Bannon goes belly up, and the stock market soars
Bannon never really understood the incentive model of growth. Rewarding entrepreneurs is the key to prosperity. In this sense, everybody's in the same boat.
Bannon was also lukewarm on the corporate-tax-cut package. He never bought into the argument that slashing taxes for large and small businesses predominantly benefits wage earners. In fact, everyone benefits: the upper, middle and lower classes. It's called making the pie larger.
Late one afternoon, Bannon tried to make a deal with Moore and me in his office. "If you guys back my 44 percent top tax rate, I'll support your 15 percent corporate tax rate," he said. We wouldn't buy it. It made no sense for economic growth.
The fact that Bannon would see us frequently speaks well of him. He was always accessible, friendly and good-humored -- even in debate. I enjoyed our friendship. He's been welcome in our Connecticut home. My criticism of his policies is not personal.
That said, backstabbing the president and his family in a book -- "Fire and Fury" by Michael Wolff -- was a terrible mistake. As a result, his political career has gone up in flames.
The market's up, and Bannon's down. There's a connection.
Bannon is not only opposed to pro-growth tax-rate relief. He's a fierce ultra-protectionist. He wants higher tariffs and no new trade deals. He has argued that the Chinese are guilty of currency manipulation and must be heavily penalized. But the Chinese yuan has appreciated substantially in recent years. So, by implication, Bannon was arguing for a cheaper dollar.
Well, no country ever devalued its currency into prosperity.
You know who gets hurt most by tariff taxes? The middle class, for it pays much higher prices for daily living needs. All manner of businesses also suffer, as imports are choked by the tariffs and quotas.
Bannon even favored the border adjustment tax, which would have jacked up import prices. But favoring high tariffs and a crumbling dollar was his worst economic mistake.