Morning Wire Podcast Summary Episode: Trump's Economic Architect on Inflation, Deregulation, and America’s Future | 11.9.24
Host: John Vickley & Georgia Howe
Guest: Scott Besant, Former Chief Investment Officer of the Soros Fund and Economic Advisor to President-Elect Donald Trump

1. Introduction

In this episode of Morning Wire, John Vickley and Georgia Howe welcome Scott Besant, a prominent Wall Street investment officer and economic advisor to President-Elect Donald Trump. Besant brings his extensive experience from over a decade as the Chief Investment Officer at George Soros Money Management Group to discuss the economic strategies expected to shape Trump's upcoming administration.

2. Transition from Soros Fund to Advising Trump

John Vickley opens the conversation by inquiring about Besant's transition from the Soros Fund to advising Donald Trump.

• Scott Besant [01:35]:
  "The Soros Money Management Organization was kept very separately from George Soros Foundations... I could see all the globalist tendencies traveled in those circles... [Trump] is recasting the US and the Republican Party into a multiracial working-class party and a party of entrepreneurs and patriots."

Besant emphasizes his alignment with Trump's vision to prioritize American workers and entrepreneurs over globalist agendas, contrasting it with his previous environment.

3. Tackling Inflation and Economic Conditions

The discussion shifts to the current inflationary challenges and expectations for Trump's administration in addressing them.

• John Vickley [03:27]:
  "Inflation has cooled over this last year. Do you expect Trump 2.0 to be even more effective, or is it going to be more difficult to make the kind of progress that he made under his first term?"

• Scott Besant [03:44]:
  "We’re starting with worse initial conditions... Democrats have gunned the engines... 7% of GDP budget deficit, the largest deficit we have ever had... But the team and the programs learned in Trump 1.0 are vastly superior."

Besant acknowledges the heightened economic challenges but expresses confidence in the strategies developed during Trump's first term to navigate these issues effectively.

4. Market Optimism and Economic Policies

Besant discusses the reasons behind the market's positive response to Trump's election and the sustainability of this optimism.

• Scott Besant [04:45]:
  "Animal spirits are being unleashed... The regulatory state under Obama, Harris, and Biden... suppress GDP... President Trump is a businessman... he is economically sophisticated."

Besant attributes the market rally, notably the Dow Jones surge by 1,300 points, to reduced regulatory burdens and renewed business confidence under Trump's leadership.

5. Chief Economic Goals of the Trump Administration

Outlining Trump's primary economic objectives, Besant highlights deregulation, energy policy, and fiscal strategies.

• Scott Besant [06:38]:
  "Executive orders that push back on regulation, especially in energy and finance... Renew the tax cuts and job act... Reprivatize the economy, restart the private sector."

He anticipates immediate actions to reduce government interference, enhance energy production, and solidify tax reforms to stimulate economic growth and reduce deficits.

6. Tax Cuts, Deregulation, and Their Impact on Inflation

The conversation delves into how Trump's proposed tax cuts and deregulation measures are expected to influence inflation rates.

• Scott Besant [08:47]:
  "Deregulation directly brings down cost... It’s a hidden tax... Tax cuts drive growth... If we keep spending under control with the tax cuts, then that brings inflation down slowly."

Besant argues that reducing regulatory burdens lowers operational costs for businesses, which in turn can mitigate inflationary pressures while fostering economic expansion through tax incentives.

7. Tariffs and Consumer Costs

Addressing concerns raised by the legacy media regarding Trump's tariff policies, Besant provides a counter-narrative on their actual impact.

• Scott Besant [11:16]:
  "That’s absurd. The US is a big closed service economy... A 10% tariff... could lead to the currency appreciating by about 4%... It will be offset by deregulation and efficiency gains."

He contends that tariffs will have a minimal effect on consumer costs and that the overall economic benefits from deregulation and increased efficiency will outweigh any minor price adjustments.

8. Strengthening the US Dollar While Enhancing Exports

Besant discusses strategies to maintain a strong US dollar without hampering export competitiveness.

• Scott Besant [13:08]:
  "As we deregulate and have cheaper energy, more capital will flow into the US... President Trump is very, very bullish for the dollar... Increasing after-tax returns on capital will draw money into the US."

He believes that deregulation and energy sector improvements will attract investment, thus strengthening the dollar while supporting a robust export market.

9. Contrasting Trump’s Economic Approach with the Harris-Biden Administration

The final segment contrasts the Trump administration's economic policies with those of the previous Harris-Biden administration, particularly regarding DEI and ESG initiatives.

• Scott Besant [15:06]:
  "Executive orders on day one will push for economic efficiency over ideology... Programs like the CHIPS Act will be streamlined... The best people will get the best jobs."

Besant criticizes the prior administration's focus on social engineering over economic productivity, asserting that Trump's approach prioritizes merit and efficiency to drive economic success.

10. Conclusion

John Vickley wraps up the discussion by highlighting the expansion of Trump's voter coalition as a significant outcome of the election.

• John Vickley [16:06]:
  "Night that he expanded his coalition of voters was perhaps the major story Tuesday."

Scott Besant and the hosts extend their gratitude, concluding the episode with optimism for the upcoming administration's economic direction.

This episode offers an insightful perspective into the economic strategies anticipated under President-Elect Trump's administration, emphasizing deregulation, tax reforms, and a focus on revitalizing the private sector to foster growth and control inflation.