Business markets are unsentimental. Leading investors don’t wear the hats of partisans. And they certainly don’t wear a MAGA hat—an adornment of emotion until President Trump pivots. Risk is measured, rated, and informs real-time investing and relatedly our various accounts of wealth.
President Donald J Trump has decided to restructure international markets for goods and services according to how he prefers them. Because he is President of the United States, he has great influence, and the markets pay attention and at times are frighteningly unstable.
However, there is a crucial “but”. When any powerful entity decides to manipulate wealth markets, they cannot choose the starting point; the overarching markets are shaped by a complex range of forces that were years in the making.
Most international business has for decades been organized around what is generally a free trading framework. Sourcing, manufacturing, logistics, transportation and legal arrangements have been organized around this expansive framework and have generated immense investments and returns for one reason—open markets work. The sum of our buying and selling points the way forward. People who make things listen to people who buy things.
So here we are. The United States has a President who thinks we run trade deficits because we have been treated unfairly. The truth is that on balance our deficits in goods and services bought and sold are fueled by consumption and related debt. Lets face it, we are a consumer-based economy; we buy what we want to buy and often borrow money to do it.
But, and this is the central point. If we choose to protect, we must do so with strategic precision. Countries that retreat into protectionism do not lead anything and especially economic prosperity.
President Bill Clinton’s key political strategist, James Carville, upon assessing the distribution of political power during the Clinton Administration quipped, “I want to come back as the bond market.” When the bond markets raise the cost of borrowing, as is happening in our country, a downward shift is beginning. And political power as Carville noted derives from economic success.
We are 18 months away from a new election and while sentiment in November, 2026 will elect a new House of Representatives, until then watch the bond market. It will be ever attentive, and its signals will not be made up by a clutch of grasping politicians. Fortunately, even so weighty a person as President Donald J Trump, will be forced to pay attention. Political power most frequently derives from economic success.
In the meantime, watch how Republican leaders who control both Houses of Congress deal with our federal debt. If they persist in reducing tax revenue more than expenditures, you will know the Republican Party is not a serious political movement any longer.
Lisa Murkowski
“I am sick to my stomach as the administration appears to be walking from our Allies and embracing Putin, a threat to democracy and US values around the world.”
“We are all afraid.…But we are in a time and a place where I certainly have not been before…..And I’ll tell you, I am oftentimes very anxious myself about using my voice, because retaliation is real. And that is just not right.” Republican Senator Lisa Murkowski, Alaska
Due to her opposition to some of his initiatives, former President Donald Trump pledged in June 2020 to support a Republican challenger to Murkowski, saying: “Get any candidate ready, good or bad, I don’t care. I’m endorsing. If you have a pulse, I’m with you!”
History tells us the Trump candidate will need more than a pulse. Senator Murkowski was challenged in the Republican primary in her home state of Alaska in 2010 and lost. She then ran as a write-in candidate in the general election that year and won. In short, the Senator did not yield to intimidation and was rewarded.
Maybe, just maybe, the crowd that has gravitated to the Republican Party should be attracted to individual courage and independence. They were certainly frontier values.
We always live in times of challenge; that is in the nature of things. But today’s challenges, domestically and internationally, are of a different kind. And many of the most serious ones are technology driven—defined by algorithms most politicians do not understand. Just in case the electorate, regardless of Party identification, wants to navigate successfully the challenges of the day, America needs more than leaders with a pulse.
Gil Maurer
When I departed Washington and government work in 1993, I left behind a world filled with emotion. Governments are led by people who are on missions of one sort or another.
I remember vividly an exchange between two Senators and a government executive on an appropriation to build low-end housing. The question to the housing executive, “how much new housing is needed”—the Senator sitting close by quipped, “how high is up?” This was the kind of exchange that would have resulted in a quiet but knowing chuckle from Gil Maurer.
Gil was a good friend who died recently. The art world, in particular has recognized his passing—he was an artist, collector and leader of arts organizations.
Our work together was at The Hearst Corporation. We were beginning to invest in the rapidly emerging digital media world. This was/is the technology force that has upended much of the analog media world—think newspapers, magazines, broadcast networks and on and on. The adaptive approach Hearst took required answers to very difficult questions: where are the markets going and how long before they disrupt our businesses or worse?
Gil believed in an adaptive strategy. Test your theories, but don’t bet the company. Listen to what the market says about your tests, investments, and move on adaptively.
Gil Maurer was a quiet but deeply insightful presence and I was fortunate to have enjoyed his company and penetrating questions.
Al Sikes is the former Chair of the Federal Communications Commission under George H.W. Bush. Al writes on themes from his book, Culture Leads Leaders Follow published by Koehler Books.
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