What is his management style and how do you describe it?
Well, first of all, it's non-stop. But as many of you have heard me say probably over the past 15 or 16 months, one of my most frequent refrains has been, 'No, sir, you didn't wake me. I'm always awake at 1:51 on a Tuesday night.' President Trump is high impact, high return, high performance, and he is juggling a myriad of things. He has a viewpoint and he pushes it, and he is very good at pushing and pushing and then knowing when to pull back. I think he's put together a great team in terms of the cabinet, the White House staff, and he really sweats us in terms of what he expects.
And what's your management style? Treasury secretaries operate differently. What's yours?
I've been very fortunate to walk into a great building. Everyone had told me at Treasury it's not like a typical DC department. The career staff is great. We have great politicals. People come in — you know, you're probably not fighting the establishment if you're at Treasury. You want to, either in domestic finance, terrorism finance, or international finance, make a difference. My style is to find very smart people and give them lots of room and to have a very iterative process. At the end of the day, we only have four years. What I've tried to do, as I outlined in my speech here and as I outlined a year ago, is substantial financial deregulation — and we have. Not my numbers, but some outside consulting firms think that we've created three trillion of extra lending capacity in the regulated banking system. So my style is to have some very long-term objectives, which I think we're meeting. One was maximum economic pressure on Iran, deregulating the banking system, getting the one big beautiful bill done. It was the same thing I did in my private career — try to stick to the prize, and the prize may not be immediate and not viewed as much. The Washington news cycle is built within an hourly cycle, a daily cycle, a weekly cycle, and we try to ignore the cycle.
Well, I fall in there too, I'm sure. But today the president was in Pennsylvania, the swingiest of swing states, in a swing district. He was talking about the economy at a Mack Truck plant, talking about the big beautiful bill. Yet, when you ask people in any state, polls across the board say they see the economy underwater, that the numbers are not good as far as approval on the economy for the president. Why is that? And do you think it's going to turn around and when?
Well, one thing we're not going to do is what the previous administration did, which was tell people they don't know what they're feeling. This narrative that some journalists have pushed — 'Oh, it's a vibe session. The American people don't know how good they have it' — the American people got torched. There was 21.5% inflation, probably the worst in 50 years, and a big drop in real wages. I know Jason Furman's here tonight. He has an index that measured how working families bundle goods and services — groceries, rent, insurance, car payments — and their inflation was probably 35%. People are still hurt from that. We had a price level change, which is very difficult to bring down. But what I can tell you is, looking at sentiment versus what people are actually doing, we're still seeing consumer spending and no backup in credit card delinquencies. We are working every day to bring inflation back to target. More importantly, get real wage growth. In President Trump's first term, real wage growth for hourly workers did better than management. The bottom 50% of economic households did better than the top 10%. The one big beautiful bill, also known as a working families tax cut, was a home run for working Americans. I'm also in charge of the IRS, and 44% of returns this year took advantage of at least one provision — no tax on tips, no tax on overtime, reduced taxes, only 15% of seniors paying taxes on their social security, and deductibility of auto interest for American cars. I believe we're on the other side of this conflict — gas prices will come back down, inflation will come back to target, and we had seen real wage gains in every month of President Trump's presidency until April.
You've heard the pundits say the reason we're in this negotiating deal is because the administration wants to get oil prices down in time before the midterms.
They're absolutely not in the briefings with President Trump.
Yeah, because — right, again, not you, others want to have it both ways. 'Well, President Trump doesn't care about the inflation, doesn't care about the American people, but he wants to get oil prices or gasoline prices down by the election.' You can't have both.
If you were to characterize the overall mission economically of this administration in an elevator pitch, what is it? We listened to the speech, but what would you say?
Well, a couple of things. One is to restore sovereignty. I've been quoted many times as saying the only good thing about COVID was it was a beta test for what could happen if we were to get into a hot war with another major nation. We are bringing back critical industries, we are deregulating and letting the economy go, and we are pushing innovation and economic freedom.
Behind the scenes, there have been reports that you get a little fiery. There's a new book out that suggests there's another incident. There was something with Bill Pulte. What's the behind the scenes with Scott Bessent and other members of the administration?
Look, I think I've been described as having a long fuse, but when the powder keg blows, you don't want to be near it. I think it's important to make one's opinion known, but as I've said too, it's not unlike a sports team where you can have disagreements in the locker room, but when you get on the field, you want to do your best. I think we're all pulling together very well.
What's something that we're not covering a lot of that you're proud of as far as your job up until now?
Look, I think what we've seen in terms of the banking system — I am a big proponent of small and community banks. I've met with hundreds of those bankers in the past year. I am proud to say that I am an economic historian, not an economist, and having studied the patterns of financial traumas like we had in '07, '08, '09, there's always an overreaction. We overreacted, and the financial straightjacket for our regulated institutions became much too tight. Private credit is a regulatory arbitrage — it's a great innovation, but what always worried me about private credit was that you wouldn't be able to use it in a downturn to restart the economy. Whereas if we had a downturn, the Fed chair and I would be able to use the regulated financial system through window guidance, through opening windows, through facilities to restart the economy. I think reinvigorating the regulated financial system from the GSIBs to community banks is something that has gone unnoticed.
Two more quick things. You mentioned the Fed chair — there is a new Fed chair, Kevin Warsh. Rates stayed the same this past time. The president has been very vocal that he'd like to see interest rates come down. In this environment, where things stand now, do you think there is increasing pressure on Fed Chair Warsh to drop rates, even though it might not be possible?
I am confident that the Fed chair will optimize the path for both inflation and economic growth. The president said at Chair Warsh's swearing in that he would be independent, that he should do what he wants. The president understands — he and I have talked about it quite a bit — that the bond market has taken out more governments than howitzers. I believe he has complete confidence in the Fed chair to do the right thing.
Last thing — the Trump accounts. This is something that I don't think a lot of folks fully have appreciated or taken advantage of. Is that fair?
