TBL Thinks: Trump 2.0, Lighthizer, Lutnick, Bessent, and DOGE
Dear Readers,
It’s Thinking Time! As the election result becomes a reality, this week we cover the names announced for various government departments, including the inception of a new department with initials that spell out DOGE.
TBL Thinks continues to focus on matters that will directly affect the US and World economies, but we realize that an inordinate amount of the news cycle is focused on this political transition. This week we continue to focus on the President-elect and the candidates being considered or announced for various departments, all who could impact the health and direction of the US economy for the next four years.
TBL Thinks is our way to summarize the most important paywalled, longer reads relevant to global macroeconomics, helping you cut through the noise. With that in mind, please enjoy.
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From Trade Representative to Trade Czar?
Donald Trump Tells Allies He Wants Robert Lighthizer as His Trade Czar (WSJ) President-elect Donald Trump has certainly been busy since his historic win a week ago, and now wants his former US trade representative to act as his new administration’s trade czar. Lighthizer helped Trump implement his trade policies during his first term, and has long been a trusted adviser for the former (and new) president.
The position of trade czar does not require Senate confirmation, and would likely give Lighthizer “oversight of trade policy across the administration including at the Commerce Department and the Office of the U.S. Trade Representative”. WSJ reports that Lighthizer has yet to have been offered the job, while adding that Trump could very well change his mind and offer Lighthizer the position of Treasury Secretary. More on Treasury shortly.
Trump campaigned on placing tariffs on imports coming into the US from across the world, and on reciprocity, or that US tariffs match those of its partners. We already see China shifting some of its rhetoric to a friendly stance, potentially in anticipation of increased tariffs. Trump tariffs are guaranteed to affect the world economy, but the exact impact can only be judged after we see what is rolled out and how countries such as China respond.
We believe that the conversation around tariffs’ impact on inflation and trade fails to capture the national security importance, at least from the administration’s perspective. Inflation be damned, tariffs will be the renewed US trade policy.
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One Out, Two In for Treasury Secretary
John Paulson Drops Out of Running to Become Trump Treasury Secretary (WSJ) Veteran investor John Paulson dropped out of the running for Treasury Secretary, due to “complex financial obligations.” Paulson has long been an ardent Trump supporter and was being considered by many for the much coveted role, so much so that Howard Lutnick, who is the president-elect’s transition co-chair, has thrown his own hat into the ring for the job, along with investor Scott Bessent.
Bloomberg reports that Lutnick’s desire for the role came as a surprise to Trump. He drew negative comparisons to Dick Cheney from his allies for stepping forward, while adding that any infighting from candidates vying for the same role would not be tolerated and would be cause for disqualification in Trump 2.0. Lutnick credits Susie Wiles, who will serve as the White House Chief of Staff, for running a more professional campaign.
Bessent has the support of many of Trump’s trusted advisors, and in a recent op-ed in the Economist wrote that “broad-based tariffs” would be an effective method to re-balance international trade. Bessent appears to be the favorite as of this writing.
Lutnick has aligned himself with Trump’s economic ideology and can be heard amplifying Trump’s call to trim the deficit and increase government efficiency. We admit that there is much to be decided on in terms of budget and deficit, and there are promises that might be difficult to deliver on. Our bias is to doubt sweeping spending cuts as feasible, but Elon and Vivek are here to prove us wrong.
DOGE for Musk and Ramaswamy
Trump Picks Musk, Ramaswamy for Government Efficiency Effort (BBG) It is fitting indeed that Elon Musk and Vivek Ramaswamy have been asked to lead a new Department of Government Efficiency, or DOGE, that brings to mind that ill-fated but meme-inspiring coin that went viral on Twitter in its pre-Elon days. In fact, Musk has even suggested the government efficiency panel could offer merch.
This new department’s mandate was laid out clearly by the president-elect: “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.” The panel is expected to work with the Office of Management and Budget and its work is expected to conclude by July 4, 2026.
With the size and structure of DOGE unclear, it only adds to the question of how exactly Musk and Ramaswamy plan to achieve the dramatic overhaul of the government they have been tasked with.
Musk proclaimed he could cut at least $2 trillion from the US federal budget during Trump’s rally at Madison Square Garden, an amount which exceeds what Congress spends annually on government agency operations, including defense. Including interest, Medicare, and Social Security, the total spend adds up to $6.75 trillion. Where will this pair find the fat to trim?
Ramaswamy has remained a staunch Trump ally, and was hesitant to criticize Trump even as he ran against him. He has also shown support for Trump’s plans to scale back the size of the federal government, pulling back from foreign alliances, advocating for the cryptocurrency industry, and backing ending US aid to Ukraine.
Until next time,
TBL Thinks
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Don’t wait to take control of your financial future. Set up an Unchained IRA today at unchained.com/tbl and experience true ownership of your retirement.