The Capitalist Comeback

INTRODUCTION

February 15, 2017

The vice president was calling.

I looked down at my phone’s display as the call came through and hesitated a moment before answering. This, I knew, could very well mean the end of a short but already arduous journey. It could also mean that journey was about to take a brand-new turn. The final answer was waiting for me on the other end of the line.

Just over two months before, Donald J. Trump, then president-elect of the United States, had asked me to serve as the twenty-seventh secretary of labor. He had a definite plan in mind in appointing me. For the first time since Ronald Reagan assembled his initial cabinet, an incoming president had chosen someone who had been both a laborer and a successful business executive to head the department that looks out for American workers.

I was very pleased at the prospect of serving. As someone who began as a worker—who worked his way through school while raising a family—I knew what it was like to live paycheck to paycheck, juggling bills and sometimes coming up short at the end of the month. As a business executive, I knew how government regulations designed to help workers can often have the perverse effect of hurting them, because they raise the cost of employment and make it harder, in the real world of business competition, for companies to hire new employees.

I had been writing and speaking about those issues for years, which is why I was nominated. I really believed I could reform the Labor Department so that America could have both strong worker protections and a robust and growing job market, where wages and benefits go up because companies need and want employees and must compete against one another for labor.

Of course, I knew that such ideas were anathema to many on the Left, particularly the current group of Progressive politicians who had gained ascendency in the Democratic Party in recent years. I knew they would fight my nomination, and given the divisiveness of politics in America today, I knew that the fight wouldn’t be pretty.

I was certainly right about that.

The Left’s attack campaign, designed to defame and disparage, began almost immediately. The intent was to discourage supporters and encourage opponents. And, of course, truth was the casualty.

For a little over two months, labor unions and other left-wing groups threw every charge they could at me. The personal charges were one thing; I was a trial lawyer for many years and I have a pretty thick skin. But, I hated the impact on my family. They took personally the attacks on me, and they were not safe from old-fashioned scare tactics. Fight for $15 union shills showed up at our front door, held a rally near our home, and drove through our neighborhood with a billboard claiming I abused women. A threatening package containing white powder was sent to our home. Interestingly enough, the media chose not to report on that incident, though they reported the claims against me in minute detail.

All the while, I was focused on the whirlwind of activity that surrounds a cabinet nomination. I had no idea about the extent of the vetting process nominees undergo; it is intense, exhilarating, and good preparation for posts subject to regular congressional oversight.

I worked daily with the Trump transition team to prepare for confirmation hearings before the Senate Health, Education, Labor and Pensions Committee—known in Washington slang as the HELP Committee. I was meeting with the individual senators on the committee as well as their top staffers, giving them a sense of my positions and getting to feel them out before I formally appeared in front of them.

And I was getting ready for the job, thinking about potential nominees for the sub-Cabinet posts, and planning how to implement the Labor Department’s piece of the president’s agenda for job creation.

But by early February, the attack campaign reached such a fever pitch, and the attacks leveled against me were such a constant presence in the mainstream media, that some Republican senators were beginning to get nervous.

Betsy DeVos, the secretary of education, had only just barely been confirmed, and the press was gleefully reporting that the new Trump administration was incapable of putting together a functioning cabinet. Senators were swamped with emails and phone calls in opposition to the DeVos confirmation as well as left-wing attacks at town hall meetings. If the barrage kept up, my own party could sink my nomination before I even got the chance to make my case in a hearing.

Vice President Mike Pence had been working with Majority Leader Mitch McConnell to count the votes and see where I stood. The vice president and I trusted each other and knew we could count on each other to be straight and to the point, even if we weren’t saying what the other wanted to hear.

Now, the vice president was calling with the results of his final conversation with McConnell. His words would determine whether I continued to gear up to face the HELP Committee hearing or began to pack my bags for home.

I pressed “Accept.”

“Hello, Mr. Vice President.”

I first met Donald Trump in May 2016 at the home of Tom Barrack, one of Trump’s longtime friends and major supporters who later served as chairman of his Presidential Inaugural Committee. Since the previous December, I had been having informal discussions on economic policy with members of Trump’s economic policy team. I also had similar discussions with staffers from the Jeb Bush, Ted Cruz, Carly Fiorina, Marco Rubio, and Scott Walker campaigns. I knew personally and had spoken and met with many of the front-running candidates.

Though I have been a conservative since the 1980s (I voted for George McGovern on my first trip to the ballot box), I am not, by nature, a “political” person. I had some involvement in the political process and often shared my views on economic policy, but by and large, the business of politics never appealed to me. I preferred the business of business.

My particular business was restaurants (quick service specifically). I was a lawyer by training, and I fell into the fast-food world in the mid-1980s, when I met Carl N. Karcher. Karcher had grown a small Los Angeles hot-dog stand into the successful Carl’s Jr. restaurant chain and was the head of its parent company, CKE Restaurants. In 1991, I became Karcher’s personal attorney and moved to California. In 1997, I became CKE’s executive vice president and general counsel.

I stayed with the company through its highs and lows for the next twenty years, becoming CEO in 2000. With a lot of hard work, we took CKE from near bankruptcy to become a fast-food powerhouse, with 3,800 locations in the United States and 40 foreign countries that generated, together with our franchises, over $4 billion in annual revenues and employed over 75,000 people in the US alone.

I have never felt shy about sharing my views on economic policy; perhaps that’s because I saw firsthand, from different perspectives, the real impact of government policy on working Americans. I believe it is important for political leaders to hear from those of us who personally know the importance of good jobs to working families, and who also know how government regulations can discourage companies from creating jobs by making it against their economic interests. I’d always been happy to support qualified candidates for office who understood that. But as for myself, I always felt more comfortable in the courtroom or the boardroom than in the political arena.

Perhaps that was part of what drew me to Donald Trump. He was decidedly not a typical politician. One of the things that struck me when I met him for the first time was how similar his mannerisms and personality were, in that small setting, to what I had seen on television.

His remarks were unscripted, freewheeling, and honest, a refreshing change from the prepackaged, poll-tested language of most politicians. He may have been a bit more understated in that setting, but Trump’s essence was unmistakable. When I shook his hand and spoke to him face-to-face for the first time, he was, above all, genuine. With Donald Trump, what you saw was what you got.

A few months later, in mid-July, I happened to be seated across the table from Trump at another dinner, this time at the home of Dr. Carla Sands, a real-estate investor in Los Angeles. I had been advising the Trump campaign, and as it happened, the Wall Street Journal was preparing to run a joint op-ed from myself and fellow Trump economic adviser Stephen Moore in the following morning’s paper.

We argued that Trump’s economic plan was vastly superior to Hillary Clinton’s, explaining, “Although we disagree with him on some issues, we have both signed on as economic advisers to Mr. Trump because we are confident in the direction he would take the country.” Specifically, we praised his pledge to repeal Obamacare and his plan to enact the most sweeping tax cut since 1981.

I mentioned the upcoming op-ed to Mr. Trump—I even pulled up the text on my phone and slid it across the table to him. We were unable to discuss economic policy in detail that evening, but he was obviously pleased to see the op-ed and clearly something got his attention. I would be seeing a lot more of Mr. Trump in the near future.

Shortly after that dinner, on July 19, my son and I watched from a suite overlooking the floor as Trump was formally nominated at the Republican National Convention in Cleveland. The contained chaos of the general election campaign followed, capped by Trump’s stunning win on November 8 despite nearly all pollsters and pundits predicting a runaway Clinton victory.

I was certainly pleased that we were going to have someone with sound economic ideas in the White House to clear away the rubble of the Obama years. However, I had to turn my mind to more immediate matters. Just a week after the election, I was due to speak at the Restaurant Finance & Development Conference, which kicked off on November 14 in Las Vegas.

Radio and TV host Hugh Hewitt was also speaking at that conference and, totally unbeknownst to me, had decided to aggressively promote me in his remarks as a candidate to be the next secretary of labor. I may never know whether this was coincidence or not, but in the midst of that conference, I got a call from Vice President-elect Mike Pence. I had known Pence since his days in Congress, and saved his number in my phone, so my dining companions were able to see “Mike Pence” show up on the display when the call came through. One of them leaned over and said, “You’d better take it.”

Pence called to invite me to the Trump National Golf Club, Bedminster in New Jersey to meet with the team about joining the administration. He specifically mentioned the idea of my heading up the Small Business Administration. I agreed to meet, and a few days later, on November 19, I found myself in a room with Pence, Reince Priebus, Steve Bannon, and Donald Trump.

I had entered with some general ideas about how to run the Small Business Administration, but the president-elect raised the possibility of my becoming secretary of labor.

Without any hesitation, I told him I was interested. Here was a chance to help craft policies that would get America back on track toward real economic growth and more people employed at good-paying jobs. Trump asked what my plan would be, and I told him that it boiled down to two simple ideas. First, I wanted to protect American workers by creating more jobs to increase their wages and benefits. Secondly—to accomplish the first goal—I wanted to reform any regulation that hampered economic growth, while at the same time implementing every policy I could that would increase growth. Trump took it in and told me that was exactly what he was looking for.

The meeting ended on a good note, but the president-elect was noncommittal, and Priebus was cautious. That was to be expected; staffing a new administration is a delicate business, like putting a jigsaw puzzle together, each piece having to fit in with the overall picture. But I felt that after the interview I was on the short list for secretary of labor.

The president-elect and I shook hands before the assembled media. As I walked away, one reporter shouted, “What did he offer you, Andy?” I responded truthfully, “I’d be happy to do anything I could to help the president succeed.”

After the meeting at Bedminster, the waiting game began. I knew there were other people under consideration for secretary of labor, including at least one serving member of Congress. While I thought the meeting with Trump and his senior advisers had gone well, I knew it was possible they could choose someone else for the job and that I might end up at the Small Business Administration after all—or potentially somewhere else altogether. I did believe, from the amount of interest that the president-elect and his team had expressed, that I would end up somewhere.

I was ready for that. In January, I had informed the Executive Committee at our company that, at age sixty-five and after fifteen years as CEO, I was ready to pass the leadership baton when they found a replacement. In recent years, my interest in public affairs and my desire to give back to the country that had given me so much had grown. They were months into the search for a replacement when I met with the president-elect.

Wherever I wound up, I was determined to support President Trump and make the most of this chance to bring real free-market ideas back to Washington and to actually help American workers instead of leaving them at the mercy of government intervention. I went to work, studying up on policy materials and outlining policy recommendations, much as I’d done during the campaign.

Finally, the summons came from Trump Tower in Manhattan, the headquarters of the presidential transition. When I arrived for my meeting on December 8, all I was told was that President-elect Trump wanted to speak with me. When I was shown into Trump’s office, I found the same cast of characters from the Bedminster meeting (except the vice president), only in a different setting. There, once again, were Steve Bannon and Reince Priebus, and of course, behind the desk piled high with papers, Donald Trump himself.

“Andy, I’m going to give you the job,” he said, getting straight to the point as usual.

I gave the only reply I could think of. “Thank you, Mr. President, but just so we’re clear, which job?” As far as I knew, I was in the running for at least two different positions.

“Secretary of Labor,” Trump responded immediately. “You had it from our first meeting.”

I left Trump Tower excited. Now it was time for the real work to begin. For the rest of December and into the New Year, I was coordinating with lawyers and others on the transition team to make sure all my financial disclosure and ethics forms were in order. Contrary to later press coverage, all my filings with the Office of Government Ethics were turned in by January 3, 2017—among the earliest of any of the new cabinet nominees. Meanwhile, I was back at the books, reading policy papers, studies, and economic forecasts and working to fine-tune my own position statements.

In the end, I decided on a succinct four-point plan to help turn the Department of Labor from an advocate for bigger government and an abettor of Big Labor into a force that put the American worker first. As has become obvious since his election as Chairman of the Democratic Party, the prior secretary of labor, Thomas Perez, was a Progressive and a strongly (very strongly) partisan big-government Democrat. There was going to be a lot of work getting the Department of Labor refocused on helping create jobs and increasing wages and benefits rather than growing government and supporting Big Labor.

To begin with, I wanted to zoom in on one of the most vulnerable sectors of the American workforce by increasing opportunities for employment among minority communities and in large cities. Tens of millions of Americans who could work and who wanted to work were stuck, unable to find jobs, and that spawned negative ripple effects across entire communities.

I hoped to increase efforts to help people in these high-risk areas find good-paying jobs that would double as investments in their communities. There was a lot of government red tape preventing that from happening, and it was past time for it to go. Our immigration policies also needed a closer look. It seemed counterproductive to allow low-skilled workers to immigrate in large numbers when there were millions of citizens who could work receiving unemployment.

My second priority was also aimed at increasing employment by expanding opportunities for education and training. It was a tragedy that hundreds of thousands of good-paying, skilled-labor jobs remained open in America simply because potential workers lacked the necessary training.

I felt we could easily address this problem by working more with the private sector on worker training programs to match workers with the jobs that actually exist. I also hoped we could work together on vocational and technical training programs, like apprenticeships or internships for unemployed or underemployed Americans. I wanted the Department of Labor to have a constructive role, working with the private sector to accomplish this goal.

My third priority reflected my own experience. I got married and had a family at a young age. I had three children by the time I graduated from law school at age twenty-eight. I felt that workplace policies should better reflect the needs of young families and that there was a role for government to push in that direction.

I wanted to implement the president’s desire for paid family leave, and I believed that if it was done with sensitivity toward the realities of business—and particularly if the rest of our economic agenda resulted in a healthy labor market—it would be possible to enact paid family leave in a way that did not discourage hiring and job creation.

For years, I had been preaching that America could have both strong worker protections and a strong labor market. The family leave issue was a chance to put that theme to work and create a model for similar reforms in the future.

My final priority, which would have helped the entire department run more smoothly to accomplish the first three, was to start swinging the axe in the overgrown forest that government regulation of the private sector has become.

It was essential for Washington to understand that while regulation is necessary and can be quite beneficial, it can be devastating to the job market unless it’s done in a way that is sensitive to how businesses really think and react.

Regulations undermine job creation far more than most Americans know, and far more than taxation. Like most Americans, I’m not a fan of taxes. I believe it is always better for Americans to keep more of what they earn. But, when done properly and with the intent of raising revenue rather than punishing success or redistributing income, taxes do at least have the benefit of generating revenue for the government. Regulations, on the other hand, usually lower revenue because they stunt economic growth. So, unless a regulation delivers real progress toward some social goal, it is a net loss for everyone.

I believed that regulatory reform held the promise of spurring economic growth, increasing government revenue, and improving the job market, all while making worker protections more effective. I was looking forward to making that point, especially to left-leaning senators and members of Congress.

Armed with this plan, I went forward to the next challenge: going to Washington for meetings with the senators on the HELP Committee over the course of January and early February.

Senate Majority Leader Mitch McConnell and Senator Lamar Alexander from Tennessee, the HELP Chairman, were extremely welcoming and helpful from the very beginning. All my meetings with the Republican committee members went well. There was not a hint of awkwardness. In fact, one of the most enjoyable was my session with Senator Susan Collins from Maine, which was to prove somewhat confusing considering future events.

Many of my meetings with Democratic senators were constructive as well considering none of them expected to be sitting across from a Republican cabinet nominee.

It was clear to me after meeting with the Democratic HELP members that these senators were still somewhat in shock after the November election. They clearly had bought into the popular notion that demographics had changed, Republicans could not win the presidency, and Hillary Clinton had the election locked up. I got the sense that in their minds, Democrats were destined to hold the White House for decades. And yet, there I was, a Republican nominee for secretary of labor, sitting across from them. I was a messenger from reality in a suit and tie.

Despite this, I got along with many of the Democrats with whom I met. Senator Christopher Murphy from Connecticut asked particularly thoughtful questions, and I thought we established a good rapport. My meeting with Senator Tim Kaine from Virginia was especially cordial, which surprised me considering he had just been defeated as Clinton’s running mate. But he and I got along so well that I genuinely felt, in a less fractious political climate, he would have voted for me. My meeting with Senator Michael Bennet from Colorado was similarly upbeat. Indeed, none of the Democrats, though they may have pointed out their ideological differences, expressed any doubts about my eventual confirmation.

Perhaps the most pleasant surprise was my sit-down with Senator Bernie Sanders from Vermont. I had geared up for this one, expecting him to waste no time tearing into a CEO who had been fool enough to cross his office threshold. In reality, Senator Sanders acknowledged our differences (he is an admitted Socialist after all) but seemed open to discussing common ground, and of that we had more than I expected.

Indeed, in my own notes I quoted a floor speech of his from 2013 in which he said that rising numbers of Americans with little education and little to no job skills were “creating a permanent underclass” and that “the best anti-poverty program is a paycheck.” I agreed, and I hoped to address this with more education and job training, if confirmed.

Additionally, while we both recognized that free trade could benefit everyone, we agreed that it was important to negotiate better trade deals with an eye toward protecting the working class from the pain those deals can bring.

Meeting with Senator Al Franken from Minnesota proved to be a strange experience. It was almost as if I met with two different people. At the outset, he seemed to make it a point to be as obnoxious as possible. I wasn’t even treated to the legendary wit that made him so famous on late-night TV. He just seemed to be in a foul mood.

When I mentioned my interest in additional vocational training and apprenticeship programs, his reaction, to my surprise, was to take offense. “I introduced a bill on that in 2013,” he informed me, haughtily demanding, “How could you come in here without knowing that?” I apologized for the oversight but added that now I knew of his interest in that area and I hoped we could work together on these initiatives under the Trump administration. To that, he was noncommittal.

Midway through our meeting Senator Franken was called out of the room. When he returned, his demeanor had done a 180-degree turn. He was more jovial and interested, and the second half of our meeting went much better than the first. I don’t know what caused the change in demeanor, but whatever happened certainly gave me a break!

Perhaps he decided that since we already agreed on at least one key issue, maybe it was time to stop being so hostile. Senators often use a carrot-and-stick approach to these interviews. Franken may have thought he had used the stick enough and needed to inject a little carrot into the interview. I mentioned that his fellow Saturday Night Live alumnus Dennis Miller and I were friends, and the mood lightened considerably. I was sure the senator would vote against me, but I thought we might actually be able to work together.

Sadly, Senator Elizabeth Warren from Massachusetts offered little in the way of surprises.

Senator Warren seemed to have made up her mind about what I believed, and nothing I said could have swayed her. She expressed concern with what she assumed was my opposition to increasing the minimum wage, an opposition fabricated by the left-wing press and subsequently repeated in her book despite our meeting. I had to explain to her that I had never opposed raising the minimum wage. In fact, I thought it should be raised, but I was opposed to raising it to the point where it would kill entry-level jobs.

Met with indignant skepticism, I told her that she could confirm this by speaking with anyone at the National Restaurant Association or the International Franchise Association as I had been trying to convince both organizations to get behind such a minimum wage increase for the past two years. I told her our differences on the issue were not on whether it should be raised but rather how much.

Taken aback, she then claimed there was no evidence that substantial minimum wage increases would kill American jobs. That’s simply untrue. Among other things, I referred her to a Congressional Budget Office report from 2014 where the CBO stated that increasing the minimum wage to $10.10 “would reduce total employment by about 500,000 workers.”¹ She argued that this was just an average and that the CBO had actually given a range of possible outcomes that acknowledged the impact could be a “very slight reduction.”

I was intimately familiar with that report, and I knew she was cherry-picking data from the most favorable scenario among the many it discussed. I pointed out that the upper end of that range was the loss of one million jobs and that, as I had stated, the CBO’s projection was a loss of some five hundred thousand jobs. I explained that I felt it was safest, when forging policy, to consider the CBO’s actual estimate, but she refused to accept that.

Perhaps Senator Warren’s display of hostility was for the benefit of the two staffers who accompanied the senator and who had apparently been instructed to sit behind her with stony glares on their faces and glower unspeaking throughout the whole meeting. I made it a secondary objective to get at least one of them to crack, and by keeping the mood light, I did manage to get one to smile by the end.

At the same time as I was making my case to the senators one by one, the media was full of stories in which my opponents launched smear after smear against me, personally and professionally. They brought up the undocumented housekeeper my family had employed years ago. I thought that incident should have weighed in my favor, because once I realized her immigration status, I discharged her and then offered to help her document her status with the authorities. In other words, over five years before I had any thought of serving in public life, when it would have been easy for me to ignore the unlawful status of a worker in my home, I acted when that status came to light.

The negative media coverage continued to grow. In mid-January, Senate Minority Leader Schumer made it clear that I was “one of the Democrats’ biggest targets in the confirmation hearings.”² The media heard him and continued to rehash allegations of spousal abuse that my ex-wife had made during our divorce almost thirty years ago.

The irony is that my former wife, Lisa, and I have a great relationship. Shortly after our divorce became final, Lisa acknowledged that the charges she had made were wholly untrue. She stated that she had made them at the behest of her lawyer, who thought they would give her an advantage in the divorce and who had a personal political vendetta against me. She repeated this in discussions with reporters and HELP Committee staff who called to speak with her.