Michael Faulkender PhD ~ Trump Administration Economist ~ Economic Plan Solves Momentous ProblemsMichael Faulkender is the Deanās Professor of Finance at Maryland Smith. He joined the University of Maryland in 2008 and was the Associate Dean of Masterās Programs in 2017 and 2018. Dr. Faulkender left that role at the beginning of 2019 to serve as the Assistant Secretary for Economic Policy at the US Department of Treasury. In that role, he advised the Secretary on domestic and international issues that impacted the economy. During the COVID-19 pandemic, he assisted in negotiating the CARES Act and was the senior Treasury official who led the implementation of the Paycheck Protection Program (PPP). In January, he was awarded the Alexander Hamilton Award for Distinguished Leadership, the highest service award granted at the Department of the Treasury.His research lies at the intersection of financial economics and public policy. Examples include the job impacts of the PPP, corporate capital structure, risk management, corporate liquidity, and executive compensation. His work has been published in top academic finance journals, received numerous ābest paperā awards, and has been cited in the Wall Street Journal, Washington Post, and The New York Times, among others.Professor Faulkender teaches classes in the MBA and EMBA programs at the Smith School. Professor Faulkender has a PhD in Finance from Northwestern and a Bachelor's Degree in Managerial Economics from UC Davis. He has also served as a faculty member at the Wharton School at the University of Pennsylvania, the Kellogg School at Northwestern University, and the Olin School at Washington University in St. Louis. Click the Image Above āļø to Watch the Video Now šŗ~ OR ~Click the Podcast Player Play Button Below š to Listen Now š§ Michael Faulkender PhD ~ Trump Administration Economist ~ Economic Plan Solves Momentous ProblemsOriginally Recorded on January 11, 2024Season 2, Episode 232- Learn More at: GeneValentino.com- Image(s) Courtesy of: Gene ValentinoA Special Message from Gene ValentinoGene & Maureen ValentinoABOUT: GrassRoots TruthCast, created by former Escambia County, Florida Commissioner Gene Valentino, broadcasts weekly from Pensacola, Florida. Gene, an investment entrepreneur and avid aviator, is a founding member of VeriJet charter aviation and serves on the company's Board of Directors. When he's not in studio, Gene can usually be found in the skies over the Gulf of Mexico, piloting his ICON A5.Doing āthe right thingā is not always easy. Itās not always thought to be wise, most profitable, or popular. Doing the right thing has more to do with āCOURAGEā; forged from the principles and beliefs given to you by your parents. Thereās an oleā saying Iāve adopted, āThe Politician will tell you what you want to hear. The Leader will tell you what you need to know.ā And, telling you what you need to know may not be popularā. So, my Accomplishments here do not show you things Iāve walked away from. As a result, I left A LOT of money on the table. However, God is good! He rewarded me with more wealth than I can speak of with a conscience that is pure and clear. I sleep well at night. I wish for you the same!āLearn more about Gene Valentino by clicking here now. Full Episode Transcript Michael Faulkender PhD ~ Trump Administration Economist ~ Economic Plan Solves Momentous ProblemsMike Lindell: Hello, everyone. Please keep supporting Gene Valentino's Truth Podcast. We need our voice to get out there far and wide and help save our country.Narrator: With breaking news and political commentary from a public servant, serial entrepreneur, community leader, philanthropist, and American patriot, and a darn nice guy, it's time for the Grassroots Truthcast and your host, Gene Valentino.Gene Valentino: Hi friends, Gene Valentino. Welcome to another episode of Gene Valentino's Grassroots Truthcast. My guest today is Michael Falkender. He is Dean's Professor of Finance. He's with the University of Maryland.And since 2008, where he had his associate's dean of master's programs in 2017 and 2018. Very interesting individual. We're getting off on a, on a interview with Michael on issues related to the economy and related to the policies of an economy that have transpired. Since his involvement with the Trump administration a mere three years ago he works as a professor in a university now, teaching, and this is why, Michael, I enjoy having you on is because we get to talk not only about the policies of econo of the Trump administration, but I'd like to know more about how things evolved.Would you like to introduce yourself and, and where you're coming from and where you are now and where you're going? GoMichael Faulkender: ahead. Go ahead. Happy to. So, as you said, Mike Falkender, I'm a professor of finance at the University of Maryland. I've been there since 2008. I oversaw all of the graduate master's programs in 2017 and 18.Thought I was going to become a university administrator, and then in late 2017, the Trump administration reached out to me, and I went through an interview process and ultimately was nominated by the President to be the Assistant Secretary for Economic Policy at the Department of Treasury. In that role, I served as the Chief Economist directly working for Secretary Mnuchin.During the pandemic, I was asked by Secretary Mnuchin to lead the implementation of the Paycheck Protection Program, among other activities implementing the CARES Act. At the end of the administration, I went back to the university, but I came on to the America First Policy Institute as well as their chief economist, and I've been leading our economic planning efforts here since October of 2022.Gene Valentino: I'm very interested in the CARES Act, Professor, and what came of that policy. What, what was the benefit of it? How was it presented? I had the impression it was a loan first that kind of morphed into a forgiveness of sorts.Michael Faulkender: Am I right? Well, not exactly. So the CARES Act, broadly speaking, had five different elements to it.The overall objective was then recognizing that we were being hit by a pandemic that we had not faced in this country in more than a hundred years. And that literally the week that the president signed the CARES Act, we had nearly 6 million Americans apply for first time unemployment claims. It was absolutely necessary that the government act exceptionally quickly to support households, make sure that we could replace the wage income of people that were going to temporarily be laid off by the pandemic, ensure that access to their financial wealth was going to be able to take place, try to curtail as much as possible any of the output reductions that were going to arise from locally based stay at home orders.And also I think one of the things that's least appreciated about the Paycheck Protection Program is that we needed to relieve the pressure on state based unemployment insurance systems. Just to put that in context, in the worst week of the 2008 2009 financial crisis, 700, 000 Americans applied for first time unemployment insurance claims.And the Obama administration recognized that there were There were problems and challenges with the unemployment insurance system at that level of claims. Imagine throwing 10 times the number of claims into that system. And so we needed to do what we could to ensure that as many people as possible stayed employed so that we weren't stressing these unemployment claims systems that are not.engineered to handle them. There's been some interesting academic research showing, for instance, that many of these systems are run on programming languages that were developed 40 to 50 years ago and have not really been updated. They are not scalable, and the backup for them is manual input. And so if you've got a system where you have to manually input, manually file for claims during an airborne virus, You are looking at a public health crisis.And so there was very much a desire for us to mitigate the challenges to the state based unemployment insurance system by replacing a lot of that income. And that was the genesis of the Paycheck Protection Program, which was one of the five elements of the CARES Act. In your opinion,Gene Valentino: since the Biden administration began,I'm concerned about where the economy is and where it's going and how much of this Act. How much did this act help bolster the economy? My understanding, and I speak from where I'm coming from, Doctor, is that I used to be a county commissioner and for two terms and I was quite involved in economic development.And I think one of the things government gets right is that they're providing the necessary incentives to help businesses out in certain ways at certain times. Providing incentives is one thing. I think that's a good role for government. But stepping back or stepping out is the other question.Forgiving debt, like the student loan program, is is an ex Is an extreme example of what I'm trying to make the point on and that is where government then recklessly walks away from any responsibility of a payback or where's their ROI? Where's the return on investment for that which government put out there in the first place?Your comment?Michael Faulkender: Right, so let me distinguish between the economic assistance that government provided at the onset of the pandemic versus the provisions that came later. So, the CARES Act was passed into law in late March of 2020, and in the second quarter, so April through June of 2020, we saw on an annualized basis about a 32 percent reduction in economic output.So, the idea that you're going to come in, provide massive government assistance at a time that ultimately About 12 million Americans were, or I think it was more like 15 million Americans were unemployed. That's something that you could argue that government should very quickly step in and do. By the end of 2020, a significant portion of that employment had been returned into the labor force, a significant amount of that economic output had been had been realized.So we had a 32 percent annualized reduction in economic output in the second quarter, but we had a 33 percent gain in the third quarter. So by the middle of 2021,So I very much stand by the scale and breadth of what we did in the CARES Act. And let me distinguish that from what Congress did in December of 2020 and then also what Congress and the Biden administration did in March of 2021, the additional 3 trillion that came in the form of those two components, in my view, was greatly in excess of what was needed.You know, it's very different pumping 3 trillion into the economy at the midst of, of What's, we're on the verge of potentially a depression versus nearly full recovery and pumping another three trillion into it. And so I've had the opportunity to testify to Congress about the inflation that we incurred starting in March of 2021 and very much believe that it's tied to the excessive amount of government spending that happened right around that time.Now with regard to the forgiveness in the Paycheck Protection Program, again, the businesses would not have taken on these. The, what we tried to do was find a mechanism to provide support to businesses who were otherwise were going to lay people off. If the workers can't be productive, the businesses aren't gonna pay them.If they don't pay them, then they're gonna end up on an unemployment system that can't handle them. The way to keep people off on employment was for the paychecks to keep flowing, even if the gover, even if the employers weren't going to still get much benefit out of those employees, and so we provided them.And the only way to get that much money out that quickly was to use the banking system, right? You think about that the federal government sent out economic impact payments and those took weeks beyond the amount of time it took for us to get the Paycheck Protection Program up and running. And those were weeks that we could not stand to wait for.So the banking system was the only way to get it out there quickly. You had to use existing infrastructure. And that means banks doing what they know how to do, which is loans. And then what we said is if you do these loans and people use the money as the Congress intends, we will forgive those loans, essentially turning loans into a grant.But from the get go, the only reason these businesses took those loans was because they knew that if they followed the requirements, they would be forgiven. That's vastly different to somebody voluntarily taking out a student loan is not to keep them employed during a pandemic, but is to permanently improve their income capacity over their lifetime.Student loans are a loan because the primary beneficiary is the student borrower, and they are going to be in a position to pay back that loan because they're going to realize income improvements from the skill set that they attained from college. And so when the Biden administration started making parallels between student loan forgiveness and Paycheck Protection Program loan forgiveness, I was aghast.I wrote a Wall Street Journal op ed where I called out the, the foolishness and the You know, the outrage that I, that I felt at making any comparisons between a program that we put out there to save lives during a pandemic versus student loans that are meant to improve individuals and their career opportunities.We're talkingGene Valentino: with Michael Falconer, professor of Finance, university of Maryland, and Chief Economist at America First Policy Institute. He's also the former Assistant Secretary for Economic Policy, which is what he's referring to now at the United States Department of Treasury, on and in and around the Trump administration.We're taking a break. We'll be back right after this.Mike Lindell: To celebrate the new year, we're having the biggest sale ever on overstock clearance and brand new products. For example, save 60 percent on our goose down comforters, the best comforters ever. They go perfectly with our MyPillow bed sheets and duvet covers. Save 25 percent on our brand new kitchen towels.They're made with the same technology as our famous MyTowels. Our initial quantities are extremely low, so get them now before they go. Our seasonal flannel sheets are finally in! You save up to 50 percent and they sell out fast every year, so order now! They're truly the best flannel sheets you'll ever sleep on!Or save up to 80 percent on all our clearance items! And this is where it gets even better! For a limited time, your entire order ships absolutely free. So go to MyPillow. com or call the number on your screen. Use that promo code to get deep discounts on all MyPillow products. And for a limited time, your order ships absolutely free!Gene Valentino: friends. Welcome back to our second half of our episode here on Grassroots Truthcast. Again, we're with Dr. Michael Falkender, Professor of Finance, University of Maryland, Chief Economist, and what had me most interested was his grab into the Trump administration kind of alleviated some of his plans as a university administrator, the Trump administrator brought him in, Trump administration brought him in to work as a chief economist, assisting and doctor, what I find most interesting.In simple language, compare the economic policies and implementations during the Trump administration from those now in the last three and a half years under the Biden administration, if you would.Michael Faulkender: Sure. So when I think about an America First approach to the economy, it very much is unleashing American entrepreneurial spirit.It puts It puts faith in the American people and American industry to serve their fellow Americans rather than a belief in government. And so when I look at the current administration, what I see is despite their rhetoric, it's a top down central planning approach to the economy where they pick winners and losers.So it's, it's high taxes, high regulation, where they tell you what kind of car you can drive, what kind of stove you can use. Whether you can work part time or full time, how many hours a week is going to be classified as what, it really does operate under the belief that the government central planners are in a better position to make decisions for you than yourself.Whereas, under the Trump administration, under an America First administration, in the next administration, it's very much about returning to a system where we Stop the spending. It's the, the inflation that we realized during the first three years of the Biden administration has come in at nearly 18%.Over the first three years of the Trump administration, it was around 6%.
