There were fears early this year that a top economic official, pandering to Donald Trump, might harm the economy.
Those fears have materialized. Except it’s not the Trump-appointed new chairman of the Federal Reserve, Kevin Warsh, who shows signs of maintaining the Fed’s historic independence that Trump hates.
It’s Treasury Secretary Scott Bessent who has debased his credentials by turning into a political hitman. He bends over backwards to please Trump on matters ranging from economics to ethics to politics.
This has sacrificed some of the Treasury’s critical credibility.
It’s a posture that would be antithetical to modern Treasury Secretaries like Republicans Jim Baker (served under President Reagan) and Henry Paulson (George W. Bush) and Democrats Bob Rubin (Bill Clinton) and Tim Geithner (Barack Obama).
Appearing at the Republican’s midterm convention in Dallas last month was a shocker. He gave a heavily partisan, banal speech and took a cheap shot at former President Biden who he said “couldn’t stay awake.”
You’d have to go back more than a half century to John Connally to find a Treasury Secretary so openly partisan.
He’s thin-skinned, arrogant, likes to act like a tough guy. Last year he called Ukrainian President Zelensky a “special needs child,” and an obscenity even I won’t publish.
When Democratic Sen. Ron Wyden was questioning the Treasury Secretary about corruption, Bessent charged he was trying to cover up the one meeting the Senator’s son had about investments with sexual predator Jeffrey Epstein.
He has come close to fisticuffs with several adversaries.
His hot tempered diatribes have offended allies too. There has been a huge turnover at the top levels of Treasury as the Wall Street Journal reported last week: “Inside Bessent’s Treasury: Tension, Turnover and Unmet Economic Goals.”
Unlike his predecessors he has shown no hesitation in personally attacking the Federal Reserve, especially former chair Jay Powell, not just on interest rates. He charged it was improper for Powell to attend a Supreme Court argument over whether another Fed member constitutionally could be removed and that the former Chairman broke with precedent by staying on the board after his term as chairman expired.
Bessent was silent when Trump attended the Supreme Court argument over birthright citizenship. Two other Fed chairs, most notably Marriner Eccles, stayed on the board after their chairmanship.
He plays to Trump in going after the press. He rejected credentials for the Wall Street Journal, Bloomberg and the New York Times to cover the G-20 meeting this summer. He stiffed the usual Treasury press corps on a trip to Ukraine but included Jack Posobiec, an ultra right wing influencer who has been accused of consorting with white nationalists and anti-semites.
Bessent has mocked the Bloomberg financial terminal and called the Wall Street Journal’s respected chief economics reporter one of the “stenographers posing as journalists.”
The mere thought of declaring war on America’s two leading financial news organizations would have sent Jim Baker to the ICU.
Perhaps his trashy talk and actions wouldn’t matter if the record weren’t so bad. Almost all of the former Hedge Fund executive’s predictions on inflation, housing, gas prices, etc. have been off the mark.
One of his biggest initiatives, selling short term debt to reduce long term rates flopped. He made it worse at a speech when, using a casino term, he boasted, “I am the House,” dissent at your own risk.
Shortly afterwards a Fortune headline: “Bessent said ‘I am the House.’ The bond market disagreed.” His former financial firm partner, Stanley Druckenmiller, charged this had eroded the Treasury’s credibility. Nobel prize winning economist Paul Krugman described “the Beclowning of Scott Bessent.“
On August 21, the day after his attempt to bring down long term rates, the yield on the 30 year Treasuries was 5.25%; on Friday it closed at 5.6%.
He’s a Trump enabler. Elon Musk’s DOGE raiders sought access to the sensitive private Treasury files on Social Security payments and income tax rebates. They were turned down but this was overruled by the top.
This year an unprecedented deal was cut which gave Trump and his family immunity from IRS tax audits. Bessent, in charge of the IRS, has refused to discuss this as a federal judge is still looking at this shady deal.
The Secretary’s defenders say he has privately prevented bad or worse actions: getting Trump to tamp down his tariffs and persuading him not to fire Jay Powell. They say both Wall Street and foreign finance leaders would much prefer dealing with Bessent than Commerce Secretary Howard Lutnick or White House aide Peter Navarro.
True, but that’s a bit like being the brightest bear in the zoo.
None of the Cabinet departments have any credibility remains. Sychophantic leadership with idea what they are doing has taken our executive branch down the drain and out to the sewage disposal plant. It will take years to fix this mess.