Trump Brought the Money Back

You can be as hysterical as you want about the utter unfitness for office that the President demonstrates daily, but to be considered credible and reasonable, you’ve also got to be honest about the (rare) positives he’s been able to bring about.

The repatriation issue was a no-brainer. The Dems had plenty of time to bring the foreign cash of US companies back, and they didn’t bother even addressing it. Instead, trillions of dollars sat in accounts from London to Tokyo for years while US corporations did everything from changing their domiciles to raising debt domestically in order to put it to work.

And Trump forced a change in policy to bring the cash back. I wouldn’t go so far as saying that if the majority of what comes over is used for corporate buybacks and higher dividends that this will be a huge positive for the economy, but it’s better than having our assets idly collecting interest in foreign sovereign bonds.

Apple said this week that most of the $274 billion in cash and equivalents it holds elsewhere will be coming back to the United States – with plans for a huge new second headquarters, 20,000 more jobs and a new $5 billion investment in training / tech now being discussed. You don’t have to like the President to agree that this is a good development and that, no, it was not something that was necessarily going to happen under President Clinton.

As I said the other day, Trump didn’t single-handedly turn the economy higher, it was already headed on an upward trajectory – along with the stock market – during the entirety of Obama’s administration. But the recent burst of liveliness has to be attributed to the new attitude at the top:

Donald Trump’s singular accomplishment, in my view, is the ignition of Animal Spirits in the stock market and the real economy. Small business confidence measures shot up from the week of his inauguration and have remained elevated ever since. PE multiples expanded throughout the course of the year, which was not solely due to his tax policy – it was also about his swagger and I-don’t-give-a-f**k persona.

The recent run in the stock market that began post-Thanksgiving should absolutely be attributed to the tax bill, which many observers had assumed would be pushed into the first quarter of the year. When the momentum became apparent, the S&P 500 began to price it in quickly, adding another leg of gains to an already strong year of returns.

Here’s Bret Stephens at the New York Times on the dollar amounts involved with repatriation:

Apple will not be the only multinational that will soon bring back gigantic profits to take advantage of new low repatriation rates. Microsoft holds $146 billion in overseas earnings, Pfizer $178 billion, General Electric $82 billion, Alphabet $78 billion, and Cisco $71 billion, according to estimates from the Zion Research Group. The total stash is about $3 trillion — by one measure nearly three times what it was just a decade ago.