Consider the source and adjust accordingly.
Former Speaker of the House Newt Gingrich backs something to which we recently alluded, namely the bureaucratic revolt underway at the Department of Labor. Only Gingrich expands it further, arguing that the recent nomination of Supreme Court Justice Neil Gorsuch gave Republicans decisive control over all three branches of government, something career employees despise.
‘Deep State’ bureaucrats are executing a not-so-subtle pushback, and “Democrats have pinned their hopes to stifle President Donald Trump’s pro-growth agenda on the unprecedented insurrection of an unchecked, de facto branch of government: the bureaucratic state,” Gingrich writes.
However, the Fox News contributor adds that now that Alexander Acosta is confirmed as secretary of labor, President Trump has a better ability to reign in that bureaucracy, and specifically uses the Department of Labor’s fiduciary rule as a starting point.
He refers to President Trump’s executive memorandum in early February that asked the Department to review the rule and to consider delaying or rescinding it altogether.
“The order’s intention was clear-as-day. It aimed to indefinitely delay or outright kill this bad rule before it could hurt middle class American investors. Instead, Perez’s faithful holdovers at the Department of Labor effectively expedited the rule with minimal changes. This was exactly the opposite of President Trump’s instructions.”
Gingrich notes the department will make the rule effective on June 9, before completing the president’s review, because the DOL reasoned that “the Fiduciary rule and Impartial Conduct Standards … are among the least controversial aspects of the rulemaking process.”
“Nothing about the rule is uncontroversial,” he counters, something on which we agree, although not necessarily for the same reasons.
“Disingenuously marketed as a way to raise the standards of advice provided to retirement investors, the rule would result in the “orphaning” of most ordinary American savers, left to seek advice on saving for their golden years from an online computer program using algorithms no investor would know about or understand.”
He then appeals to authority, referring to acting SEC Chair Michal Piwowar comments recently in which Piwowar called the rule a “terrible, horrible, no good, very bad rule” and “highly political.”
“President Trump and the Congress want the rule gone. Business wants the rule gone. Ordinary Americans want the rule gone. But none of that matters to the bureaucratic state.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
