by Doug Wead
MICK MULVANEY, THE MAN WITH TWO JOBS
On July 9, 2019, I interviewed White House Chief of Staff Mick Mulvaney. He is the twelfth White House chief of staff I had met and one of the most impressive. Mulvaney is vivacious, quick, and decisive—traits that any chief of staff must have to survive. We talked for a moment about others who had held this difficult, powerful position. He said he had just met with and talked to John Sununu, the former governor of New Hampshire and chief of staff to President George H. W. Bush. Sununu had been my boss when I worked in the White House.20 He was a strong leader, the prototype for a chief of staff.
Mulvaney said that many former chiefs of staff, both Democrat and Republican, had been available to him, and he called on them frequently. But he was in unchartered territory. No other chief of staff had served simultaneously as director of the Office of Management and Budget, which Mulvaney had been doing since day one of the Trump administration.
The president apparently liked what he saw and kept Mulvaney in both places. It was similar to the arrangement Trump had made for Grisham, although Mulvaney’s positions carried greater power and greater potential consequences. If somebody showed that he or she could do a job well, Trump apparently liked to give that person even more responsibility.
All that made Mulvaney a rare, if not endangered, species. I say endangered because he was integral to the red-hot, high-octane Trump economy. That, in turn, was key to the success, maybe even to the survival, of the Trump White House.
The office of the chief of staff is a suite of rooms located at the southwest corner of the West Wing. One could say that this is the “west wing” of the West Wing, both in terms of its location and of its power. It is right down the hallway from the Oval Office, near Jared Kushner’s office. On the other side, headed in the other direction, one passes the vice president’s office.
The chief’s suite includes an office for the deputy chief of staff, Emma Doyle, and spaces for Mulvaney’s administrative assistants.
I wanted to get the story behind Trump’s economic success and knew that, other than the president himself, no one else could give me a better start. Mulvaney was the perfect person to talk to. We sat down around a coffee table in his office.
“So how did the Trump White House do this?” I asked. “What brought back this economy? And how do you respond when people say, ‘Well, it’s just Obama delayed?’”
That last question literally brought Mulvaney out of his chair.
“I keep a couple of my favorite graphs here,” he said, fishing for a folder off his desk and then sitting back down and plopping it open onto the table between us. “This is it.”21
He spread pages and charts across the table. “Obama’s last budget and their economic assumptions going forward show exactly what they expected,” he said. “This is what they thought they would be able to do.”
He showed their predictions for the gross domestic product for years into the future. They were all in the range of 2.3 percent, which matched what they had been saying publicly at the time. “This was the new normal,” Mulvaney said. “In fact, if you look at other budgets that they wrote, the out years were as low as 1.9, 2.0. They knew that they couldn’t get out of this rut. That is why they started talking about ‘the new normal.’”
That phrase reminded me of one used by President Carter, who in 1979 blamed the then-failing economy on the attitude and ambitions of the American people. He gave a national address talking about a “crisis in confidence” among the American people.22 Pundits dubbed his address “the malaise speech,” although it never contained that word.
Referring to the Obama team, Mulvaney said, “They talked about the graying of the nation. They talked about the slowdown in productivity. They were trying to lessen expectations. It was really about managing the decline of the nation, without actually using that language. They were saying that the nation was no longer a three-percent-growth nation. We had ended that cycle of our history. We were now in a low-growth mode.
“Of course, they looked all across the world, at least at the developed nations, and they saw that. They saw it in Europe. They saw it in Japan and they figured, ‘Okay, that’s the way everybody else is going. So there we go as well.’
“That’s why I think it’s just outrageous when they try to take credit for something that they didn’t think could be done and wouldn’t have known how to do even if they had finally believed it possible.”
Mulvaney cited New York Times columnist and Nobel Prize–winning economist Paul Krugman for having coined one of his favorite phrases on the economy. “He was asked if three percent GDP was even possible; this was in March 2017. He said, ‘No, you could make me total dictator to do everything I think would work and it still wouldn’t get you up more than a few tenths of a percentage point.’23
“Actually, that may be one of the few times that Paul Krugman was right. If he was a dictator, and he did everything he knew to do, he still couldn’t get growth because he wouldn’t know what to do.
“So, it’s just absurd for the Obama intelligentsia to be taking credit for where we are now, because they knew they couldn’t do what we’re doing. They didn’t even think it was possible. They couldn’t even conceive of three percent, four percent growth. They just didn’t have the same type of vision.”
HOW THE TRUMP TEAM TURNED IT ALL AROUND
So, how did the Trump team achieve something that the Obama team didn’t think was possible?
“We deregulated and we fundamentally changed the way that we tax capital production, the creation of wealth,” Mulvaney said. “So, when we deregulated, that was a structural change.
“One of the things people say is that you guys are just using lower taxes like a sugar high. Or they’ll say you increased spending last year. That’s a sugar high.
“I’m like, ‘Okay, those two things are true. But deregulating is a structural change; it pays benefits every single year. If it’s now easier to open a business, it’s going to be easier for you to open your business this year and easier for me to open my business next year. It’s a structural change. If we do a stimulus, for example, it’s just a one-time thing. But deregulation is the gift that keeps on giving towards growth.”
Ah, but wait. Democrats say that you are getting rid of regulations that are needed. How do you answer that?
“There are literally thousands of old regulations that have never been cleared off the books, and others that urgently needed clarification,” said Mulvaney, who cited the “waters of the US” rules and the Corporate Average Fuel Economy (CAFE) standards as examples.
Mulvaney said he once ran a small business and was stunned at the level of regulation involved. “The government would dictate how big the font was on my menu boards, what I had to tell people about the food, and how often I had to do various things in the store. That’s the kind of stuff that people don’t see. It adds only a marginal, very marginal, cost to the way we live around here. But, when you add thousands upon thousands of regulations and red tape, it does make a real difference.
“I never had a small businessman or -woman come into my office, in my six years in Congress, and ask me, ‘Please, lower my taxes.’
“They came in and said, ‘Please, get the government off my back.’
“That’s what we’ve done. That’s a structural change.
“The other thing that we’ve done is we changed the way that that we invest and produce capital. We have made it easier for people to create things, to produce them and to supply them to the market.”
How have you done that? I asked.
“By allowing them preferential tax treatment to invest in their own businesses. If you would make a capital investment in your business, you get to immediately deduct that investment.
“What has that done? It’s done a couple of things. First of all, it’s dramatically increased productivity.
“Look, the GDP is a mathematical equation that you can tie back to many different factors.
One of the ways you can deliver GDP is the number of people working times their individual output. Okay, that is the gross domestic product. They produce.
“There are two factors in that equation, the number of people working, and their personal output. Now, we have had some success that people didn’t think we could have in terms of the number of people working. Our critics said, ‘Oh, the country is graying and you terrible Trump people are never going to increase immigration enough, so you’re never going to be able to increase the number of people working.’ We did it by encouraging people to come back to the workplace who had given up under the Obama administration.
“Then we focused on something else that Democrats never thought possible. We increased productivity again. They thought that those days were behind us. We said no. If we can get businesses to invest in capital, then people are more productive.
“That’s indeed what we see. Productivity has gone up. For example, we gave business an incentive to buy new and better pieces of machinery. What followed was more productivity, more output for that person.
“The GDP goes up. But not only is GDP going up, the economy is growing. It’s done so in what we consider to be a supply-sided growth, which is why we don’t have any inflation.
“Keep in mind, you and I are old enough to remember what inflation is. It is loosely defined as too much money chasing too few goods. In four years in Washington, Democrats and other Keynesians would think, ‘Every time the economy heats up, we have the risk of inflation. People are taking home more money. There will be more demand for goods. Inflation.’
“How do you solve that? You make more goods.
“Go back to the system we created, which encouraged capital investment, encouraged productivity, and encouraged the output of things. You don’t have inflation. You don’t have too much money chasing too few goods. More goods keeps inflation at bay. That is the supply-side phenomenon that people have been talking about since [the influential American economists] Milton Friedman and Arthur Laffer.
“You know, a long time ago, back in the eighties, with Ronald Reagan as a candidate, it was the supply-side revolution that they kept talking about. Well, we were able to do it.
“So, you’ve got an increase in productivity, an increase in GDP, and an increase in wages, because wages tend to go up as productivity goes up. We’ve done all of that without inflation.”
TALKING JOBS WITH JARED KUSHNER
Avi Berkowitz, a deputy assistant to the president, had run Trump Tower Live, the Trump campaign’s Facebook online news report. A Harvard Law graduate, Berkowitz met Kushner in 2017 during a game of pickup basketball at a Passover celebration in Phoenix, Arizona. They clicked, and he soon was regarded as Kushner’s right-hand man.24
I met Berkowitz in the Eisenhower Executive Office Building, an ornate structure located next to the White House. Built in the late 1800s during the Grant administration, it once housed the State Department, the War Department, and Navy Department—all rolled into one.
It is considered part of the White House grounds. Many presidents—Richard Nixon, for example—worked in a suite of offices there while reserving the Oval Office for ceremonial purposes. Eisenhower used the Indian Treaty Room, located in the East Wing of the Eisenhower Executive Office Building, for news conferences.
Berkowitz escorted me to Jared Kushner’s office in the West Wing of the White House, between the Oval Office and the chief of staff’s suite. As a student of history who had once worked in the White House and knew the West Wing, I had long been curious about its configuration under Trump. This was prime real estate. I knew that Kushner’s office would be small, even tiny, but I didn’t know just how cramped and dark it would feel.
I should explain that the White House is always changing. While load-bearing walls remain in place, that is not the case with others. It is not unusual for a White House denizen to return to the building after a weekend away and find that a whole new wall has been built, complete with crown molding and illuminated by newly installed chandeliers. It might look like it could have been built one hundred years ago.
At the entrance to Jared Kushner’s office, we met Cassidy Dumbauld, special assistant to the president and Kushner’s gatekeeper. Cassidy, has an outer, windowless office with two large-screen televisions on the wall behind her desk. She chatted amiably with us for a few minutes before we were invited into Jared’s space. Just as Ivanka had done in her crowded office upstairs, Jared had made room for a conference table in his.
Jared Kushner picked up right where he had left off four months prior, during out last interview, in his Georgetown home. I had the notes right in front of me. He didn’t. So, it was a little surprising that he remembered the exact place where that conversation had ended.
“So, the economy was a very big focus for the president,” Kushner said. “One of the first things he did during the transition, and also during his first weeks and months of the administration, was to start bringing in CEOs. He just wanted to talk with them and get other perspectives. The president wanted to know what they thought. What needed to be done to allow them to create more jobs? He wanted to know what competitive winds they were facing internationally. What were the issues during the last administration that hurt their ability to grow their businesses here in America?”
Kushner noted that a big issue for President Trump was bringing corporations back to American soil, and he explained this. “One of the big issues during the campaign was inversions. A lot of companies were starting to become domiciled offshore. There were tax advantages to do that. The regulatory environment was such that that it was hard for them to make investments in capital expenditures here in the United States.
“So, reviewing regulations was a big focus and an important part of the president’s ability to turn around the economy. Of course, the president believes that we should have some regulations, but not to the point of choking businesses out of existence and destroying entire communities.”
Other members of the administration brought up this same issue. There was a need for balance between cleaning up the environment and creating a chance for businesses to thrive. America’s ability to clean up the environment stems directly from its wealth. This was why other nations coveted American involvement in the Paris accord and other such agreements. Our science, technology, and money were needed to clean up the environments in China, India, and developing African nations. These countries were becoming manufacturing giants and the world’s worst and most toxic polluters.
But there is a limit to how much of a tax burden the American middle class can shoulder without having an opportunity to create wealth for themselves. If America’s wealth were drained, if its roads and bridges were crumbling, if its middle-class tax engine were depleted, how could it help the world battle pollution?
“It’s interesting,” Jared observed. “When it comes to the environment, many companies want to do well and others, obviously, don’t care and need to be reined in.”
During the previous two administrations, this whole process had become a hotbed of legalized corruption. Though one of the administrations was led by a Democrat and the other by a Republican, they followed similar paths when it came to regulating tax inversions. Some companies were held to high standards; others were given exemptions that were inserted into stimulus bills. Such companies essentially paid for their “privilege to pollute” by donating to members of Congress. This process grew during the Great Recession and was justified in the name of job creation.
Some companies bought millions of dollars of in advertising, promoting their corporate commitment to the environment, assuring themselves good media coverage, even though some of them were exempted from laws protecting the environment. They were too big to comply.
Trump’s deregulation effort moved the whole process to a more even playing field and revived free enterprise. It allowed small businesses to get into the game, businesses that couldn’t afford to make massive political donations or big
advertising buys on the television networks. And yet the newly invigorated businesses generated jobs.
“So, we started doing a lot of strategic deregulation,” Jared said. “The president rolled back a lot of the overreaches of the federal government. He believes in a smaller federal government.”
Trump’s deregulation process represented a major change in the way of doing business in America. In some cases, it meant that small businesses could challenge entrenched monopolies. As the mounds of regulatory paperwork required for new businesses were cut, new businesses opened in greater numbers. That, too, meant more jobs.
Perhaps the most significant consequence of deregulation was America’s surprise emergence as an energy-independent nation.
Early in my career as a writer, my conversations with Presidents Ford and Carter sometimes turned to the energy crisis. Both men faced the challenge of what to do about the dependence of the United States on nations in the Middle East, sometimes at moments of great international peril.
For them, the goal of an energy-independent America must have seemed like an impossible dream, and that dream must have continued throughout the Reagan years. Seven presidents were unable to achieve it. Under Donald Trump, once the chains of regulation were cut, America moved rapidly and naturally toward energy independence.
Jared Kushner was impressed at how quickly the change occurred, and how profoundly it has affected the nation. “Within the first two years, America had become energy independent,” he said. “It was critical, both because it developed a substantial industry but also because it decreased our reliance on foreign oil. That dependency had been a major vulnerability for our country. Being energy independent gave America a lot more power. It also brought a lot more wealth into the country.”