Trump promised to “drain the swamp” and has instead chosen to place foxes in the hen house.
From the nomination of the Wall Street insiders Steven Mnuchin and Wilbur Ross to key posts atop the treasury and commerce departments, respectively, to the selection of individuals whose qualifications seem questionable at best, Trump’s choices to fill key business positions in his administration appear likely to favor the elite more than the man on the street.
Trump himself is on record as opposing the Dodd-Frank rules that have made Wall Street a (slightly) safer place in the wake of the financial crisis. Mnuchin, like all good Wall Streeters, clearly would love to see those rules vanish, although he has been discreet about what he says publicly.
Mnuchin himself profited when the distressed mortgage lender he bought at a firesale price, IndyMac, foreclosed on properties owned by tens of thousands of homeowners who had taken out mortgages with his firm prior to the financial crisis. In one case, the firm foreclosed on a 90-year-old woman following a 27-cent error in her payment. Is this someone who will fight for real Americans against insider interests? Or one who is more likely to fight against them on behalf of those insider interests?
Ross is a more complex character. He has made his money as a turnaround investor, taking near-bankrupt companies and salvaging them when possible. Some of those skills might translate to the commerce secretary role, where he would be responsible for promoting economic growth and developing business, as well as trade negotiations with countries such as China. But bankruptcy turnaround also involves cutting jobs, not creating them; it’s about keeping costs low and acting in the interests of a company’s debt holders, and possibly its shareholders. Its workers? Well, their labor contracts, with guaranteed living wages, often serve as a barrier to the kind of restructuring deals that people like Ross want to negotiate.
But then we move on to look at Trump’s pick for labor secretary, and the mind is truly boggled.
After several years in which fast-food workers have taken the lead in the battle for higher minimum earnings – even going on strike in hundreds of cities to demand a wage of $15 an hour – it seemed as if their efforts were finally gaining momentum. In New York City, for example, pay for fast-food workers will hit $15 an hour by 2018.
Trump, however, has just tapped a fast-food executive and outspoken opponent of the push for higher minimum wages, Andrew Puzder, to serve as his labor secretary. Good luck to any Americans looking for support from the government for any living-wage proposals. Puzder’s response to those who have advocated for the $15-an-hour wage? “They should really think about what they’re doing,” he has said. We need to keep entry-level salaries low in order to be able to accommodate entry-level workers, he added. No word about what happens when workers are no longer entry level but still earning those meager wages, or when those ultra-low earnings simply leave families eking out an existence just above the poverty line.
Let’s get this straight: the individual who will be responsible for overseeing the government’s policies with respect to small business – ensuring that those small businesses treat their employees responsibly and that the government finds ways to help them grow – is a billionaire co-owner of a (large, not small) company that may have achieved its wealth in part by exploiting loopholes in labor rules? That’s a great model for those ambitious entrepreneurs to emulate, isn’t it?
But as Trump himself may not yet have fully grasped, running the United States of America is not akin to running USA Inc. His picks to run business-related portfolios need to include in their calculus more than just conventional business metrics such as return on equity or profit.
That’s particularly true if Trump wants to keep his core constituents happy. He’s in a honeymoon period right now, but if this new cabinet and its denizens of the billionaire swamp conduct business as usual, ignoring the needs of the ordinary workers who aren’t investors and who aren’t large-scale consumers or campaign donors, then that honeymoon won’t last long.