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Your guide to what the 2024 US election means for Washington and the world
The names of Donald Trump's top party nominees are somewhat similar to those of many presidents before him – mostly male, very wealthy and heavily drawn from the financial services industry.
Yet Trump's nominees differ in one important respect. They are not common. The list is notably devoid of well-known bankers, breaking with the tradition (albeit supported by Trump Mk I) that donor appointments would normally be drawn from the likes of Goldman Sachs.
This is true across the board – from vice president-elect JD Vance, a capitalist, and Treasury secretary nominee Scott Bessent, a hedge fund manager, to UK ambassador Warren Stephens, do-it-yourself investment bankingand Turkey's new ambassador Tom Barrack, a private equity and property investor.
Many of Trump's financial employees have become significant campaign donors and/or business partners during his career as a real estate mogul.
The “spoilt system” of patronage in US politics – an 18th-century tradition that allowed presidents to strengthen loyalty by appointing friends and family to government roles – was supposed to be removed in a series of legislative reforms that began in the late 19th. century. The incoming president not only adopted the program made famous by Andrew Jackson, the seventh president of the US, but he did so in a way that would create huge financial and political conflicts. How effective legal restrictions will be in addressing these disputes is unclear.
The happy reading of Trump's appointments so far is that these are the no-nonsense people who will cut through bureaucracy and bring energy to a growth-focused reform agenda. Elon Musk, the joint head of the Department called the Department of State Intelligence, is the incarnation-in-chief.
The breadth of Musk's business interests makes it difficult to pin down all the arguments as they relate to Tesla, SpaceX or X. Another point of view comes from Musk's close relationship with money – he started as co-founder of PayPal. X Payments, his newly born payment platform, aims to be the WeChat of the west and ape the great success of the Chinese “everything app”. A strong government and regulatory support can give the platform a big boost.
More important will be how the legal attitudes of the US to crypto currency (one of the Musk's animal themes) seems set to change. Under Gary Gensler's leadership, the Securities and Exchange Commission has taken an opposing stance: many cases have been introduced against crypto companies for fraud, called “washing sales” that increase the volume of transactions, registration violations, and other misconduct.
However Gensler set to be replaced by Paul Atkins, a passionate deregulator, who organizes the Token Alliance, a crypto lobbying group. Atkins will be supported by a number of other top appointees of the Trump administration: prominent Howard Lutnick, who is a vocal crypto advocate, and. strong links to Tether as secretary of commerce; and David Sacks, who Musk's closest aide and fellow Paypal alumnus, as the so-called White House AI and crypto czar.
On the investment front, Trump has chosen Stephen Feinberg, founder and chief executive of Cerberus Capital Management, as his deputy secretary of defense – opening up another potential conflict, given Cerberus' history of investing in defense industries. Similarly to the administration of social security, the selection of Frank Bisignano, chief of payments technology, to manage represents both a source of restructuring and a management conflict.
Although you can clearly see the potential benefits of disruption, the risk of placing interests in such matters is significant.
Another twist is that despite the lack of big banks among Trump's nominees, big banks whether they are notable winners. Watering down the so-called Basel III banking rules could save billions of dollars in capital charges. Refreshing The federal deposit insurance system may be beneficial to them, but it is harmful to smaller institutions, as depositors move their money to larger, safer banks. And any migration end government subsidies for mortgagesby fully privatizing Fannie Mae and Freddie Mac, they could become a success comparable to the big banks.
In the long run, such changes can cause chaos or trouble. That may be a time when Trump needs advice from Wall Street.