In one of the interactive exhibits at Mount Vernon, George Washington’s home in Virginia, you’re asked to flip open the doors of his “cabinet,” each of which contains a portrait of its members — Secretary of State Thomas Jefferson, Secretary of the Treasury Alexander Hamilton, Secretary of War Henry Knox and Attorney General Edmund Randolph. As I opened the drawers, I couldn’t help but think of how one 19th century journalist crystallized America as “a nation created by geniuses to be run by idiots.”
Those words are as true today as they were two centuries ago, maybe even truer. You wonder what Washington and Hamilton would’ve thought of the current stock market rollercoaster ride — which was in part created by Wall Street naiveté, otherwise known as greed; President Donald J. Trumpet’s narcissism; and Secretary of the Treasury Steve “Moochin’” Mnuchin toadying up to his boss.
At first it appeared that Wall Street and Donnie Two Scoops —native New Yorkers — would enjoy a symbiotic relationship. Hair Furor would deregulate and cut taxes and the Street would make oodles of money for the Donald and his — well, friends would be too strong a word, but you get the idea. As Megan McArdle wrote in The Washington Post Dec. 26, the Street was willing to trade the possibility of tariffs and immigration reform for the reality of lower taxes in the hopes that the tariffs and reform would never happen. It was a dance with the devil, and we all know how that ends. One day, the Street woke up and realized, “OMG, Donald Trump is president of the United States.” That was a bad day that has been followed by many bad days.
Because a narcissist can never be wrong and thus always needs a fresh whipping boy and sycophant, an infuriated Trump — who had identified strongly with the market’s rise last year — fired up Twitter to berate Federal Reserve Chairman Jerome H. Powell and then directed Mnuchin to rally the troops. So Mnooch — on a golf vacation in Mexico — called up the heads of the six largest banks. Question: Why is an administration that has always shown disdain for Mexico always in Mexico?
But we digress. I’m sure JP Morgan Chase’s Jaime Dimon was spending Christmas thinking, “Gee, I wonder when Steve’s going to call?”
Instead of reassuring the markets, all Moochin’ did was imply there was something wrong with the banks — shades of the Great Recession — when nothing could be further from the truth. As Catherine Rampell wrote in the same edition of The Post, “The whole episode was like going to your doctor for a heart attack and being told not to worry, because he knows how to treat brain cancer.”
Back at Mount Vernon, I was struck by the calm, the security, the sheer rationality of Washington’s words and actions. Rationality has become a dirty word. Now it’s all about going with your gut and telling it like it is, code for a completely unfiltered life. But all that’s done is created a market, a populace and a nervous system that bounces around like a knuckleball. Will incoming Speaker of the House Nancy Pelosi and the Dems make a difference? It’s hard to imagine they’re going to take holding government workers hostage to get more money for a wall on the southern border lying down.
When it comes to the Street, however, Washington doesn’t call the shots. The Founding Fathers made sure of that when they established separate financial and political capitals. Trump is learning that he can’t control the Street anymore than the Street can control him.