President-elect Donald Trump’s transition team is working overtime to determine who will be in charge of day-to-day operations in the new administration. Currently, the media is most focused on who will become the next Secretary of State and Attorney General. Unfortunately, many of the names being tossed around are veterans of the establishment swamp that Trump pledged to drain.
Trump should be very cautious about who he selects as cabinet officials. Personnel is policy. Respectfully, I have two suggestions for him. First, that he listen to recommendations from his transition team but not default to their judgement. Second, that he resist the urge to reward the loyalty of yes-men, and instead seek wise and honest counsel.
Very few people seem to be focusing on who will be the next Secretary of the Treasury. But it is a very important position, and who Trump picks will send a signal about whether he is serious about addressing our deep economic problems.
The next Treasury Secretary must oppose the reckless, unprecedented money creation that is being undertaken by the Federal Reserve. He must understand how grim our debt and unfunded liability situation really is. He must oppose needless and excessive regulation of the economy, particularly the financial industry. He must oppose bailouts and moral hazard. He must have impressive experience-but at the same time cannot be an insider, a Wall Street crony.
There are two people I can think of who eminently meet those qualifications:
In 1981, David Stockman was a young congressman from Michigan when President Reagan decided to name him Director of the Office of Management and Budget, a position he held for the entirety of the term. After leaving the Reagan administration, Stockman spent over two decades in the financial sector, and today is one of the most recognized and respected authorities on the economy.
Stockman is a straight shooter and truth teller. He has been a modern day Paul Revere when it comes to the national debt and is a relentless critic of fiscal stimulus, monetary central planning, and financial bailouts.
There is no question that Stockman is a sharp as ever-in 2013 he released his 768-page (!) book The Great Deformation: The Corruption of Capitalism in America to rave reviews. Stockman has been very supportive of Trump this election cycle, but has also criticized him when necessary. That is exactly the type of person a president needs to be surrounded by.
John Allison is the man who built BB&T, transforming it from a regional bank to the 12th largest in the country. Retiring in 2008, Allison had been president and CEO since the late eighties.
Under Allison’s leadership, BB&T avoided the mistakes that caused the Wall Street giants to become vulnerable-and ultimately insolvent-by the time the housing bubble had come to roost. Incredibly, and this is central to Allison’s story, BB&T was forced to take TARP money against their will. Perhaps that is why Allison is one of the most vocal opponents of bailouts and proponents of free markets you will find.
Just as all Supreme Court justices need not come from Ivy League schools, not all financial industry titans must originate from the megabanks such as Goldman Sachs, JP Morgan, etc. Allison has as much experience as anyone; the difference is he has been left untainted and uncompromised.
Donald Trump should consider choosing one of these men to be the next Secretary of the Treasury-and then immediately offer the other the job of Deputy Secretary. That is how we can Make The Treasury Department Great Again.