Putting the hedge fund fox in charge of the Trump administration’s communications is the surest way to drown out regulatory noise from Liz Warren, Bernie Sanders and the usual anti-industry suspects.
Anthony Scaramucci has always been able to straddle the gulf between modern Wall Street and the Main Street voters. That’s a rare talent in itself.
Every advisor could learn from his jargon-free, back-to-basics messaging. And now that he’s got an office in the White House, his talking points will mesh with official policy as well.
After all, the Goldman Sachs alumni currently in the presidential office are big-idea guys and number crunchers. Scaramucci is all about making the sale and, when necessary, making headlines along the way.
He knows television. He knows how the media sausage is made. When he sees a vulnerability like the time CNN blew it reporting meetings with Russians that never actually happened, he jumps.
For critics of the White House economic platform, that’s a huge problem. Because now there’s somebody who can cut through the Beltway haze and take the arguments directly to the public — in terms that make sense.
The regulator’s nightmare
Unlike just about every pundit on Capitol Hill, Scaramucci has first-hand experience with the way risk and return actually work.
From his perspective, raising the compliance burden in the wake of the 2008 crash hasn’t made retail investors safer. All it’s really done is make it harder for money managers to do their job, compressing real returns without smoothing long-term risk.
He’s argued the case against the Labor Department’s “fiduciary” standard in particular in the Wall Street Journal and on TV, armed with on-the-ground facts about the industry that never seem to make it into politicians’ press releases on either the pro or con side.
Liz Warren, for example, doesn’t really care what your business model is or how your certifications work. As far as she’s concerned, you’re either a fee-only saint or you’re an active parasite on hard-working people, with no real room in between.
Or take Chuck Schumer, who loves Wall Street in the abstract but doesn’t spend a lot of time figuring out what really makes the industry tick. He’ll sign anything that gets him attention.
Granted, this isn’t strictly a Democrat problem. Long-time readers know I’m no fan of Paul Ryan and others on the other side of the aisle clouding the conversation whenever they show how little they really understand the current regulatory landscape, much less try to make changes.
None of them have run a fund. None have worked with intermediaries to gather assets. As Scaramucci has put it in the recent past, “these people in Washington have no money.”
And what he sees is a system that’s stagnated over the last decade. He can back up his observations with actual data, come up with cost-benefit calculations that may be anecdotal, but they’re still a lot more real than anything Washington has been able to communicate in an extremely long time.
If all goes well, the money management industry is finally getting a real high-profile advocate here who can make the case against regulation and for advisors — in clear English — and let the public judge the facts.
Investor relations
Of course I suspect the DOL rule will remain a footnote for Washington one way or another. Either Scaramucci will make the case fast or he’ll be put to work making sense of other aspects of the Trump economic agenda.
Communicating economic realities has been difficult for previous administrations. In a past life, I’ve had to help them boil down big fiscal abstractions into concrete narrative terms, and even then the results went over too many heads.
You’ve probably wrestled with similar challenges translating your knowledge of market reality into stories that resonate with clients and prospects. If a story doesn’t click, you just need to try again.
Scaramucci may be a hedge fund guy, but I’ve never seen him get bogged down talking about Greeks and other high-level math. Even at the SALT Conference — I had meetings in Vegas at the time and snuck in for a few sessions — it’s always simple stuff packaged for the sales team.
It’s been a really long time since we’ve had a communications team at the White House who can talk to the economists and translate for the public. And since it looks like Mnuchin and the Treasury team aren’t eager to engage, it’s up to Scaramucci to step into the gap.
At this point, we need someone who can explain how we get from nebulous campaign promises to real GDP expansion, paying down federal debt and making entitlements work.
Scratch Scaramucci, I think you’ll find someone who knows what drives Main Street. He’s gone on record arguing that labor needs a richer slice of the overall economic pie, if nothing else because nobody really wants to live in a mansion surrounded by barbed wire.
That’s an argument Liz Warren and Bernie Sanders make all the time, without a lot of specifics beyond selling the mansion and redistributing the proceeds. Right now they own that argument.
But if Scaramucci can marry a message like that to what the White House has been trying to get across over the last six months, he can preempt the opposition’s biggest talking points and actually win some friends.
After all, they’re academics. Previous Wall Street communicators were political operatives. He’s a salesman.
And as CNN learned, he’s a salesman with teeth. If something’s obviously out of kilter in the reporting or in the message itself, we know he can and will push back.
At this point, the administration is on the defensive far too often, with staff shrugging at press briefings and rejecting reportage they don’t like without engaging with how it went wrong.
When Scaramucci sees “fake news,” he knows how to punish it. That’s probably in the background of why Trump brought him onboard at last. I think he’ll put that expertise to work.
