Lion of the Blogosphere

What does the Treasury Secretary do anyway?

with 54 comments

A very good question, and I’m not sure that the Forbes article, Who Is Trump Pick Steven Mnuchin & What Does The Treasury Secretary Do Anyway?, really answers the question.

The most important sub-agency under Treasury is the IRS, but I am not aware that previous Secretaries got into the nitty-gritty of directing changes in IRS regulations and enforcement. The subtleties of the more complicated tax regulations are too technical and complicated for anyone who has not spent years practicing tax law to understand.

It should be noted that the Federal Reserve Bank is a federal agency that is not part of Treasury but rather is set up to be quasi-independent from the Executive Branch.

Steven Mnuchin himself is a guy who had a big head start in life by being born to a rich Wall Street father who worked at Goldman Sachs, and then got into the business himself, also working at Goldman Sachs (it’s great to have connections) and later managing his own hedge fund. Then he got bored being a rich Wall Street guy and got into producing movies.

I’m not sure why Mnuchin wants to give up producing movies for the thankless and very low-paying (compared to what he’s used to making) job of Secretary of the Treasury.

* * *

The United States has a huge and growing debt, and the Treasury Department determines how to borrow more money and make payments on the debt.

Written by Lion of the Blogosphere

November 30, 2016 at 11:30 am

Posted in Politics

54 Responses

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  1. I don’t know what the job description of Treasury Secretary is, but I assume it’s like the UK Chancellor of the Exchequer. Our Chancellor is responsible for oversight of the government’s budget deficit and sets tax and spending policies accordingly. Although credit for these in the US might go to the President, in practice all the work will be done in the Treasury. It’s a large job. In terms of why Mnuchin wants it, we have many examples in the UK of rich bankers taking prestigious government jobs (a) to enhance their reputation in society, given they only made their money from value transference, (b) to give something back to society and (c) because they’re so egotistical that they think they’ll make the world a better place by working in government.

    The lioncub

    November 30, 2016 at 11:47 am

    • I don’t know what the job description of Treasury Secretary is, but I assume it’s like the UK Chancellor of the Exchequer. Our Chancellor is responsible for oversight of the government’s budget deficit and sets tax and spending policies accordingly.

      The responsibilities are comparable.

      The primary difference is that the public profile of Chancellor is far greater than the profile of Treasurer.

      In the UK the role is considered the last stepping stone to becoming Prime Minister. This gives the office a politically charged relevance that our Treasurers usually don’t attract. In America the Treasurer out of necessity is of best use as a quiet bureaucrat because he isn’t elected by any constituents and because he often has to coordinate passing a budget with a Congress controlled by the opposition party. And even when Congress is run by the same party he needs to have fine bureaucratic and negotiating skills to get anything done.

      The British Chancellor by contrast has less difficulty passing a budget because the Commons is always controlled by a majority of the PM’s party or a coalition of parties allied with the PM.

      Former Treasurers do enjoy many perks but they usually take the form of value transference positions in the private sector, not political power and certainly not the presidency.

      The Undiscovered Jew

      November 30, 2016 at 5:59 pm

      • Chancellor also controls the regulators much more directly. He will hire a Central Bank governor and appoint heads to the FCA, the markets regulator.

        If the Chancellor is bought by the industry….he can do a lot more damage than the Treasury sec.

        The Philosopher

        December 1, 2016 at 7:17 am

  2. I’m not sure why Mnuchin wants to give up producing movies for the thankless and very low-paying (compared to what he’s used to making) job of Secretary of the Treasury.”

    He’s worth 140 million. Maybe he’s already rich enough? Once one reaches “critical mass”, what one earns from their career is less than what one earns from their investments. Then it would make sense to step side and focus on things one wants to do. Case in point, globalists made a killing after Trump was elected. So why didn’t they support Trump? Because once one has enough money they want more power not more money.

    destructure

    November 30, 2016 at 11:48 am

    • “globalists made a killing after Trump was elected.”

      You mean in the last three weeks? How do you know that? Is there a source I can read on this?

      Cole Haight

      November 30, 2016 at 12:32 pm

    • Once one reaches “critical mass”, what one earns from their career is less than what one earns from their investments. Then it would make sense to step side and focus on things one wants to do… once one has enough money they want more power not more money.

      Though far, far from critical mass, once I hit $1 million net worth, I found it increasingly harder to get motivated to go to my decent, low-stress, not-intolerable corporate job. On almost a daily basis, I crunch the numbers to see how and when I can cease working. Today, I went to lunch at 10:00 am and knocked off for the day at 3:00. And spent most of this short workday on-line researching different types of residential roofing. I read endless articles on early retirement and “best retirement cities.” In the not-too-distant future, I look forward to endless days of leisure, not power. I’m trying to become invisible at work. I feel somewhat guilty at this period of under-producing. In the meantime, I’ll fatten my nest egg for a little longer.

      E. Rekshun

      November 30, 2016 at 5:05 pm

  3. So we have a reality TV show star as POTUS who picks 2 movie producers – one as his closest advisor, the other as the money man in his cabinet.

    A precursor to “Trumpapalooza -The Greatest Show on Earth” perhaps? The reality show to end all reality shows – running all day, every day.

    gda

    November 30, 2016 at 11:49 am

  4. The Guardian has a sub heading implying he says he’ll enact the biggest tax change since Reagan. Getting increasingly nervous about anyone even vaguely associated with the GOP invoking Reagan.

    Jesse

    November 30, 2016 at 11:52 am

    • Tax cuts need to be part of the plan for keeping the economy afloat. It is Japanenomics: tax cuts and bridges to nowhere to avoid making the needed structural changes to the economy.

      Tax cuts also help bring the GOPe on board and can play well with middle class whites.

      Otis the Sweaty

      November 30, 2016 at 1:05 pm

      • We need to make it easier for people who make under 50K per year to pay taxes. The current system is make-work insanity. If you’re employed by a company you don’t need to fill out a tax form. You only need to fill out a form if you’re self-employed.

        I can’t stand how efficiently Japan is run. It bugs me. Here you’ve got a major industrial power, and they do sensible things.

        gothamette

        November 30, 2016 at 9:01 pm

      • The current system is make-work insanity….

        I can’t stand how efficiently Japan is run. It bugs me. Here you’ve got a major industrial power, and they do sensible things.

        As you say it’s make-work.

        America has a huge population of employed lawyers, accountants and government desk-warmers.

        Japan not so much.

        Same with our bloated welfare system. The money isn’t just being handed to poor people. The welfare dollar finances the jobs and pensions of millions of people who are to a great degree useless.

        “Efficiency” in economic terms means people losing their jobs and benefits, less consumers etc.

        Rifleman

        November 30, 2016 at 11:55 pm

  5. Treasury secs determine the nation’s financing and bond issues, oversee financial regulation and oversight (or in the last 3 decades, not do that) and have an input on trade deals and general budget advisory specialisations.

    Now, the IRS bit is very worrying. Obviously a phone call from the Caymans to Steve could mean a defunded tax evasion investigation or easing on corporate tax dodging.

    The Philosopher

    November 30, 2016 at 12:24 pm

    • Enforce separation of commercial and investment banking and then instruct the Attorney General to only enforce financial contracts that are collateralized with unambiguous ownership of real assets. Then use the printing press (as in actual physical dollar bills) to make good on only FDIC insured accounts as the banks collapse and enter liquidation. Then begin anew on solid footing with the financial economy tied to the real economy for the first time in four decades.

      Andrew E.

      November 30, 2016 at 12:56 pm

      • Some men just want to watch the world burn.

        Two in the Bush

        November 30, 2016 at 1:40 pm

      • Yeah good idea. Another idea is to force ibanks and broker firms to be partnerships like they were rather than limited co’s and have partners personally responsible for bad gambling, rather than taxpayers and shareholders (i.e. the public pension funds/insurance cos and long only retail funds).

        The Philosopher

        November 30, 2016 at 1:46 pm

      • Yes, enforce separation of commercial and investment banking and then also require investment banks to revert back to private ownership.

        Andrew E.

        November 30, 2016 at 2:48 pm

    • You mean like Lois Lerner at the IRS going after government enemies then getting retired with a fat golden shake once the evasions and cover ups got too embarrassing? (Destroying emails was item one, as usual.)

      “DOJ closes IRS investigation with no charges”

      http://edition.cnn.com/2015/10/23/politics/lois-lerner-no-charges-doj-tea-party/index.html

      It helps to have a dirty DoJ on your side, of course. What a pity Hillary didn’t win and Loretta Lynch couldn’t continue being an inspiring example to us all.

      Glengarry

      November 30, 2016 at 12:57 pm

  6. Lion:

    Steve Sailer has a thread going, “Larry Summers 101,” sparked by a NYT piece which complains that women law grads are not getting enough jobs compared to men. Based on my experience in the ’80s and ’90″s, this seems highly unlikely, and just another example of SJW phony facts. The argument over there is tending toward, “well, men just do better at the right tail of the LSAT,” but no one seems to get that elite law schools are chock full of women. You should leave a comment.

    mel belli

    November 30, 2016 at 12:30 pm

    • It’s a case of women being, on average, better students than men, but at the extremes there are always more men because the ability distribution for men has a slightly higher standard deviation.

      Lion of the Blogosphere

      November 30, 2016 at 1:21 pm

    • My sisters best friend, a young woman, is graduating Law School soon and already has a job lined up at a firm where she will be making a starting salary of $160k. I think women lawyers are doing just fine.

      Otis the Sweaty

      November 30, 2016 at 1:23 pm

  7. Can somebody please explain to me why liberals hate Cory Booker so much? On NeoGaf they are just dismissing him out of hand.

    If Booker is out, than Kamala Harris is the nom as the blacks will just bloc vote for her in the primaries. I can’t believe that any white people will seriously even bother running.

    Otis the Sweaty

    November 30, 2016 at 12:59 pm

    • This is a great question, and I don’t know the answer, but I suspect it has something to do with the fact that he is almost certainly gay and blacks hate gays worse than hitter.

      Two in the Bush

      November 30, 2016 at 1:42 pm

    • Because he’s a cuck.

      People think cucks only exist on the repub side, but if you whore for the Street and want to start wars and love trade deals you’re a cuck, not a democrat.

      Ryan, Schumer, Booker, Clinton, Bush and McCain are all the same party. The Cuckold Party.

      Liberals and libertarians/nationalists have a parasite party sucking them dry.

      The Philosopher

      November 30, 2016 at 1:48 pm

      • I think you can make a distinction between socialists/leftists and SJWs as well. I’m a socialist on economics broadly, but find the identity politics stuff to be toxic.

        Funnily enough so did millions of others.

        The Philosopher

        November 30, 2016 at 1:50 pm

      • aren’t all of them just rich people looking out for their own interests? if they were advocating for their own money to be taken and redistributed to blacks, then they would be cucks

        gm

        November 30, 2016 at 6:16 pm

      • Cucks don’t argue for redistribution to blacks.

        They argue for redistribution from the middle class to the rich, but they never actually say that so they say things like ‘social security reform’, ‘labour market reform’, ‘cutting regulations’ etc.

        Frank Luntz has poll tested all these vague terms and technocratic phrases.

        The Philosopher

        December 1, 2016 at 7:11 am

  8. Off topic, but a City Solicitor in Philadelphia has been identified as the blazer clad spraypainter of “F**k Trump” on the side of a an upscale grocery store. This happened in Chestnut Hill which is an extremely tony, old-money area in the city’s far northwest. This guy (Duncan Lloyd) is a wasp who went to Germantown friends and UPenn and is a lawyer for a Democratic machine moonlighting by vandalizing bourgeois grocery stores in wealthy neighborhoods. The new Democrats…enemy of the working man. You really cant make this stuff up.

    roxborough's son

    November 30, 2016 at 2:49 pm

  9. some anti Pelosi feeling on DKos.

    I don’t like her, but I think Pelosi has done an okay leadership job. Dems might as well stick with her, I think. Getting a new leader isn’t going to change the fact that the Dems hate white people and the Dems will never be able to retake the house unless they give up on the “kill whitey” stuff.

    Otis the Sweaty

    November 30, 2016 at 2:50 pm

    • Pelosi is a rich socialite. Her staying in her job is good for the populist-patriot movement, which I now call the alt-right, since the alt right is now, like the Wicked Witch of the East, most sincerely dead.

      But yeah, the truth is that the Tim Ryan wing of the Dem party is in the process of joining the Wicked Witch of the East. Or was it the west? The one that Dorothy’s house fell on. I could never remember.

      gothamette

      December 1, 2016 at 7:44 pm

  10. Looks like all the hand wringing in these parts, and others, about Trump’s “stupid tax cuts for the rich” was much ado about nothing as I said here back in May and earlier:

    The eventual reformed tax code Trump signs into law can have the top marginal rate come down from 39% yet have the rich end up with a higher effective tax rate.

    https://lionoftheblogosphere.wordpress.com/2016/05/09/trump-disavows-his-bogus-tax-plan/

    Here is Trump’s future Treasury Secretary on tax cuts for high earners:

    “Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper-class,” Mnuchin said on CNBC. For example, he said they’ll cap mortgage interest deductability.

    In other words, rich guys Mnuchin (estimated net worth $40 million) and Trump ($3.7 billion) called for capping government benefits for rich people.

    http://www.washingtonexaminer.com/rich-republicans-call-for-not-giving-a-net-tax-cut-to-rich-people/article/2608536?custom_click=rss

    Andrew E.

    November 30, 2016 at 5:52 pm

    • Traditionally, what you and I see as loopholes or tax expenditures for the rich, the Republicans see as fast ones that they pulled on the Democrats.

      I can only hope that attitude changes under the Trump administration.

      Lion of the Blogosphere

      November 30, 2016 at 5:58 pm

    • Mnuchin has $40M plus another $97M in CIT Group.

      destructure

      November 30, 2016 at 8:46 pm

    • Well, we see what plan it is he put forth. You can actually use math to see what a tax policy will do to effective tax rates. To be fair, under Obama, effective taxes on the rich did go up, so a lot of harassment he receives from the left as a corpobot cuck needs to be tempered.

      The Philosopher

      December 1, 2016 at 7:14 am

  11. Treasury secretary is just a functionary. He just manages the mechanism for selling treasury bonds and supervising the IRS. He doesn’t make policy. Real economic policy is made by the Federal Reserve Bank.

    I wouldn’t even consider the Treasury secretary to be in the inner circle of power in the administration. The real power lies with the Chief of Staff, Attorney General, National Security Advisor, Secretary of Defense, Head of Joint Chief of staffs, Domestic policy advisor, Legal Advisor, and Foreign Policy Advisor. Romney would have made an excellent Treasury Secretary.

    The Fed is the power behind the economy, but their power is not limitless. They can set interest rates at whatever number they want but ultimately the market sets the true rate. Unnaturally low Fed interest rates distort the economy in so many ways. The public does not receive any benefit from these low rates. Eg. low interest rates just lead to higher housing prices so their is a wash. The homeowner pays a lower rate on the mortgage but the mortgage is that much greater. Fed money is given to banks who use almost all of the largesse to speculate on assets rather than lending to productive businesses , raising the price of core assets and services that American need to maintain the merest middle class life: Housing, Automobiles, Health Care, Education. There is no way that the Fed honestly calculates the rising costs of these assets and services in the consumer price index.

    That said, if I were a bank I wouldn’t lend money to productive businesses either. Americans are tapped out. Wages are too low, and their personal debt is so high that they really can’t afford much more than a little bling: big tvs, iphones, vacation to the caribbean.

    Regarding Mnuchin, he did those people a favor by foreclosing on properties, whose mortgage and tax payments were driving them into penury. These “homeowners” were so deep in the hole that default on their loans was inevitable. Better sooner so that they don’t throw good money after bad money. They can start afresh, this time with a little more prudence.

    Daniel

    November 30, 2016 at 6:41 pm

    • Also note that higher housing prices cause risk by themselves. On the positive side, we get nicer places to live.

      Agreed that the economy is overfinancialized, overbanked, overindebted.

      Glengarry

      December 1, 2016 at 7:27 am

  12. Your girl looks stunning on Chris Matthews tonight. Wow.

    Simba of the Blogosphere

    November 30, 2016 at 7:19 pm

  13. Lion: can you do a post on A) Will sanctuary cities cave when Trump cuts their funding and B) how will residents of sanctuary cities react when their taxes go up and services get cut for their communities privilege to harbor illegals?

    In my experience, the true believer left are extremely passionate about open borders and would never compromise on it, but the rank and file SWPL liberal retard doesn’t really care about immigrants and would never agree to pay more taxes for anything, certainly not to protect immigrants. I wonder if they will force their mayors to turn in the illegals.

    Otis the Sweaty

    November 30, 2016 at 7:26 pm

    • I can’t even predict that Trump will really carry that out. Too much to hope for.

      Lion of the Blogosphere

      November 30, 2016 at 7:52 pm

      • Deporting three million criminal aliens, cutting all federal funding to sanctuary cities, empowering local/state police to enforce federal immigration law, encouraging self deportation, and building the wall are all doable things in the first 1-2 years of a Trump administration.

        redarmyvodka

        December 1, 2016 at 6:10 am

  14. Leon — “I’m not sure why Mnuchin wants to give up producing movies for the thankless and very low-paying (compared to what he’s used to making) job of Secretary of the Treasury.”

    Found the answer. According to this Bloomberg article, Mnuchin got $97M in CIT Group last year. He can’t sell it without paying a huge tax bill. But there’s a loophole that will allow him to sell it tax free.

    http://www.bloomberg.com/politics/articles/2016-11-14/trump-advisers-said-to-recommend-mnuchin-for-treasury-secretary

    “If Mnuchin is confirmed for the Treasury role, it could save him millions in taxes. A 1989 rule allows him to sell stock tax-free if he reinvests the proceeds in Treasuries or in government-approved funds. The loophole was designed for executives who need to sell shares to comply with conflict-of-interest rules.”

    destructure

    November 30, 2016 at 9:21 pm

  15. Steven Mnuchin’s motivations are pretty clear. Very wealthy men become Hollywood producers because they want to meet & date starlets.

    Mnuchin recently got enaged to Louise Linton.
    http://www.imdb.com/name/nm2325602/

    So I expect she’d like him to find a new job.

    As a bonus Linton’s autobiography about her volunteer work was attacked in the press as a racist white saviour story. https://www.washingtonpost.com/posteverything/wp/2016/07/06/louise-linton-just-wrote-the-perfect-white-savior-in-africa-story/

    So she’s not a big fan of the press right now. Most candidates would have trouble explaining the pay cut and the press mockery to their wives. She probably pushed him to take the job.

    Thagomizer

    November 30, 2016 at 9:40 pm

    • Mnuchin recently got enaged to Louise Linton.

      Obviously they married because they love debating what is the best measure of corporate debt ratios over dinner.

      The Undiscovered Jew

      November 30, 2016 at 11:45 pm

    • Mrs. United States Secretary of the Treasury:

      The Undiscovered Jew

      November 30, 2016 at 11:49 pm

    • Linton spent 1 year in Africa….

      She died her hair platinum blonde…..

      She wasn’t volunteering…..

      The Philosopher

      December 1, 2016 at 7:12 am

      • Disgusting. Her so called “husband” is getting another man’s leftovers.

        I heard white women with jungle fever are stigmatized & keep it hidden.

        redarmyvodka

        December 1, 2016 at 11:30 pm

    • How ironic since the same people have been worshipping the black savior in America since 2007-2008.

      Glengarry

      December 1, 2016 at 7:29 am

    • How ironic since the same people have been worshipping the black savior in America since 2007-2008.

      It is unfortunate that Anglo elites such as Linton put Obama into the White House but the Jews corrected their mistake by taking control of Trump’s far-right nationalist campaign.

      Jared Kushner says you’re welcome asshole and get ready to kiss Netanyahu’s ring.

      The Undiscovered Jew

      December 1, 2016 at 5:25 pm

      • The problem wasn’t that Obama was elected because after the Iraq war and collapsing economy the GOP was going to be crushed either way in 2008. Obama’s first term was okay he was vastly better than the alternatives although it was obvious he had no record to stand on and was already drifting into SJW mode. The choice in 2012 was clear and America made the wrong choice…….

        redarmyvodka

        December 1, 2016 at 11:40 pm

      • The choice in 2012 was clear and America made the wrong choice…….

        Romney would have very likely lost to Hillary in 2016. He would have also lost the popular vote and failed to make the breakthrough Trump did in the Rust Belt.

        In odd way we might be better off with Romney losing to pave the way for Trump four years later.

        The Undiscovered Jew

        December 2, 2016 at 7:04 pm

  16. I’ll tell you this…I thought it would be a lot longer before Trump’s actions made the people who elected him think twice/have doubts.

    Klambake

    December 1, 2016 at 7:12 am

    • Who has doubts? What he’s done since the election supports my belief that he intends to act on the issues important to me. I’m very optimistic.

      destructure

      December 1, 2016 at 10:04 am

      • I’m a little concerned that Kobach hasn’t been appointed to DHS yet. Feel good about the other picks.

        Otis the Sweaty

        December 1, 2016 at 12:38 pm

  17. I’m not sure why Mnuchin wants to give up producing movies for the thankless and very low-paying (compared to what he’s used to making) job of Secretary of the Treasury.

    Because it’s arguably the most prestigious position in the cabinet, and the only one that gets your name and signature on the currency. He can go back to producing movies after a few years.

    David Pinsen

    December 2, 2016 at 3:25 am


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