What would Mike Pence do? That's the question global investors may ponder amid the woes of U.S. President Donald Trump. There is a whiff of impeachment in the air in Washington following the appointment of a special counsel to oversee the FBI's probe into Russian government ties with the real-estate developer's electoral campaign.
Trump's departure may still be an unlikely outcome, but the 45th president's flawed stewardship of the office should be prompting risk managers to run their rules over alternatives. In the first instance, that means assessing the economic views of the vice president, next in line should Trump leave the Oval Office prematurely. The truth is, both financiers and Republican lawmakers might vastly prefer the current number two.
Pence, who is a former Indiana governor and 12-year veteran of the House of Representatives, has a solidly conservative record. In 2008, he voted against Washington's $700 billion financial-system bailout, a decision he defended through last year's election. A year later, Pence opposed Obama's $80 billion rescue of General Motors and the rest of the auto industry.
"Though I am proud of the American automotive tradition and Indiana's ongoing role it, I even opposed bailing out GM and Chrysler," he said in 2010, arguing it would have been better for GM to reorganize without taxpayer help. That's all the more surprising given the bailout paid off palpably for his Hoosier constituents. A few years later, Indiana was able to point to U.S. Bureau of Economic Analysis statistics showing only one other state in the nation derived more of its economic output from the car business than Indiana.
In 2011, the language of a bill Pence co-sponsored ultimately surfaced in a piece of legislation that permanently extended tax relief provisions from 2001 and 2003, repealed the estate tax and provided relief from the alternative minimum tax, according to Govtrack – all tweaks that tend to help richer folks. Naturally, Pence voted against the Dodd-Frank Act, which regulated banks more stringently after the 2008 crisis, and against imposing regulation on the subprime-mortgage industry.
He has favored making it more difficult for individuals to wipe away their debts in bankruptcy. He has consistently opposed increases in the minimum wage, too. In the House, he argued against efforts to increase the pay floor to $7.25 an hour, calling it "irresponsible and unwise," though the measure ultimately passed. In his first year as a governor, he signed a bill barring local governments from requiring businesses to pay higher wages, or offer benefits like paid sick leave, if not mandated by state or federal law, according to the Times of Northwest Indiana.
Summing up his tenure as governor the Center for Economic and Policy Research, a think tank that swings to the left, noted that the state's GDP growth slightly lagged that of the nation as a whole, as did Indiana's private-sector job growth. "A conservative achievement this is not," CEPR wrote in a report last October.
A blowout success or not, it's not sufficiently original thinking to require the coining of the term Pence-onomics. Instead, it reflects an orthodox, trickle-down conservative belief system, with a preference towards policies that benefit providers of capital over employees. That should appeal to many people in business and finance, as well as to GOP lawmakers, even if it could turn off liberal Democrats and the more self-described compassionate of conservatives.
Meanwhile, Pence's motivation appears to be his ideology rather than personal gain. His public financial disclosures show a man of modest means. Apart from his $109,749 salary as governor, some $15,000 in a bank account and a state pension potentially worth $1 million on an actuarial basis, there's little to hint at Trump-like conflicts between the interests of the United States and those of his family (unless Pence's wife's ownership of a small "That's My Towel Charm Inc" crafts business counts).
This doesn't prove Pence's bona fides, but it does potentially remove one of the obstacles Trump has faced with his agenda, particularly tax reform. Given his personal and family interests in the outcome, many in Congress, including members of his own party, are skeptical of his intentions. That shouldn't be a concern with Pence, and some liberals might even take pity on him given that his disclosed student-loan liabilities as a parent appear to exceed his financial assets.
Perhaps the vice president's most comforting quality, however, is his temperament, especially in contrast to Trump. Solidly Midwestern mores on matters such as gay marriage do not please liberals on America's coasts. But the silver-haired lawyer's deliberative demeanor – which inspired Trump to suggest he comes from "central casting" for the role of vice president – along with the absence of a Twitter addiction would probably placate investors of all political persuasions.
The vice president has his own issues to confront. The New York Times reported this week that the Trump transition team knew Michael Flynn was under federal investigation and still brought him in as national security adviser. Flynn lost his job after failing to tell the vice president he was the subject of a law-enforcement inquiry. Should Trump be removed from office, what Pence knew, and when, would need to be untangled.
Pence doesn't, however, seem to have much to hide. His record on economic and fiscal matters is solidly conservative. His finances appear clean. His demeanor is cool. He'd have to explain one perplexing thing, though: why he so solidly supported a president with none of these attributes.
Commentary by Rob Cox, global editor at Breakingviews. Follow him on Twitter at @rob1cox.
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