Pat Toomey is hosting Squawkbox? OK, I said. But that’s so obvious!
How about someone like Joe Sestak as guest host of Squawkbox? Now *that* would be interesting. Admiral Sestak meets bankers. I anticipate we'd see the 'Sestak laser stare' on a few occasions. The stare is so intense, I think it probably kills flying bugs that have the misfortune of traveling through it. Really.
ONE
When it was suggested that I liveTweet Senator Toomey’s Squawkbox appearance on March 7th? My first, somewhat amusing thought was of Toomey’s recent election opponent, Joe Sestak -- on Squawkbox. And I said the above.
So you can tell I was having some fun with this whole idea of US Senators, and almost US Senators, as hosts on an investo-tainment program.
For those of you who don’t watch this early morning show regularly, it’s what traders and investment people (I am a former one) watch as they come in and imbibe ridiculous amounts of coffee while swapping stories of the night before. It’s pre-market, pre-work noisy energy. I was once someone who knew both San Francisco and Manhattan as bicoastal bankerhome, and started work at the exact same minute each day regardless of what time zone I was in.
Also watching Squawkbox are those who have never had a banking career, consider themselves expert investors or want to, and engage Squawkbox and shows like it for daily reassurance that their uberfaith in markets and complete disdain of all regulatory measures imposed by government is valid.
I say that with a teaspoon of playful sarcasm, but not much more than a teaspoon. The unregulated ‘free’ market is, from a communications person’s vantage, a simple and pure narrative. It’s gorgeous precisely because it enables weaveout of success story after success story. It’s a “grape narrative” – my own little term given to a narrative that’s like a bunch of grapes. It can witness and sustain real life challenges to its validity, even pickoff, and still survive. Specific grapes can be pulled out of a big bunch and that big bunch still exists. You still see it as a bunch. It still works.
As it’s based upon economic and human behavioral truth, it can take hit after hit, and still fly far. And fly far it often does. Characteristic of a very strong theory, and an oft misinterpreted one. It’s very much both.
***
Senator Pat Toomey, Republican of Pennsylvania, is perhaps a human version of such a grape narrative. In a 2010 Senate election I encountered closely from an observatory academic perch, Mr. Toomey defeated Admiral (and Congressman) Joe Sestak, man of extraordinary work ethic and laserstare, in what was one of the most closely contested races of the 2010 cycle. It was rife with intrigue throughout, with many fine minds battling a few almost rascal-esque party organizations. Back and forth sniping included comparisons of both candidates to homely characters in sci-fi and fantasy films and sitcoms, from Lord of the Rings to Land of the Lost.
One of the most sticky pop culture associations was of Candidate Toomey and Wall Street’s man-lizard, Gordon Gecko, the very pillar and symbol of banker greed.
That association lives on into what’s now Toomey’s 1st US Senate term. it’s been a parade of unusual visibility for a freshman, with memes ranging from private jets, debt ceiling freezes and moral showdowns with the US Treasury Secretary. A few big hits by big names. Each casting doubt, yet none remotely altering the success path so far.
***
Toomey’s March 7th Squawkbox guest hosting gig went very well by all measures. I expect he’s quite happy with it. It was gaffe free.
Consistent with his investment-furied background (he actually was a banker), his questions to guests were intelligent and relevant. His camera appearances were well planned, well rehearsed and limited, always the rule for one who prefers script and tends to exhibit strained facial expressions. He wore a tie - but no jacket. Half relaxed, half there, as some call it. It had all the marks of a very well structured non-Washington quote quote informal PR appearance. Planned to look peripheral, yet central because of that.
Toomey rose to the occasion. As he commented during both opening and wrap up, he watches the Squawk show. He knew the gig and he was ready.
Yet I’d wanted something else, which I did not get on today’s show. I’m still waiting for it. With that, a quick overview of today’s show, and a quick note of my wish, which I may or may not get.
***
A two hour hosting appearance on CNBC’s Squawkbox amounts to relatively little face time in terms of video minutes count. The show moves quickly, and is comprised of short questions, infernally short answers, a little bit of staged debate. Spackled with what I considered an extraordinary amount of adverts, all stacked up.
Regarding the advertisements. It’s no news that the show’s viewers own, or want to own, several luxury vehicles; they’re considered amenable to leisure, business and asset focused messaging. But the advertising itself is not just about the viewers. It helps establish the context of the show itself. As in a glossy print fashion magazine, it’s content. There are lots of examples to select from, but I’ll call out my favorite of the morning.
The advertisement is for Xerox. There’s a sexy looking, lean and helmeted motorcyclist on a Ducati. Garbed all red and white and skin tight in a motorcycle wind test chamber. You cannot see his face. A less svelte guy, no helmet, walks in with a stack of papers. He asks the rider, who has 100+ mile per hour winds visually and directionally enveloping him, to translate a manual into Portuguese. The biker guy tilts his head, almost in disdain at the request. Then the wind picks up the papers and forcibly blows them away. The guy with the papers has lost his purpose in being there in that chamber. He himself looks lost.
So the market is the sexy motorcycle and the wind is its milieu and context. It moves fast. The market guys are the cyclist, hidden conveniently behind a helmet, and the regulatory guys, let’s call them technocrats? Have a big stack of paper. They want to figure it all out, and need to translate it. To make it measurable and safe. Hence those papers - It almost looks like the White House 2010 Budget book. Or even that Obama health care bill….And the market wind, with no sort of politeness or discretion, acts like a twister. And blows the whole thing away.
Context.
Right after that, on today’s show, Senator Toomey, arguably now one of the most market-driven conservative Republicans across both Chambers of Congress, Gecko’s own Pennsylvanian embodiment, talks to former Democratic National Committee chair Howard Dean, arguably a walking symbol of the MoveOn culture of progressiveness. Head to head.
Now whom do you think wins this debate, in the eyes of the Squawkbox viewer who just viewed that ad?
TWO
‘Framing of topic’ is a big part of this show. Perhaps more so than topic itself.
Today’s segment began with an introductory session, in which Toomey recited several of his basic talking points toward framing the discussion he’d be leading as guest host. These points, and the conversation that wrapped them, suggested a theme title to me: “Giving Investors the Comfort to Take Risk.” As a sample:
· Reduce spending, cut taxes. Corporate and individual tax code simplification.
· The President has ‘abrogated his duty’ on entitlements management.
· We can make the debt ceiling hit a moment of consequence – to engage essential process reform.
· Let’s have a federal Balanced Budget Amendment.
· Repatriation. To the tune of almost a trillion$ potentially reinvested. At home in America.
I titled the intro segment as I did as all talking points on the program revolved around enhanced engagement of the investor class. This theme permeated Toomey’s 2010 Senate campaign and continues now. He is overtly specific about his area and demographic of focus, choosing terms carefully in order to reinforce it continuously. While there are several points I could select here, and I’ll be posting on each separately and subsequently, I’d like to pull out just two.
· The repatriation question
· The “correct” role of the Fed question
The repatriation question
The repatriation topic is a favorite of Toomey’s, but his manner of reviewing it always reminds me of skipping smooth stones on a lake. A very smooth flat stone, thrown correctly, skips several times. To approach the desired fourth or fifth skip, you need to have ideal conditions for the first, second and third skip. The water must be flat, and trajectory and speed must remain constant (i.e. lack of friction, correct angle – you need both at the very same moment) in order to get up to the fourth or better.
Toomey’s words on repatriation are confidence inducing. He says that permanent and business friendly tax policy may draw back, or “repatriate” overseas dollars that will be invested in America.
But the start point and endpoints he connects require a lot of wondrous conditions to occur in between. Our current era is hopeful and opportunities are there, but wondrous conditions? That’s not where we are.
To her credit, Becky Quick of CNBC endeavored to play devil’s advocate, and challenge Toomey. Money is fungible, said Quick. It can go anywhere.
But the topic did not go deep, despite its command of several minutes of program discussion.
I think there are many good reasons for Toomey to adopt repatriation as a key focus, especially within this venue and viewer demographic. But to link tax policy to investment, economic growth and job creation – that’s three skips of a stone right there. Investment is a maybe. Growth takes time. And in today’s technology and globalism driven job market, the jobs created, if any, may not be in America and may not be done by humans, even if the investment is right here.
The “correct” role of the Fed question
This question area arose several times and in several forms during today’s broadcast:
· Does the Fed have the duty to play liberally with monetary policy in such an expansive fashion?
· Does such expansion and rate pushdown allow the banks to do business?
· Is this good for the economy or a dire overreach of one entity that has lost its own purpose and focus?
Toomey cycled this theme well and posed some pointed questions to the panel within this topic thread. None, perhaps per plan and perhaps due to limited time, were answered sufficiently. Paraphrased, two related to:
· ECB: The European Central Bank and the Fed have different callings. The former across multiple nations, is singular, yet the latter, across one nation, is dual.
· Fed monetary policy and commodity price rises, from oil to metals to food. Are they connected? In what ways are commodity prices mobile/rising absent Fed influence?
I’ll be watching for recurrence of these types of questions, as well as connectivity (if any) between Toomey’s calls to streamline the Fed’s purpose and mission with more pronounced calls to audit the Fed (such as suggested by Congressman Ron Paul of Texas and his son Senator Rand Paul of Kentucky, the latter theoretically a Toomey ally around the proposed federal balanced budget amendment.) My expectation is not that Toomey will agree with either Paul, but will utilize their more rightward positioning toward framing his own Fed positioning as comparatively ‘moderate’ in nature.
**
Absent, and noticeably so, was specific delve into Toomey’s recent and maiden Senate bill to prioritize payments to investors in the event that the federal debt ceiling is reached. The Full Faith and Credit Act was discussed, and linked to what the panel and host perceived as an unusual new willingness by Democrats to approach spending cuts within the current Budget negotiations. Of import here is whether Toomey’s bill, and its clear influence on the tone and focus of these negotiations from Congress all the way up to the Treasury Department, is a welcoming signal to investors into the US, or a scary code call of sorts, indicating that the power of major holders of US Treasuries, among them China, has grown past the point of rescue. It’s a question of both sentiment and technicality around rate movements, and around the US as a ‘viable’ 2011 and forward investment, billions or so in repatriation assumed or not. I have to assume the lack of deep dive was due to program time, as Toomey would have had an ideal audience to sell the bill as quintessential investor reassurance, all in a very brief, clean, rapid and influential package.
THREE
I’ve assembled a quick (and separately posted) recap of Toomey’s questions posed to guests Roger Altman, Douglas Holtz-Eakin and Howard Dean. Of the three, Altman’s segment was by far the most compelling, with the latter two falling into known and recycled talking points, neither altering the program trajectory in a substantive way, or knocking Toomey from his hosting perch. Altman, being associated with the US Treasury during the last known time of federal budget surplus in living memory known to most viewers, edged past Toomey on a few occasions within his verbal refocus on the revenue picture of the federal budget crisis. Toomey’s focus, ever on point, continues to be spending. I noted on several occasions that Toomey prefers to use the term ‘economic growth’ rather than (federal) ‘revenue’ – perhaps believing that the former wider term dissociates him from the idea of tax increases, which he fundamentally opposes.
FOUR
The show wrapped up on a high note, with the usual compliments and thank yous. The message had been communicated. The script and its metaphorical grapebunch had tightly held. Toomey is a well planned man. All in a very brief, clean, rapid and influential package.
But was it a Ducati? I’m still thinking about that Ducati...
With that, let’s talk about my wish that I mentioned at the end of this post’s ‘part one.’
***
My wish: That Toomey will talk. For real. This is, lest you misunderstand, meant as a compliment to him.
I think the irony of this morning was this. The Xerox ad had set up a duality in which the sexy market had no time for the safety seeking technocrat.
Which of those roles is Toomey playing? Interestingly, he’s some of both.
***
Speaking lately on Facebook, Twitter, email and by telephone almost daily with voters in Pennsylvania, I know that many consider Toomey a mere talking head, funded by entities such as the Club for Growth, for which he once served as President. On the surface, he is precisely this.
Despite his almost painfully tight self-restraint in emotive presentation, he speaks very clearly, confidently and easily on matters that are ‘complex-yet-beautifully-simple.’
To some, this is comforting. Many Pennsylvanians enjoy having a Senator who understands huge concepts but does not delve into every little deeply wrought piece of them. Who casts a well-seasoned and overtly moral glare upon these points, making them smoothly indubitable by doing so.
That’s different than his 2010 election rival Sestak, who relished the idea of knowing every intense and pulsing angle of an issue – and describing it at length. To those applauding that sometimes long-winded Sestak sincerity, the Toomey tactic appears deceptive.
Yet I’m going to go out in a slight limb here and say that neither Toomey interpretation, comforting or deceptive, is quite complete.
**
There will be either one or two stages to Toomey’s service in the Senate, be it one term (probably by his own choice, if so) or longer.
The stage in which he spoke the party line and the stage in which he spoke as himself.
The first is already here; the second may or may not ever come.
If it does? This likely won’t involve any change in his issue positioning. I am not suggesting he believes any differently than he’s saying – I think he thoroughly does. Yet I saw him try to engage a few pertinent issues on Squawkbox. He did not get his own questions answered. Politically, quite convenient; intellectually, disappointing. Is there friction there? Maybe. I don’t know.
This is not a call to analysis of a person. It’s a recognition that Toomey, considering that 2012 may see the Republicans take back the Senate, could be very influential in shaping our nation’s fiscal policy
It is clear to me, via his body language and the reality of his own professional, educational (and may this writer gander, cultural?) background that he knows a lot more than he is saying, and may be choosing not to say it.
On a show like Squawkbox, this is far from wrong. The answers and questions are truncated for entertainment value. When time is short, you answer in few words. But by doing so you may not capture the subtleties, situation and seriousness of your topic. The debt ceiling. A balanced budget. A federal deficit that many agree represents the scariest thing America has ever known. Toomey knows this. But he’s saying it in scripted terms, not in his own words - Which might be quite meaningful. Or not. We’ll know when -and if- we hear them.
Link to video archive of March 7th CNBC Squawkbox broadcast. http://www.cnbc.com/id/15840232/?video=3000008912&play=1
Title of post derived from http://en.wikipedia.org/wiki/The_Logical_Song Supertramp -- Roger Hodgson, 1979