All in DC - March 18 2025
- Chamath and Friedberg giddy about White House tour
- Scott Bessent interview
- 79th Secretary of the Treasury
- From South Carolina
- Dad was a real estate developer
- Went to Yale
- Internship with Jim Rogers (George Soros’s first partner)
- Worked for Soros Fund Management
- Worked for Stan Druckenmiller
- Best at changing his mind
- “Invest, then investigate”
- “It takes courage to be a pig”
- Worked for Stan Druckenmiller
- 1992 and Bank of England
- Analyst (Bessent), Portfolio Manager (Druck), Risk Manager (Soros)
- Made a strong bet and worked out for them
- Learn to play backgammon
- Analogize to today
- Saw Biden admin spending when there was no need and open border policy
- Inflation went up and purchasing power went down (if you didn’t have assets)
- Used car prices, car insurance, rent, groceries - everything became expensive
- Bottom 50% have no assets but have debt - it ended the American dream (top 10% were happy because assets went up)
- After WW2 90% of families - children made more money than their parents, now its 50-50
- “Let them eat flatscreens” economy is not good policy
- Happiness is measured by your change in net worth - no matter your level in the socio economic ladder - Jonathan Haidt research
- Trump economic strategy
- Need to get to long term average of 3-3.5% of debt to GDP
- Federal government has a spending problem, not a revenue problem - Biden admin bumped spending as a percentage of GDP to 25% (should be 18-21)
- Singapore spends 18% vs GDP
- Hard balancing act given debt is going up so much
- De-lever the government via spending - also shed excess labor from govt
- De-regulate the financial system - then private sector re-leveraging - and employment - folks who lost govt job will be picked up by the private sector
- 1 way to get prices down is to get real wages up
- Re-order intl trading system and get jobs back to the US and reinvigorate the middle class
- Use tariffs where needed to bring other countries into line
- 3 other things they can do
- Low and predictable taxes
- Substantially thrash regulations - predictability in regulations
- Cheap energy
- Tax cuts and deregulation to grow GDP - and either keep expenses flat or cut them
- The hope is to get economic growth
- OPM - other people’s money - most politicians’ job is to get more money for their constituents
- Deregulation
- Examining bank regulations
- Ex: why do small banks have to hold as much capital as the big banks?
- Regulator’s incentive is not growth - its a “financial corset” - to turn the screws more and aim for safety
- Supports Fed autonomy
- But their regulations might hurt their autonomy
- Banking regulators are Federal level - Fed, OCC, FDIC
- Inherited tough situation from Janet Yellen’s actions of issuing money
- Needs to partner well with Congress - else crazy inflation will be biggest tax hike in history
- Business leaders in administration (Loeffler, Lutnick, Burgum, Elon etc) - will be happy
- Examining bank regulations
- DOGE
- Need to cut faster - else vested interests will win out
- 25% of GDP pulsates through DC’s decisions so folks always want to skim some of it
- Government employees are very high quality
- Apparently Booz Allen Hamilton gets 98% of their revenue from the government? Is this actually true? If so why didn’t they manage their concentration risk - how entrenched do they think they are?
- Apparently IRS has same number of people on staff on Christmas eve (basically rest of the year) as they do April 14/15 (tax deadline)
- Social Security
- Maybe have investment account for newborns
- By putting funds in treasuries - the citizens are loaning their retirement to the government for spending
- Maybe convert it to a sovereign wealth fund?
- Trump wants to create assets for the American people
- What about Fannie Mae and Freddie Mac and conservatorship
- Doug Burgum did like a couple of sovereign wealth funds for North Dakota - ~$25B maybe
- Australia has a similar model for super annuation and they have ~same amount of money as US social security inspite of having 7% of US population
- Why didn’t US do it - it was supposed to a safety net and not a retirement plan (was for old age and disability)
- Need to fix energy - if nuclear isn’t sustainable investment then government should step in
- Surprises
- National security aspect of the role
- Example - when Trump announced Houthi strikes, government was already working on their bank accounts, etc
- Trump interaction with his family was pleasant
- President, VP and Zelenskyy interaction was surprising
- Fix affordability
- Can we change housing building codes to allow for flexibility
- If federal government has step in for insurance backstop then can they mandate some kind of building (clear of brush, building materials, etc for example in CA)
- Not sure why Biden administration was against hybrids (didn’t pass their purity test)
- Trump
- sharp memory
- excellent executive skills
- sees how folks react
- Wants to be Mayor of America
- National security aspect of the role
Comments