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    Thursday, May 09, 2024

    Trump the populist and Trump the insider

    It was a day of mixed messages from the president-elect, again pointing to the uncertainty about what kind of president Donald Trump will be.

    There came the report that will excite working-class Americans who supported Trump because of his vow to make America great again by stopping the flow of manufacturing jobs to other countries. Trump and Vice President-elect Mike Pence, the governor of Indiana, will appear at an Indianapolis factory Thursday to announce they already are saving such jobs.

    Plans by the Indiana-based air conditioning manufacturer Carrier to move more than 2,000 jobs to Mexico became a regular point of attack by Trump during the campaign, an example of what was wrong with the country.

    According to various news reports, Trump and Pence will announce that, after discussions with Carrier, the manufacturer has agreed to keep about 1,000 jobs in the state. Indiana reportedly is ready to offer economic incentives to Carrier. In that regard, it is not unlike the incentive-laced deal recently negotiated by Connecticut’s governor, Dannel P. Malloy, to persuade Sikorsky Aircraft to keep manufacturing military helicopters in Stratford. Though in that case the competition was other states.

    Trump also is ready to ask a willing Republican Congress to ease regulations, potentially on energy efficiency requirements, and reform the corporate tax code.

    And there was the possible threat faced by Carrier's parent company, United Technologies. It has $56 billion in military contracts with the government. Given the populist fervor that helped sweep Trump into office, the possibility that it could be punished in the defense sector for Carrier moving jobs out of the country is a factor UT had to weigh.

    Directly appealing to a manufacturer to keep jobs in the country is a bold and un-Republican move, interfering with the free market and the corporate obligation to benefit shareholders by only looking at the bottom line. But Trump was an unconventional, and only recently initiated, Republican candidate.

    In the context of the economy, 1,000 jobs are not many, but the move has great symbolic value for the incoming president. The far bigger challenge for Trump will be making good on his promises to protect and restore blue-collar manufacturing jobs generally. The primary force to move jobs to Mexico and elsewhere — big savings in labor costs — remains the same. Compounding the trend are the jobs being lost to robotic technology on assembly lines.

    As for mixed signals, while Trump’s Carrier initiative signaled he was ready to govern as a populist, his choice for Treasury secretary, Steven Mnuchin, signaled the opposite.

    Mnuchin (pronounced mi-NEW-chin) is about as establishment Wall Street insider as they come. The 53-year-old Mnuchin started his career at Goldman Sachs and became a partner. He would thus continue a string of Treasury secretaries with roots in the powerful Wall Street firm.

    After Goldman Sachs, Mnuchin created a hedge fund. When the financial markets collapsed under the weight of the reckless awarding and bundling of subprime loans, Mnuchin swept in and made a lot of money at the expense of a lot of people.

    Bloomberg reports that “Mnuchin joined with a group of former Goldman Sachs colleagues and billionaires to buy the remnants of IndyMac, which had collapsed after bingeing on reckless home loans during the frenzy of California’s subprime-mortgage boom.”

    According to the Bloomberg news service, they changed the name to OneWest and “carried out more than 36,000 foreclosures during Mnuchin’s reign, according to the California Reinvestment Coalition, a San Francisco-based nonprofit whose deputy director, Kevin Stein, dubbed the bank a ‘foreclosure machine.’”

    Re-sale of foreclosed properties as the market recovered brought great profits. The investors sold the bank last year and Mnuchin may have personally gotten more than $200 million in proceeds from the sale, according to Bloomberg calculations. One has to wonder how many of those 36,000 foreclosed homeowners voted for Trump.

    The Mnuchin pick hardly seems like “draining the swamp,” as Trump vowed to do if he reached the presidency.

    The Treasury nominee’s other big venture is financing movies, including the “X-Men” franchise and the hit “Avatar.” With an opening like this, it will be fascinating to see how the Trump script plays out.

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