Howard Lutnick will keep America first – that's the subject of "The Riff."
So, many congrats to an old friend, Howard Lutnick, just nominated by President-elect Donald Trump to be Secretary of the Commerce Department.
Howard is a strong Trump supporter and friend for many years, a strong Trump campaigner and fundraiser throughout the presidential cycle. He has a tremendous success record as the CEO of the Wall Street firm Cantor Fitzgerald.
Importantly, he is co-chair of the president-elect's transition team, where he has done yeoman's work generating lists and lists of first-tier top candidates for positions in the new Trump administration. Mr. Trump called Howard "a dynamic force on Wall Street."
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You can bet that Howard Lutnick will be a bulldog in defending American business around the world. Thankfully, Mr. Lutnick is a dyed in the wool capitalist who is a strong believer in "America First." He will also be a strong advocate to remedy unfair trading practices directed at the U.S. He will support Mr. Trump's use of tariffs, whenever and wherever appropriate.
The world trading system is broken. Major trading partners like China, the EU, India, and elsewhere have significantly higher tariffs than the U.S. – and yet nothing is done about it by the World Trade Organization, which itself is completely broken.
Mr. Trump himself is a master negotiator who will not hesitate to use tariffs in search of reciprocity, or frankly to punish countries who keep violating trade deals.
And, although a lot of economists keep telling us that tariffs are inflationary, there's scant evidence of that. In most cases, consumers will boycott higher prices and force tariffed countries to lower their prices and their profit margins.
In his first term, Mr. Trump slammed tariffs on China – and there was no inflation. At worst, tariff-related inflation in certain areas might be a one-time short-lived effect.
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But, importantly, the U.S. cannot give away its crown jewels of advanced technological innovation. The U.S. cannot allow intellectual property theft or the forced transfer of technology.
Reciprocity is most welcome, but tariffs may still be necessary.
Howard Lutnick agrees with this – and will be strongly supported. Howard is a supply-sider who will also push hard for passage of the Trump tax cuts.
Significantly, he believes in dynamic scoring of the growth incentives from lower tax rates and the revenue feedback that has been proven all these many years – even though official scorekeepers like the CBO and JTC and private scorekeepers like the Penn Wharton Model deny the fact that revenues surged in the years after the Trump tax cuts. Just as they did after the JFK and Reagan tax cuts.
All this commends Howard Lutnick as Commerce Secretary. But there's one more very important point.
When terrorists slammed into the World Trade Center towers on September 11, 2001, 658 Cantor Fitzgerald employees were killed. Howard wasn't at work because he was taking his son to kindergarten. But, in the years after the awful terrorist attack, he not only rebuilt Cantor Fitzgerald into a Wall Street powerhouse, but he took great financial care of all of the families whose loved ones were killed in that dreadful terrorist attack.
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I interviewed Howard many times following the 9/11 attack, and we talked about what he was doing for the families.
Howard Lutnick has many accomplishments in business, and now forthcoming in government. But I believe what he did in support of those post-9/11 family tragedies will always remain his single greatest achievement.
Good luck to Howard Lutnick. And that's "The Riff."
