A story from late December that seemed to get passed over by non-financial media was President-elect Donald Trump creating a “special advisory” position on regulatory reform. In just about any other administration, this position would never even be created. Trump, however, has signaled that getting America back to business is a priority for his administration.
So who did he name to this advisory position, one that is not officially part of the government, but is merely an advisory slot?
He named someone from the business world. Not just any businessman, mind you — he is the single most successful businessman in American history, one whose track record is actually superior to that of Warren Buffett.
Did you guess Dr. John Malone? That would have been a good guess. You’d be close, though. He is named Carl Icahn.
It’s a brilliant move. The announcement alone is laden with messaging. For starters, by using Carl Icahn specifically, it signals that Donald Trump wants to not only get regulation out of the way, but to tear pages out of the federal code and start a dumpster fire with them. It means that all the billions of dollars that are being wasted on compliance will be freed up to invest in business. Sure enough, Carl Icahn is not a fan of regulation:
“I really backed Donald. Number one, I think he’s smart and I think he’s one of the few people that can really shake up the establishment and stop what I consider to be almost idiocy with this overregulation.”
Second, it is another middle finger to the anti-capitalists that have been emboldened the past eight years. Just as Obama created administrative positions that had no accountability, naming Carl Icahn to an unofficial post means that he will have strong influence regarding regulatory reform, be able to act in a way that even benefits his own investments and not have any accountability.
I’m not here to judge Carl Icahn or Donald Trump, insofar as conflict of interests. I don’t really care very much about that issue as an investor. In fact, it makes me want to pay close attention to the holdings in the Carl Icahn investment vehicle, Icahn Enterprises LP (NASDAQ:IEP), and either piggyback on that vehicle or buy up the stocks he holds. Obviously, he’ll target those industries he holds first for reform.
Sure, if Donald Trump says he is going to drain the swamp, appointing Carl Icahn to a non-existent unofficial post on regulatory reform doesn’t really fit that agenda. Yet as an investor, I say, give me more of the same.
Certainly, one big area Carl Icahn will concentrate on is energy, and he will also tackle financials. “I do think it’s extremely important for this country that this absurd regulatory environment is toned down somewhat,” he told CNBC. “I’m not against regulations at all. In fact I sort of believe that you need a rule of law. But it’s become literally absurd in many areas.”
Carl Icahn has specifically said that banking and EPA regulations have gone too far. Certainly, these are areas that need to be addressed. However, Carl Icahn has been a bit more circumspect with respect to Dodd-Frank and the Consumer Financial Protection Bureau. Donald Trump has said the legislation and the CFPB are partly responsible for the “the slowest, weakest, most tepid recovery since the Great Depression.”
I suspect Carl Icahn is soft-selling his feelings about the financial legislation and bureau that government created. Icahn has to play nice with banks because they provide debt for his businesses and acquisitions. Surely he has had his dust-ups with them, but ultimately this is just another part of what we should expect a Donald Trump presidency to look like: dealmaking.
Carl Icahn will make deals with the banks to scale back Dodd-Frank and the CFPB, and they’ll play nicer with him on any deal he wants to make. It’s how things work in America. It may not be ideal, in that we’d all prefer less influence being sold, but for investors, it should be a good thing.
Lawrence Meyers is the CEO of PDL Capital, and manager of the forthcoming Liberty Portfolio stock newsletter. As of this writing, he has no position in any stock mentioned. He has 22 years’ experience in the stock market, and has written more than 1,600 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.
