At Michael Milken’s annual conference for investment professionals, he crowed to the bankers present that “you should all thank me for your bank stocks doing better.” I cannot conceive of any of the 11 other secretaries I have known making such a statement. Leave aside the question of whether whatever credit is to be claimed should be claimed on behalf of the president. Since when is the stock price of banks the objective or the standard of success for economic policy? And when, as will inevitably occur, bank stock prices decline, will the secretary accept the blame?
It was quite a day.
The secretary also doubled down on his surprising statements of last week by predicting that within years the economy will be regularly growing at above 3 percent. This is not the view of mainstream forecasters, and in light of the very slow growth in the adult population, and reduced immigration along with low unemployment, it would require a productivity growth miracle. He cited no evidence in favor of his views.
The secretary claimed that President Trump’s tax cuts will be the largest in history. Relative to any relevant denominator, like total tax collections or GDP, President Ronald Reagan’s were far larger.
Usually treasury secretaries try to stay out of the president’s personal politics. Yet Mnuchin has made the claim that the president has given more financial disclosure than anybody else. This is ludicrous. Hundreds of officials from presidents on down have made their tax returns available to members of Congress as part of the confirmation process. And for 40 years all presidents have released their tax returns. President Trump has been not the most but the least transparent president in the last 50 years.
There will likely come a time when the secretary of the treasury will need to invoke his credibility to support confidence in the economy, to stabilize markets, or to mitigate an international crisis. Let's hope that when the moment comes Mnuchin will retain some credibility. This will require an end to days like yesterday.