year into Trump’s presidency, those titans are leaving, driven out by a chief executive who doesn’t want to hear no, doesn’t trust anyone but himself and can’t stand to share the spotlight, even with those he once hailed as “the best people” on earth for these jobs.

Trump humiliated Secretary of State Rex Tillerson, the former chief executive of oil industry giant ExxonMobil whom he once described as “the embodiment of the American dream,” firing him by tweet. He repeatedly rejected the advice of National Economic Council Director Gary Cohn, driving the former president of Wall Street powerhouse Goldman Sachs nuts with his stubborn insistence on tariffs and hastening Cohn’s exit.

And he went ice cold on Continue reading “Why Trump Slayed His Own Masters of the Universe”

Trump taps Larry Kudlow to be top economic adviser

Larry Kudlow will be the next director of the National Economic Council, succeeding Gary Cohn as President Donald Trump’s top economic adviser, a person close to the matter said.

Trump offered the job to Kudlow, an economic analyst and television personality, over the phone Tuesday night while Kudlow was at dinner in Manhattan, and he accepted, the person said.

Go behind the latest battle over banking

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The latest POLITICO Money podcast breaks down the bank deregulation bill poised to pass the Senate this week.

Analysts Jaret Seiberg of Cowen Washington Research and Isaac Boltansky of Compass Point Research and Trading weigh in on whether the bill could make banks more risky and hurt consumers — as Sen. Elizabeth Warren (D-Mass.) warns — or represents a sensible rewrite of some of the more onerous regulations enacted eight years ago in the Dodd-Frank Act.

Kudlow emerges as leading candidate to replace Cohn—at least for now

Donald Trump’s search for a new top economic policy adviser is playing out the way most things do in this White House – with the president sending mixed signals, leaving those around him struggling to keep up.

By Monday afternoon, at least two candidates to take over for Gary Cohn as director of the National Economic Council – deputy NEC director Shahira Knight and White House director of strategic initiatives Chris Liddell – appeared to be out of the running entirely, while outside adviser Larry Kudlow’s prospects had greatly improved.

After souring on Kudlow because he publicly criticized the president’s decision to impose steep tariffs on steel and aluminum imports, Trump is now leaning heavily toward choosing the economic analyst and former Reagan administration official, according to two people familiar with the situation. One person said Trump was close to settling on Kudlow, but another cautioned that the situation could Continue reading “Kudlow emerges as leading candidate to replace Cohn—at least for now”

The big challenge for Cohn’s successor: Staying close to Trump

White House economic adviser Gary Cohn has one more thing he wants to do before he leaves his post: help President Donald Trump pick his successor.

Behind the scenes, one candidate Cohn is pushing is his deputy director of domestic policy, Shahira Knight — a former Hill staffer and ex-lobbyist — to replace him as director of the National Economic Council, according to two people familiar with the discussions.

As the NEC’s resident tax expert, she was integral to working with lawmakers to develop the historic tax legislation and has allies throughout the Hill and downtown. One Republican lobbyist said she has “the inside track if she wants it.” Knight did not respond to a request for comment.

Whoever inherits the job faces the challenge of retaining the same level of influence as Cohn did. The former Goldman Sachs banker and New York Democrat turned the non-Senate confirmed slot Continue reading “The big challenge for Cohn’s successor: Staying close to Trump”

Why Isn’t Wall Street Freaking Out About Trump?

On election night in 2016, Treasury Secretary Jack Lew had an uneasy feeling. Lew was a Democrat and a native New Yorker, but decided not to join Hillary Clinton and other Democrats at a victory party in Manhattan.

His concern was that if Donald Trump were elected president of the United States—a remote prospect, but not impossible—the shock could be a black swan moment. That’s Wall Street jargon for a highly unexpected event that plunges the economy into the unknown. The sudden arrival of a figure so unpredictable, with so little governing experience, could upend global markets and possibly require emergency government intervention. Lew decided to stay at his post in Washington.

“I had a bad feeling before the election,” Lew recalled in a recent interview. “I voted absentee, because I thought I just had to kind of be there if something unsettling happened, if there was a market reaction. Continue reading “Why Isn’t Wall Street Freaking Out About Trump?”

Is a trade war coming?

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The latest edition of the POLITICO Money podcast answers the hottest listener questions on the big battle over steel and aluminum tariffs currently roiling the White House and global markets. Will President Donald Trump proceed with the tariffs? How will it hit consumers and the U.S. economy? How will other countries react? Get smart fast on all these questions and more.

How Trump’s trade war finally broke Gary Cohn

NEW YORK — Wall Street is losing its main man in the White House.

Gary Cohn, the hard-charging former Goldman Sachs president who eased market fears about President Donald Trump’s erratic presidency, said Tuesday he would leave in the coming weeks after losing a bruising internal battle over trade.

Cohn, a New York Democrat and avowed free-trader, tried desperately to persuade Trump not to impose sweeping tariffs on steel and aluminum, arguing they would kick off a global trade war that could damage the U.S. economy.

Trump so far has ignored Cohn’s advice, siding with nationalist advisers who strongly favor the tariffs. A meeting planned for Thursday at the White House with executives from companies that could be hurt by tariffs has now been canceled.

Cohn, known in his decades on Wall Street as a pugnacious trader, is not leaving the fight right away. He plans to stay on Continue reading “How Trump’s trade war finally broke Gary Cohn”

How Trump’s trade war finally broke Gary Cohn

NEW YORK — Wall Street is losing its main man in the White House.

Gary Cohn, the hard-charging former Goldman Sachs president who eased market fears about President Donald Trump’s erratic presidency, said Tuesday he would leave in the coming weeks after losing a bruising internal battle over trade.

Cohn, a New York Democrat and avowed free-trader, tried desperately to persuade Trump not to impose sweeping tariffs on steel and aluminum, arguing they would kick off a global trade war that could damage the U.S. economy.

Trump so far has ignored Cohn’s advice, siding with nationalist advisers who strongly favor the tariffs. A meeting planned for Thursday at the White House with executives from companies that could be hurt by tariffs has now been canceled.

Cohn, known in his decades on Wall Street as a pugnacious trader, is not leaving the fight right away. He plans to stay on Continue reading “How Trump’s trade war finally broke Gary Cohn”

Gary Cohn resigning as top White House economic adviser

Gary Cohn is resigning as National Economic Council director amid a battle over tariffs within the Trump administration, the White House said Tuesday.

"It has been an honor to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform," Cohn said in a statement provided by the White House. "I am grateful to the President for giving me this opportunity and wish him and the Administration great success in the future."

Cohn left Goldman Sachs, where he was president and chief operating officer, to join the White House in 2017. He had urged President Donald Trump not to impose steep tariffs and was widely seen as likely to exit after Trump announced plans to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports.

His decision caps an uneven tenure in the Continue reading “Gary Cohn resigning as top White House economic adviser”