Moneybeat – Economic executive orders


MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: And good morning to our friend David Bahnsen, financial analyst and adviser. David, good to see you, good morning.

DAVID BAHNSEN, GUEST: Well, good morning, Nick. Good to be with you.

EICHER: Well, a flurry of executive orders from the new president, David. How do you evaluate them economically?

BAHNSEN: Well, I kind of have two thoughts on this. 

One is that there wasn’t anything that could possibly have been considered a surprise and it wasn’t telegraphed. And yet on the other hand there was very little that was good. I mean, they were all mostly I think pretty negative things. And that to me is kind of a mixed bag. 

I guess the disappointment would be that you might’ve hoped some of the things he said he was gonna do, he didn’t do. But these executive orders are mostly pretty symbolic. There are some things that are impactful. They’ll take a little while to get implemented—unwinding the deregulations of President Trump. They took a while to get done when they were passed by Trump, and now they’ll take a while to get undone by the new administration. 

But I think it’s more just the symbolic message that the newly inaugurated President Biden is certainly going to have to run and govern with a real significant thought to the far left of his party.

EICHER: So neither Paris nor Keystone? The president ordered us back into the Paris Climate Accord and he revoked the permit for the Keystone XL oil pipeline from Canada. So you’re saying, not much of an immediate impact in either case?

BAHNSEN: No, definitely neither of those things. 

I mean, I think that the Paris Climate Accord was well known it was coming. Undoing the Paris Climate Accord was more symbolic. At the end of the day that doesn’t have a whole lot of teeth to it in actual implementation. I think it’s a very bad accord, but ultimately I believe that primarily around what it doesn’t do to China, as opposed to what it does do to the United States. 

There’s certainly deeper criticisms I could offer of the policy, but I think what you mean is actual meat on the bone impact into the American economy right now. 

Keystone also is one that I think has a lot more symbolic significance because it’s a pipeline that judges have been blocking and that has not, you know, been on its way to fruition anyway, and yet there’s been this sort of master plan to run a lot of these liquid fossils from Canada and be able to be in a position to export and create a lot of American jobs in the construction of the pipeline along the way. 

But I think that, again, that’s such a long-term issue as to really whether or not that’s going to end up happening. I think this thing will ultimately find itself in the courts and we have quite a few years to go. So those are the two things I would say are big issues, but not the more immediate impact to the economics. 

Probably it’s what you’re going to end up seeing in some of the financial side. I think there just seems to be this real desire to hurt smaller banks with more regulation, all in the name of regulating bigger banks. And it was a mystery to me during the Obama administration. I know at some point I finally figured out that it was not because they were being disingenuous. That they actually just really didn’t understand the unintended consequences of the policy. And that’s what I think is the case now. I think that they will be heavily regulating industries and that the damage will not be done to those who they think it’s going to be done to.

EICHER: Looking ahead, David, what do you expect is big news to watch?

BAHNSEN: One of the things that I think is going to be really important in the two weeks ahead that is a little bit outside the macroeconomic news, outside some of the political stuff, but it’s actually pretty relevant just to those wanting to understand the market, understand profitability of American business is this next earning season is really the first one we’ve had since COVID where companies by and large are no longer going to be able to say, “Oh, we can’t really give guidance. We can’t really give projections forward because there’s too much uncertainty out there.” 

There will still be some of that. And there is still, in fairness, some opaqueness about where everything stands, but more and more now, as we go into this next quarterly earnings season where companies are reporting what took place in the fourth quarter and projecting out for the quarters ahead, I think it’s going to be very important to see how public companies in America see their own revenue environment, earnings environment, growth environment. 

There’s a lot out there that has kind of been skewed for a couple quarters in a row now by COVID. And it will be interesting, not just obviously in those really COVID sensitive sectors—airlines and travel and food and beverage—that’s all still really kind of wrapped up in getting through this kind of vaccine period. But I think that for the rest of the economy, that is less COVID-sensitive, there’s a lot on the line here as to how American business sees their own predicament and what they’re willing to invest in by way of growth and cap-ex and productivity going forward. 

So that’s probably the biggest thing on my radar right now, Nick.

EICHER: David Bahnsen, financial analyst and advisor. Thank you, David. Have a great Monday.

BAHNSEN: You too, Nick.


(AP Photo/Frank Franklin II, File) In this Oct. 14, 2020 file photo, the American Flag hangs outside the New York Stock Exchange in New York. 

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