Anthony Scaramucci is dumbfounded by the universal opposition among Republicans in Congress to President Joe Biden’s $1.9 trillion America Rescue Plan.
After largely blessing Trump’s tax cuts, spending surges and Covid relief packages, not one Republican lawmaker in the US Senate or House of Representatives voted in favor of the new president’s popular plan to revive the economy.
“The Republicans decided they were not going to vote for it, which is great irony to me because they spent $7.8 trillion during the Trump administration,” Scaramucci, founder and managing partner of SkyBridge Capital, told CNN Business.
Scaramucci, who famously worked for 11 days in the Trump White House but has since become a fierce Trump critic, suggested the sudden concern about the federal deficit is insincere.
“These are the most profligate spenders in the history of the Republican Party. But now that Joe Biden is involved, they decided not to spend,” he said.
Biden’s $1.9 trillion plan includes $1,400 stimulus checks to Americans making up to $75,000 annually, the extension of key pandemic unemployment programs and nearly $130 billion for K-12 schools aimed at helping them reopen or stay open.
But Republican lawmakers have blasted the legislation as a “wish list of liberal spending” filled with unrelated projects. Also, groups like the Chamber of Commerce have said it should be more targeted toward those in truly in need.
“They’re blaming it on pork and they’re blaming it on extraneous expenditures, but that’s not really how the government works in my mind,” Scaramucci said. “The government is a blunt instrument. It can only do things in a blunt sort of way, whether it’s go to war or try to contain a depression or recession.”
If he were in Congress representing his home state of New York, Scaramucci said he “100%” would have voted for the legislation, which could soon be Biden’s signature legislative achievement.
“The question for me is a binary question: Is it better for the economy and better for the average person or worse?” Scaramucci said. “And the answer is it was clearly better.”
Betting on a NYC comeback
Scaramucci, who grew up on Long Island, is hoping to boost the battered New York City economy by hosting an in-person conference this September in Gotham.
SALT, Scaramucci’s flagship annual conference, announced last week it will move from the ritzy Bellagio in Las Vegas to the Javits Center on the West Side of Manhattan.
“It’s about revitalizing the city,” Scaramucci said, adding that the other reason behind the location change is luring heads of state who will be meeting at the United Nations around the same time.
SALT officials are promising to consult with local health officials and said the slimmed-down conference will feature health protocols like temperature checks, sanitation stations, mask wearing, social distancing, high-grade air filters, CO2 sensors and potentially requiring all attendees test negative for Covid-19 before entry.
Although he’s very optimistic about the rollout of vaccines, Scaramucci conceded there is a chance that September will prove to be too early to convene a large crowd in one of the hardest hit pandemic cities. That’s why SALT has a cancellation clause in its contract with the Javits Center and promised not to release the names of speakers until health officials give the event the green light.
“There are risks there. There’s no question about that. We could be sitting here in September saying it’s not appropriate to have a thousand people,” Scaramucci said.
1920s-style economic boom?
Bigger picture, Scaramucci is joining in the economic optimism taking hold in recent months. Major economists have been scrambling to upgrade their growth forecasts. Goldman Sachs is predicting the US economy will grow in 2021 at the fastest pace since at least the mid-1980s and the unemployment rate will tumble to just 3.7% by the end of next year.
“It would be hard not to be optimistic because you’ve got a tremendous amount of money being thrown at the problem,” Scaramucci said, referring to the one-two punch of spending by Congress and the Federal Reserve.
“If you can get a combination of an opening of the economy, people vaccinated and feeling safe, I think you could see an economic boom tantamount to what happened in the 1920s,” he said.
However, Scaramucci is worried all this stimulus causes asset prices to worsen America’s inequality problem.
“Interest rates are the physical gravity of financial assets. As they go down, assets go up. That is very good for wealthy people that control the assets but … it’s not good for middle and low income people,” he said. “It’s led to great political frustration and the rise of nationalism and populism that I don’t think is healthy.”
Next stop: Bitcoin $100K?
Like other investors worried about rock-bottom interest rates, Scaramucci is hedging his bets by investing in bitcoin. SkyBridge Capital now has a $500 million position in bitcoin across a range of funds.
“I was a bitcoin skeptic. I did a tremendous amount of work on it. I’ve now become a bitcoin investor,” Scaramucci said. “I am not a bitcoin evangelist. I’m not going to sit here and tell you that Moses and Jesus had a baby and the baby was bitcoin.”
Scaramucci said there is “no reason” bitcoin can’t climb from around $50,000 today to $100,000 by the end of the year.
But bitcoin is not for the feint of heart. The volatile cryptocurrency can lose thousands of dollars in just minutes – and then recover that ground just as quickly. Treasury Secretary Janet Yellen recently warned bitcoin is “extremely volatile” and a “highly speculative asset.”
“I would encourage people, if they want to buy bitcoin, to buy small, sleep-safe amounts,” Scaramucci said. “Something they can be comfortable not looking at a daily basis.”
Mainstream adoption is just beginning
Bitcoin is enjoying growing support from establishment players.
Tesla invested $1.5 billion in bitcoin and is letting customers pay for cars in the digital currency. BlackRock (BLK) said bitcoin could even eventually replace gold as a go-to safe haven investment.
But Scaramucci says bitcoin adoption is only just beginning — and will cause the digital currency’s value to rise into several hundred thousand as it gathers momentum.
Asked what inning bitcoin adoption is in, Scaramucci said “we are getting the first batter in the batter’s box, top of the first inning opening day of the season.”
“I don’t even know if the game has started yet,” he said. “This is so early.”