CEO Daily: Trump’s inside men

Nov 19, 2016

Saturday Morning Post: The Weekly View from Washington

The pace of appointments to Donald Trump’s incoming administration picked up toward the end of the week. And attention focused, understandably, on the hardline profile of the figures the president-elect is now choosing for his governing team. But given what we’ve learned about Trump’s management style — and how, in his orbit, proximity confers influence — the staff-level hires he made last weekend may prove more consequential. Then, Trump announced that Reince Priebus, the subdued apparatchik who chairs the Republican Party, will serve as chief of staff, and Steve Bannon, the reclusive strategist with deep ties to the alt-right, will serve as chief counselor. Or, as NBC labeled them, respectively, Mr. Inside and Mr. Outside. The idea is that two men, both steps from the Oval Office, will advocate for two distinct crowds, with Priebus minding the Republican establishment while Bannon keeps faith with the nationalist movement that helped fuel Trump’s rise. The nicknames originally belonged to a pair of speechwriters on Richard Nixon’s 1968 campaign, though it reversed their meanings: within that operation, Pat Buchanan earned the Mr. Inside handle by writing combative speeches that appealed narrowly to the base; Raymond Price came to be known as Mr. Outside for his soaring rhetoric with mass appeal.

In Nixon’s campaign, the schizophrenic effect of two such divergent voices writing for one candidate predicted a dynamic that was arguably his undoing in office. The split itself was evident well before he got there. In the closing weeks of the race, Nixon’s running mate, then-Maryland Gov. Spiro Agnew, embodied the angry voice, at one point inviting hecklers at a speech to “renounce your citizenship” and declaring once Republicans won, that crowd would “dry up and disappear.” But when Nixon was interrupted three days later, he said he was “delighted to hear these differences.” On Election Night, Nixon was once again in a magnanimous mood. Channeling Price, he appeared on television to declare his administration’s guiding aim would be to “bring the American people together.” That came as a relief to a public wary of what it had seen on the trail. “To a remarkable degree Nixon was a political unknown on the day he was elected to office,” Jonathan Schell wrote in the New Yorker in 1975. “During the campaign, he had drawn back from many of his old positions while putting forward few new ones, so that his campaign was a process of erasure more than of disclosure.”

Nixon and Trump are obviously very different men operating in very different eras. For one, Nixon, a practiced pol, ran as a healer who could bring peace and calm after years of domestic strife over the Vietnam War; Trump, a novice candidate, triumphed by embracing the politics of division. But they both won by coopting the cause of the party they displaced — for Nixon, ending the war, and for Trump, tackling economic inequality. And both made grand promises without explaining how they’d achieve them. In Nixon’s case, by secretly escalating a war the public believed he was winding down, he cultivated an atmosphere of paranoia within his administration. Months into his term, he ordered the first warrantless wiretaps, of his own staff and some reporters, to try discover the source of a leak about his Cambodian bombing campaign. And before the end of his first year in office, Nixon all but abandoned reconciliation, framing his opposition at home as a threat to the Constitutional order and calling on the “silent majority” to support him. Trump has a jump on him there — his team explicitly referenced that same silent majority during the campaign to explain how he’d win. Now that he has, Trump faces intense pressure to deliver. Doing so will require reaching out beyond his circle of loyalists. But if Priebus aims to be a moderating force within the West Wing, Trump’s subsequent hires so far signal Bannon has the upper hand.

Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com

Top News

•  Trump settles Trump U. fraud suit
Trump has agreed to pay $25 million to settle the fraud charges he was facing from the New York Attorney General over the defunct real-estate seminar known as Trump University. The settlement covers three lawsuits — two class action suits in California and one brought by New York AG Eric Schneiderman — and Trump will pay up to an additional $1 million in penalties to New York state. Resolving the suit removes the looming threat that the president-elect would have to testify in open court before his inauguration, a historically unprecedented event. Trump during the campaign called the lawsuit baseless and said he would refuse to settle. On Saturday, he defended the decision as a move to put his public duties ahead of his private interests, so he can focus full-time on assuming the presidency. TIME
•  Sessions faces renewed questions about race record
Jeff Sessions, the Alabama senator Trump has tapped to lead the Justice Department, will face some tough questions from Democrats about his record on civil rights and race issues. Sessions last came before the Senate Judiciary Committee in 1986 as a nominee for a district judgeship. But his bid was derailed by his history of racially charged comments — including joking in front of a Civil Rights Division attorney that he thought the KKK was "okay" until he learned they smoked pot. And he was alleged to have called a black assistant U.S. attorney "boy" and described the NAACP as "un-American." Sessions already has locked up support from a significant number of his Senate colleagues, including Majority Leader Mitch McConnell, which suggests he will get confirmed. But the confirmation process itself promises to get ugly. Fortune

•  Hedge funds cash in on Trump win
Hedge funds were already encouraged by Trump's victory, because of the new spending that traders believe the new president will unleash on infrastructure and other items. But those in the $3 trillion industry are already booking big profits from moves in bond yields and currencies. Macro hedge funds are doing especially well, since they've been betting on rising interest rates and a stronger dollar. The news may not cheer Trump's core supporters, many of whom were drawn to the candidate's populist pledge to crack down on Wall Street, but it's welcome relief for the industry itself, which has been struggling through relatively lean years. Wall Street Journal

Around the Water Cooler

•  Trump demands apology from "Hamilton" cast
"Angrily denounce the cast of a hit Broadway musical," doesn't typically rank on the priority list for an incoming president, but here we are. Trump on Saturday morning took to his Twitter account to complain about the treatment that Vice President-elect Mike Pence received on Friday night when he attended a performance of the blockbuster show. Pence entered the theater to a chorus of boos from fellow audience members, and some cheers — a reception that lit up social media. And after the show, the cast made a curtain call to address Pence directly. "We, sir, we are the diverse America who are alarmed and anxious that your new administration will not protect us, our planet, our children, our parents, or defend us and uphold our inalienable rights, sir," cast member Brandon Dixon said, reading from a prepared statement. "But we truly hope this show has inspired you to uphold our American values and work on behalf of all of us. All of us." Pence left the auditorium before the end of the statement but reportedly heard the rest of it from a hallway in the theater. Trump's response, via tweet: "The Theater must always be a safe and special place. The cast of Hamilton was very rude last night to a very good man, Mike Pence. Apologize!" Washington Post
Steve Bannon promises to drive conservatives crazy
The former Breitbart News editor and head of Trump's presidential campaign, soon to be ensconced in the West Wing as the new president's chief counselor, doesn't talk much in public. He's been a lightning rod for criticism, mostly for the racist, anti-Semitic and misogynistic stories Breitbart published under his tenure. In a recent and rare interview, Bannon was unapologetic: "Darkness is good. Dick Cheney. Darth Vader. Satan. That's power. It only helps us when they get it wrong. When they're blind to who we are and what we're doing." And he talked up plans for a trillion-dollar infrastructure package that he predicts, with some apparent glee, will drive conservatives "crazy." Says Bannon: "We're just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement." Hollywood Reporter
•  Peter Thiel has a list and he's checking it twice
The billionaire tech investor, one of the vanishingly few from Silicon Valley to endorse Trump, now is helping the transition team by developing a database to screen disloyal job applicants and find others from beyond the typical Beltway set. The database, which Trump insiders are calling the Plum List, will primarily focus on those seeking science and tech jobs in the new administration. It's reportedly built to search through applicants' social media postings, even those that've been deleted, to find anything critical of Trump. Daily Mail

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