As painfully clichéd as it is to say, it really does seem as if Trump has built his inner circle with an Apprentice-like dynamic of two competing teams.
As Axios described it this weekend in a useful article, the dynamic is pitting “confrontationists v. conformists.” The confrontation side is led by Steve Bannon, Jeff Sessions, and Stephen Miller, while the conformists are led by Reince Priebus, Jared Kushner, and most of the cabinet that weren’t in the trenches during the campaign (Tillerson, Mattis, etc.) (I find Axios useful here because it was started by one of the Politico founders. While they shouldn’t be seen as a go-to for policy analysis, it is a great source for Beltway gossip.)
The confrontationists have an uphill battle for two big reasons.
1. They are outnumbered. Much of the other campaign staff has been dispersed inside various departments in below-cabinet level positions. For example, John Mashburn – one of the great Senate conservative bomb throwers – is placed highly in the Justice Department, but probably not high enough to regularly get in Trump’s ear. Most of the people added since the campaign have been those with the sort of gravitas that Trump likes to surround himself with. While most are undoubtedly accomplished, if they truly wanted to overthrow the table they would have been on board before November.
2. Every misstep by the confrontationists becomes the story of week for the media, whereas every misstep by the conformists blends into the status quo. The best example is how the media treated the immigration executive order compared to the military raid killing children in Yemen. (This still got more play than Obama’s term, but obviously not as much as the other.) Further examples are the amount of liberal pressure on Betsy DeVos compared to Steve Mnuchin.
Bannon clearly understands this, and has tried to go on the offensive. While bashing the media, he has also been aggressive playing it. He has been hiring his own communications people within the West Wing, including former Breitbart members, and has been using it to plant stories in various publications. Luckily the demand for copy and clicks means Bannon can bash the media as much as he wants and still get his side out, but he is never going to be given the benefit of the doubt in the press.
Bannon and Miller have clearly prioritized Trump’s signature campaign issue in the early days, immigration. This makes perfect sense given the natural ally in Sessions. Bannon is also obviously interested in establishing a foothold in foreign policy, which explains his seat at the table in the National Security Council. Unfortunately Bannon’s world view here is a bit less-than-ideal, he does have a record of more hawkish statements in regards to China and the Middle East, but it’s easy to take those positions when you’re not in the position he is now.
It will be interesting to see how the situation with Michael Flynn, regarding his direct talk with Russia over sanctions, resolves itself. Stephen Miller was sent out to the Sunday talk shows without anything to say regarding Flynn, which is probably a bad omen for the NSA director. Flynn was in the confrontationist camp, if he’s out it further weakens Bannon’s ranks there.
Perhaps most alarming is that all of this has pretty much given the conformists a free run in economic policy. After all, while Bannon’s economic understanding, particularly his views on bailouts and crony capitalism, is pretty strong from a libertarian standpoint (his desire to politicize jobs created by infrastructure projects aside), he can’t be everywhere and the rest of “his people” have specialties outside economics.
Given all of the recent Bannon press, I don’t think it’s a coincidence that both the New York Times and Wall Street Journal ran profiles on Gary Cohn this weekend. My guess would be that this is a sign to the markets that “don’t worry about the immigration executive order, or Trump’s tweets, the grown-ups are in charge of economic policy.” It was made explicitly clear that Cohn’s influence will be greater-than-normal for the head of the National Economic Council. Both pieces also highlight Cohn’s ability to work around Trump’s tweet-by-tweet agenda and praised him for rolling up his sleeves and getting into the finer details of policy writing.
To be fair to Cohn, I know little about his public statements prior to assuming this position. Maybe it’s possible there was a high-ranking Goldman Sachs Democrat who had a grasp on economic policy outside of the mainstream – I just tend to doubt it. Steve Mnuchin similarly was a question mark who has proven to be constantly in the mainstream as the vetting process has played out.
I think one way this will present itself sooner rather than later will be in the battle over tax reform. Mnuchin has indicated he wants any reform to be revenue neutral, and I expect Cohn to make a similar argument. (Oy!)
If there is any hope to be had for confrontations to have a voice in the economic debates, it will be from Team Pence. I am happy to eat crow regarding the VP, I was not a fan at all when he was chosen, but he has been a true bright spot on this front. He helped make the case for Mick Mulvaney (a Fed critic who wants to cut defense spending) to be selected to head the Office of Management and Budget, was an advocate for John Allison at Treasury, and just hired a Mark Calabria as his top economist. (Calabria has long been a strong libertarian voice against financial regulation in Washington.)
So this may come down largely to how much influence Trump allocates to Pence on economic policy.
What will be very telling is how Trump ends up handling the Fed. Since he now has three vacancies on the board to fill, he has a big opportunity to shake it up. From what I’ve been told, John Allison had a strong performance interviewing for Treasury – so whether he is given a position will, I think, prove to be a strong indicator here. Since Cohn and Mnuchin are both anti-Dodd-Frank, Allison should be someone they can get behind for the Fed vice chair position overseeing regulation – in spite of him being from Raleigh rather than Wall Street. Should he not get an offer for that, it will be a bad sign going forward.
Lastly, I think Bannon’s relationship with Trump will be the true canary in the coal mine in terms of where the administration is going. There is a full out war being waged right now over Bannon, and people are going to do everything possible to poison that relationship.
The best example of this battle playing out is how Joe Scarborough has been treating Bannon. For weeks now, he has been constantly talking about how “surprised” he is at the amount of attention a White House staffer like Bannon is getting – strongly suggesting that Bannon is intentionally trying to overshadow Trump. While rarely is anything on MSNBC particularly relevant, Morning Joe is an exception because we know Trump watches it. Scarborough not only knows that, but he knows Trump personally. He also knows how to push his buttons. Trump doesn’t want to be overshadowed by anybody, and could be sold to view this as a betrayal from Bannon. We will see how this plays out, but I tend to think it could unfortunately be an effective strategy going forward. Especially since it’s one of the few things the media has direct control over.
Should Priebus end up outlasting Bannon, the Trump revolution will be over.