A “disrupter” for the Justice Department
Matt Gaetz is known for his outspoken defenses of Donald Trump, numerous scandals and a House ethics investigation. He can now add another distinction: being the president-elect’s pick to be nominee for attorney general.
It isn’t clear whether Gaetz, perhaps the most divisive of Trump’s cabinet choices so far, will get Senate confirmation. But if he does, he could keep corporate America on its toes.
Trump and his allies see the position of attorney general as especially important, given the president-elect’s numerous legal woes.
The Times reports that Trump weighed more traditional candidates, including Jay Clayton, who was S.E.C. chair in his first administration, and Bob Giuffra, a co-chair of the white-shoe law firm Sullivan & Cromwell. But he ultimately chose a loyalist who supported efforts to overturn the results of the 2020 election.
Gaetz “is a disrupter,” said Representative Chip Roy, Republican of Texas, praising Trump’s selection. Gaetz, who resigned from his position as representative of Florida last night, repeatedly challenged Republican leaders, picked fights with Democrats and pulled off stunts like trying to barge into the secure chambers for the House Intelligence Committee.
Will he go after Trump’s perceived enemies, including in business? In his announcement on social media, Trump said that Gaetz would “dismantle Criminal Organizations” as part of a mission to bring “desperately needed reform at the Department of Justice.” On X, Elon Musk wrote that “the Hammer of Justice is coming.”
Allies and critics alike expect Trump to seek retribution. That could mean going after tech companies that he has accused of silencing conservatives in a “new online censorship regime.” Opponents of Gaetz fear that he may be more inclined than other candidates to enable that.
Gaetz is a strong supporter of some kinds of tough antitrust enforcement. He has called for breaking up Big Tech companies, sharing common ground with the likes of Lina Khan, the Biden administration’s outspoken F.T.C. chair.
“He’s one of most aggressive members on antitrust, period,” Matt Stoller, the director of research at the American Economic Liberties Project who supports tougher antitrust enforcement, told DealBook. Stoller noted that Gaetz had also opposed consolidation in the defense sector.
But it’s unclear whether Gaetz’s nomination can clear the Senate, even with Republicans holding a majority of at least 52 seats. Many Republican colleagues are dubious, with Senator Lisa Murkowski of Alaska saying that Gaetz was not “a serious candidate.”
One unknown: whether Senator John Thune, the newly elected majority leader, will heed Trump’s demand to let him call recesses during which he could install officials without the chamber’s approval.
In other transition news: Republicans finally claimed a slim majority in the House. Trump is reportedly considering naming one of his lead criminal defense lawyers, Todd Blanche, as deputy attorney general. And Howard Lutnick, the transition team’s co-chair, is said to be making a late play for Treasury secretary.
HERE’S WHAT’S HAPPENING
Disney expects strong growth ahead. The entertainment giant rarely gives future guidance, but on Thursday told investors that it expected double-digit percentage earning growth in 2026 and 2027, partly driven by its cruise ship and theme park businesses. The company also reported progress in movies and streaming, two areas that have worried investors.
Tapestry kills its $8.5 billion deal for Capri Holdings. The owner of Coach and other luxury brands said it would terminate its pursuit of the parent company of Michael Kors after the F.T.C. successfully sued to stop the transaction. In other luxury news, Bernard Arnault’s LVMH reshuffled its top ranks and elevated Alexandre, one of his children, to the role of deputy C.E.O. of the wine and spirits unit.
John Malone reorganizes his media empire. Among the moves: Charter Communications, where the telecom billionaire is an investor, agreed to buy his Liberty Broadband, and Liberty Media will spin off its Liberty Live division, which will own the parent company’s stake in Live Nation. (All the deals are being done with an eye toward tax efficiency, of course.) Most notably, Greg Maffei, Malone’s longtime lieutenant, will step down as Liberty Media’s C.E.O. at the end of the year.
Dollar daze
The dollar is rising again on Thursday, extending a post-election rally that some analysts warn could disrupt global trade, and loom large over Fed policy and Donald Trump’s economic agenda.
The greenback is at a one-year high against peer currencies. It’s risen in line with yields on Treasury notes and bonds, as traders bet that Trumponomics — a mix of tariffs, tax cuts and a crackdown on immigration — will stimulate growth. But the president-elect’s plan could also add to the deficit and inflation, forcing the Fed to pause interest-rate cuts. (That said, the markets expect that the central bank will lower borrowing costs at next month’s meeting after Wednesday’s Consumer Price Index report.)
“Trump is the big dollar driver,” Steven Englander, a foreign exchange analyst at Standard Chartered, told The Times. The irony: The so-called Trump trade appears to be fueling the very thing that Trump despises. He would prefer a low dollar to bolster American competitiveness. Some analysts think that Trump might have to dial back some key planks to his economic plans to stifle the dollar’s march.
The strong dollar is also a drag on U.S. companies that do extensive business overseas. Currency effects reduced the profits at North American businesses by $8.4 billion in the first quarter, compared with the previous quarter, Bloomberg calculated. And the dollar has appreciated considerably since then.
Big movements for the world’s de facto reserve currency tend to have an outsize effect on the global economy. In an earnings call last week, the C.E.O. of IAG, the parent company of British Airways and Iberia, warned analysts that the strong dollar was adding another layer of uncertainty.
Could the dollar force Trump to roll back his plans? Bond vigilantes have been known to force politicians and central bankers into policy U-turns. Some analysts are gaming out the dollar factor on Trumponomics. “If the Trump agenda is implemented in full force and quickly without a countervailing policy response from Europe or China,” the dollar could accelerate further, George Saravelos, a foreign exchange analyst at Deutsche Bank, wrote in a research note this week.
More modest policies on deregulation, tariffs and immigration could blunt its rise. One scenario that Saravelos flagged that could slow the dollar: if Trump were to impose industry-specific tariffs, and just a 20 percent tax on Chinese imports, rather than the 60 percent across-the-board penalty he had threatened during the election campaign. Another: limit the immigration crackdown to new arrivals, rather than a mass deportation.
Watch the dollar to see if Trump budges on any of his plans.
Musk puts his stamp on Trump 2.0
Elon Musk’s evolution from a tech billionaire into a defining force in American politics has taken just months. After helping to get Donald Trump re-elected, he is now having a say on many of the president-elect’s most consequential decisions, The Times’s Theodore Schleifer reports.
Musk is perhaps the most powerful private citizen in America. He has spent most of the past week at Mar-a-Lago, with his son X, a nanny and some security, only briefing shuttling back to Austin, Texas. He’s been more hands-on than the official transition co-chairs, Linda McMahon, the former C.E.O. of World Wrestling Entertainment, and Howard Lutnick, the C.E.O. of Cantor Fitzgerald.
Aside from landing the role to cut government spending, Musk this week has:
Sat in on almost every job interview for the new administration.
Joined calls with foreign leaders, including with President Volodymyr Zelensky of Ukraine.
Attended at least one national security meeting.
Musk has floated names as potential hires. In addition to weighing in on candidates for senior roles, the Tesla boss has recommended friends, associates and some of his own employees for positions. They include two SpaceX executives, even though the rocket company has extensive federal government contracts. It’s unclear how Musk or those executives would avoid conflicts of interest if they join the administration.
Musk has helped others gain influence. They include Joe Lonsdale, a tech investor and co-founder of Palantir, the data-mining company with extensive government contracts of its own, who has said publicly he only wants a part-time advisory role.
In other news: Trump’s aides are looking for ways to boost Musk’s plans for cutting government spending without having to seek congressional approval, according to The Washington Post.
An unclear future for a final Biden move on A.I.
On Thursday, the Department of Homeland Security will release guidance for companies to protect themselves from the risks posed by artificial intelligence, DealBook’s Lauren Hirsch is first to report. The plan comes after an executive order that President Biden signed last year to erect safeguards around the technology.
But the guidelines raise a big question: How will President-elect Donald Trump regulate A.I.?
Some of the biggest names in corporate America helped create the guidance. Among the C.E.O.s on the special board convened by the department to examine A.I. threats to critical infrastructure, which created the guidance: Sam Altman of OpenAI; Sundar Pichai of Alphabet; Vicki Hollub of Occidental Petroleum; and Ed Bastian of Delta Air Lines.
“It’s a broad acknowledgment that we’re all responsible for our individual contributions to A.I.,” Bastian told DealBook.
The guidance is meant to help think through risks. Given the broad range of companies that worked on it together, it’s fairly general. The proposals encourage companies to monitor for suspicious activity, establish clear protocols for reporting it and create transparency around the use of A.I.
The framework also calls for legislation to supplement corporate efforts. “This is not a substitute” for law and regulation, Alejandro Mayorkas, the homeland security secretary, told DealBook.
Trump is likely to take a different approach. He has said that the Department of Homeland Security should focus on cracking down on undocumented immigrants. And the president-elect has suggested that a broad easing of corporate regulations would extend to A.I., including by revoking Biden’s executive order.
That said, there’s a prominent supporter of regulating A.I. who has Trump’s ear: Elon Musk, who has been in favor of a California state bill that many tech companies opposed as too restrictive.
THE SPEED READ
Deals
Klarna filed for an initial public offering in the United States, seeking a valuation of up to $20 billion. (FT)
“Blackstone’s New Fund for the Rich Is Looking Just About Everywhere for Deals” (WSJ)
Politics and policy
President Biden will meet Xi Jinping, China’s leader, during the APEC summit this weekend, with Beijing expecting a tougher relationship with Washington under Donald Trump. (NYT)
OpenAI called on Washington and its allies to work together to counter China in artificial intelligence. (Bloomberg)
The F.B.I. searched the home of Polymarket’s C.E.O. as part of an apparent investigation into whether the political prediction market was being run as an unlicensed commodities exchange. (NYT)
Best of the rest
Ted Olson, a conservative legal titan who helped secure George W. Bush’s win against Al Gore and championed gay rights, has died. He was 84. (Law.com)
Ben & Jerry’s sued Unilever, saying its parent company silenced its ability to express support for Palestinian refugees. (Reuters)
“Mark Zuckerberg and T-Pain Release Version of ‘Get Low’” (NYT)
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