Wednesday, October 18, 2017

Mnuchin's inappropriate comments

This morning the Treasury Secretary, Steve Mnuchin, suggested that the stock market would decline precipitously if Congress did not pass a tax "reform" plan soon.  What is really just a tax cut plan is still being negotiated and there is much to be done.

Mnuchin should not be playing the role of market forecaster.  I don't know if it is unprecedented for a Treasury Secretary to do this but it is certainly not normal, except maybe in this age of Trump.  Like companies that trade on the exchange, the government should simply disclose its plans and be transparent about what they are doing and know that the market will make its own decision.  There is, in fact, little reason to believe that Mnuchin's prognostication is correct.  The overriding factors influencing the market now are interest rates, continued earnings growth, limited credit erosion, and the lack of beneficial investment alternatives.

Maybe it was just an "ask" from a belligerent boss.  Then again, it may just been another opportunistic move by the Treasury Secretary, always seeking ways to further ingratiate himself and build the plunder.


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