Betting on Bessent

Houston, we have a Treasury secretary: President-elect Donald Trump announced billionaire financier Scott Bessent as his pick for secretary of the Treasury. Markets have responded well to that.

Journalist Mary Katharine Ham recently likened hearing about Trump’s Cabinet picks to the experience of an edible hitting. (“For a little while you’re OK. And then you’re like, ‘Ooh, there it is.’”). I think this is 100 percent accurate, but Bessent is at least widely regarded as a smart pick.

“Investors prefer orthodoxy, predictability, and coherence from economic policy; there were fears that some of the candidates may not possess those attributes. Bessent does,” wrote Paul Donovan, chief economist of UBS Global Wealth Management, on Monday. Elon Musk, who has reportedly ascended to Trump’s inner circle (and is one of his buddies?), was less keen on the choice.

Bessent “has described Trump’s threats of steep levies on Chinese imports as a ‘maximalist negotiating position,’” reports Bloomberg. “He has urged a phased approach to implementation, calling for tariffs to be ‘layered in gradually’ in an interview with CNBC earlier this month.” (More on his broad approach here.) It is perhaps partially a result of this moderate approach on tariffs that markets haven’t reacted terribly to the pick.

“When Bessent praises tariffs, he’s winning over Trump, not setting future policy,” Derek Scissors, senior fellow at the American Enterprise Institute, suggested to Bloomberg.

Despite those signs of appreciaton for global trade, Bessent has recently called for onshoring of key components used in pharmaceutical manufacturing. In other words: He is a mixed bag (and, for what it’s worth, a former donor to Democrats). There’s a lot that could happen here in terms of tariff policy, other tax policies, and the U.S.’s approach toward China.

Scenes from New York: Actions have consequences! About 11.5 percent of New York City’s hotel inventory have been preemptively allocated for migrants, and Airbnb restrictions have wiped out about 75 percent of short-term rentals. The results:

• “Israel is potentially days away from a cease-fire agreement with Lebanon’s Hezbollah, the Israeli ambassador to the US said, following a new round of shuttle diplomacy by a senior envoy for the outgoing Biden administration,” reports Bloomberg. Such predictions come around with some frequency, so take with a grain of salt.
• “Colleges and universities have tightened rules around protests, locked campus gates and handed down stricter punishments after the disruptions of pro-Palestinian demonstrations and encampments last spring,” reports The New York Times. “The efforts seem to be working.”
• Last week, news broke that Georgetown Law was giving a pregnant student a hard time about asking for a reasonable accommodation: taking her final exam early given that it conflicted with…her due date. Georgetown—which is ostensibly Catholic—has buckled under the pressure, but hell hath no fury like a pregnant woman scorned. I for one support her righteous crusade to improve accommodations for other students who may find themselves in a similar situation in the future (and, honestly, she seems like she’s gonna be a damn good lawyer):

Georgetown gave Brittany Lovely a one-off exemption after initially telling her that moving a test that conflicted with her due date was unfair to her classmates.

She’s fighting for them to change the *policy* so accommodation isn’t exceptional. https://t.co/G2ZNx3rph3 https://t.co/JWKOFPYmCf

— Leah Libresco Sargeant (@LeahLibresco) November 23, 2024

• Sen. Elizabeth Warren (D–Mass.) has never found a market transaction she doesn’t want to investigate or regulate. The latest: .com domain pricing, lmfao. It would all be hilarious if she didn’t have real power.
• Anduril founder Palmer Luckey was totally misrepresented by a Fast Company writer. This shows the value of X’s Community Notes:

Hey @FastCompany, it isn’t ethical to fabricate quotes by taking two difference sentences from two different parts of an hour-long talk, placing them next to each other, and putting the whole shebang in a quote block that means the opposite of what I actually said. https://t.co/5TwLkz30Ec

— Palmer Luckey (@PalmerLuckey) November 24, 2024

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