Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Financial Markets Improvised Explosives - 27th Apr 17
More Stock Market Short-Term Uncertainty As Stocks Get Close To Record High - 27th Apr 17
Elliott Wave Theory: Is Elliott’s Theory Enough? - 27th Apr 17
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17
Can Marine Le Pen Win? French Presidential Election Forecast 2017 - 21st Apr 17
Why Stock Market Investors May Soon Be In For A Rude Awakening - 21st Apr 17
Median US Household’s Wealth Has Declined by 40% Since 2007 - 21st Apr 17
Silver, Platinum and Palladium as Investments – Research Shows Diversification Benefit - 21st Apr 17
U.S. Stock Market and Gold, Post Tomahawks and MOAB - 21st Apr 17
An In Depth Look at the Precious Metals Complex - 20th Apr 17
The Real Story of China’s Strong First-Quarter Growth - 20th Apr 17
3 Types Of Life-Changing Crisis That Make You Wish You Had Some Gold - 20th Apr 17
The Truth is a Dangerous Thing - 20th Apr 17
2 Choke Points That Threaten Oil Trade Between Persian Gulf And East Asia - 20th Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

10 Things I learned From Meetings With Trump’s Transition Team

Politics / US Politics Jan 30, 2017 - 11:05 AM GMT

By: John_Mauldin

Politics

I was in Washington, DC, on Inauguration Day.

That gave me the opportunity to set up a few meetings with members from Trump’s transition team (many of whom read my free weekly letter, Thoughts from the Frontline).

During those talks, I gained some insight into what the first 100 days, the first six months, and the first year of the Trump administration might look like.

Here’s a summary of my impressions.


Let’s dive in.

Everything is planned out in detail

If you listen to the media, you might have the impression that the Trump transition team is in complete disarray. But my talks with leaders of the transition team certainly didn’t leave me with that impression.

They have broken the transition process down into over 30 departments and have created a “landing document” for each department. The analogy they are using is that this process is like planning an invasion... they’re going to hand the landing document off to the “beachhead teams” who will then execute the plans.

I was briefly allowed to look at (without actually being able to read) the plan for one cabinet-level department. It appeared to be about 100 pages plus of serious detail as to exactly what executive orders would need to be removed and added, what personnel would have to be replaced (both appointees and regular staff), what policies would need to be changed, and so forth.

I was told that this level of planning was being done for every department. My impression is that there are a lot of people from various think tanks and others with experience in the presidential transition process who are involved in directing the plan for each department.

That level of detailed planning doesn’t happen in less than two months. My guess is that some of that thinking has been going on for years, and now it can be implemented.

When I asked a key person how much of the overall plan would likely come to fruition, I got a rueful smile and a shrug. “If we even get half of this done in the first few years, that will be major reform.”

There seem to be two general types of agency plans

First, there are those where the culture of the department has to be changed, and then are those where the current staff seems to be doing its job, but the culture surrounding the department has to be dealt with.

Those are entirely different issues. The first can be handled to some degree by the executive branch, but the latter needs to be dealt with by congressional action.

Trump’s management style is going to drive the world nuts—until we get used to it

One person who has worked closely with Trump during the transition says it is a lot like the HBO show Entourage and not at all like the British sitcom Yes, Minister.

Trump will have people in his entourage competing to give him the pieces of information he needs. In his business organization, he sets the vision and hires people to execute that vision. He then goes back to doing what we have seen him do so well, which is to create the brand and image.

He is bringing in people to execute his vision, and he’s going to expect them to get it done. He will jump in when he thinks he’s needed or when he can add something to the process, but he will mostly be paying attention to his team’s performance.

One assessment suggests that there is going to be more than the usual amount of personnel turnover in the first six months. The media will be writing about how Trump can’t keep people and about all the chaos in the White House and other parts of government. But from Trump’s perspective, and given his management style, that’s not necessarily bad in terms of his longer-term goal of changing things.

We have not had a president with this type of management style in my lifetime. Since it’s not something that any of us are going to be familiar with, it is going to make some of us uncomfortable until we get used to it (and some people never will).

Everyone in the new administration and Congress agrees there is going to be significant tax reform

That is where the agreement ends. There is absolutely no consensus on what that tax reform should actually look like. Among members of the US Congress (and others that you’d think should know), the universal answer is “I have no idea.”

I will candidly admit that some of the tax ideas I’ve been reading about make me nervous. The wrong type of tax reform can do serious damage to the economy. One of the few things that nearly all economists can agree on is that getting the incentive structure correct is critical.

I am not sure that some of the people who seem to be in a position to influence the proposals really understand the importance of incentives and the impact they could have on trade and business.

Part of the reason the market is up and that optimism levels are up in all the polls is that people have high expectations about the nature and depth of the tax reform we’ll get.

Failure to deliver on something that at least comes close to meeting those expectations is going to have a significant negative impact,, not just on the economy but also on the markets. I don’t know how long the new administration will have to “stand and deliver.”

Everyone is convinced that Obamacare will be repealed—but no one knows how 

There are considerable differences in the plans that would replace Obamacare. (I wrote a few ideas about this back in October in "How to Build Healthcare Right.") My guess is that we are going to get substantial relief for small businesses and move towards more significant health savings accounts.

There will not be a single mandate for an insurance company to cover all sorts of things. A 55-year-old woman is not going to have to purchase insurance that has prenatal care in it. People will have much more ability to tailor insurance to their own personal needs.

This should help a great deal on costs to individuals and businesses, but it doesn’t deal with the overall cost of the system.

Dodd–Frank is going to be restructured

It is also very likely that the new DOL rule on fiduciaries and ERISA plans will at least be will be postponed... if not significantly changed.

On a personal note, there are parts of the DOL fiduciary rules that make sense, and I support them. But it appears to me that DOL was trying to make a one-size-fits-all rule that was just a bridge too far.

Trump can withstand more resistance than we think

Steve Moore passed on a story to me. He and my friend Larry Kudlow were meeting with Trump, and Trump asked them if they would like to be part of his economic advisory team during the campaign.

They looked at each other and back at Mr. Trump and said something to the effect of, “You can’t use us. We believe in free trade.” And Trump then said, “But we agree on nearly everything else. Let’s agree to disagree on trade and figure out where we can work together.”

Not many presidents are willing to have that level of disagreement from the outset. That is somewhat comforting to me. I will admit that, having asked a few questions of people who have interacted with Peter Navarro, he still makes me very nervous.

The biggest problem will be bureaucracy

There is a general understanding on the part of nearly everyone I talked to that the biggest problems are going to be in dealing with the entrenched bureaucracy.

It is highly likely that Congress will pass legislation that requires any department making a ruling that could cost over $100 million to get congressional approval for that rule.

There are literally thousands of presidential appointees that don’t have to be approved by the Senate

But the proper procedure is to wait until the cabinet-level officers and senior management are in place so that they can have input on those appointments. If you expect appointees to run a department or agency, you need to give them the people they want.

We’ll see a lot of legislation passed in the first six months

Congress has been passing literally hundreds of pieces of legislation, knowing full well they would be vetoed and never see the light of day. Not all of these will be brought back up, as the Republicans were counting on Obama vetoing them.

But I think we will see a great deal of legislation passed in the first six months to one year. These are bills that have already been through committee and have enough support to get action.

Final thoughts

On Monday, some 538 people who are the initial members of the transition beachhead teams will show up in offices all over the country, but mostly in DC.

It is going to be quite some time before we begin to see much change and can begin to figure out what that change will actually look like.

I’m not going to offer my thoughts on the inaugural speeches and events, as my political leanings are really not the focus of Thoughts from the Frontline (subscribe here for free). But in the areas where politics and economics intersect—an intersection that seems to be expanding—we may have to revisit the political arena again.

Watch my exclusive video about Trump's inauguration (3:16) below and don't forget to subscribe to our Youtube channel for more fresh analysis and insider information.

Get a Bird’s-Eye View of the Economy with John Mauldin’s Thoughts from the Frontline

This wildly popular newsletter by celebrated economic commentator, John Mauldin, is a must-read for informed investors who want to go beyond the mainstream media hype and find out about the trends and traps to watch out for. Join hundreds of thousands of fans worldwide, as John uncovers macroeconomic truths in Thoughts from the Frontline. Get it free in your inbox every Monday.

John Mauldin Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife