The Perils Of A Financial Transaction Tax


Following the GameStop saga, D.C. lawmakers have renewed calls for the imposition of a financial transaction tax (FTT). FTTs—essentially a tax on every stock market trade—are often cited as an easy way to collect tax revenue and reduce volatility in equity markets. However, the data is pretty clear that these cited benefits are significantly overblown.

First, let’s dig a little deeper into what an FTT is. At its most basic level, an FTT is a tax applied on either the buyer or seller of a security at the time of a financial transaction. These taxes can be implemented to involve specific types of securities, or be applied selectively to certain types of investors. There have been numerous different legislative proposals in recent years, but the latest one was introduced by Sen. Brian Schatz (D-HI) and would impose a tax on the sale of stocks, bonds, and derivatives at 0.1%.

Sen. Schatz and others have indicated an FTT would reduce financial market volatility and market speculation. In fact, an FTT may actually deteriorate market quality, reduce liquidity through increased bid-ask spreads, and increase market volatility. Let’s explore why.

An FTT Will Make Markets Less Efficient

A large pillar of support for an FTT stems from the belief that high frequency trading (HFT)—the use of powerful computers to conduct a high number of trades in fractions of a second—and electronic trading cause volatility due to speculative trading. These attacks have been proven time and again to be false, and research has confirmed that these innovative trading practices have increased market efficiency, liquidity, and stability, creating a more reliable equity market structure that better serves investors during times of stress and calm alike.

Further, evidence from other countries which have implemented FTTs show they do not improve markets. Stocks subject to an FTT in France were traded less frequently, increasing spreads relative to their peers, hurting investors, and decreasing market efficiency. (A bid-ask spread refers to the gap between the ask price and the bid price for an asset in the market; a narrower spread signals high liquidity and efficiency and low transaction costs.) Research on France’s FTT published in January 2021 in the International Review of Finance concluded, “FTTs deter informed trades and reduce market quality.” A similar study published in the Journal of Financial Services Research in 2014 found that the French FTT had a significant impact on market quality, dropping trading volume by one fifth and resulting in a reduction in volume posted at best prices. Similarly, the European Central Bank found evidence that an Italian FTT, “widened the bid-ask spread and increased volatility” in a 2016 research report on the effects of the FTT.

In short, the observed impact of FTTs is that they discourage short term trading, disincentivizing transactions that help stabilize markets and generate price efficiency.

An FTT Isn’t The Revenue Machine Proponents Promise

FTT proponents may acknowledge that the tax might make markets less efficient but that it is worthwhile because it will bring in new tax revenue. That assertion requires a lot of caveats; perhaps most important among them is that the revenue will be raised on the backs of Americans saving for retirement.

Any American with a 401(k), for example, would be subject to the tax every time their fund buys or sells a stock or bond. More than 54% of Americans are invested in the stock market, either directly or through a retirement fund such as 401(k) or IRA, and over 40% of Americans are invested in college education savings plans such as 529.

The impact on retirees would be particularly severe. Consider that 401(k) savings plans primarily benefit middle class families, with 80% of participants in 401(k) plans making less than $100,000 per year, and 43% of participants making less than $50,000 per year. For this group, a 10-basis point (0.1%) FTT would force an average investor to work nearly 2½ years longer than what they would have to work in order to reach the same savings goal without an FTT, according to the investment firm Vanguard.

Further, at a time when we need to spur as much investment into the American economy as possible, an FTT would be an inefficient investment mechanism as it will hinder private sector investment and may fail to materialize the revenue it promises. 

According to a 2011 letter from the nonpartisan Congressional Budget Office, an FTT  “would raise the costs of financing investments to the extent that it made transactions more expensive, financial markets less liquid, and management of financial risks more costly.” As a result, many businesses, as well as state and local governments, looking to finance their activities would face higher costs of borrowing. For example, although municipalities wouldn’t have to directly pay the tax when they issue securities on the market, investors may likely seek higher interest rates on them as they would have to factor the tax into the purchase or sale of these securities on the secondary market. These higher interest rates could in turn hinder government investment for a range of crucial services.

Furthermore, researchers at the CBO also found that a financial transaction tax would affect the funding of state and local pension plans. “Besides initially reducing the value of their existing assets slightly, the tax would raise transaction costs for pension plans. Both of those effects would increase required contributions to the plans,” the letter states.

Critically, the revenue-generating potential of an FTT remains uncertain. A tax that is too high or too narrow could create distortions by encouraging investors to either leave the market or create “synthetic” securities to yield the same economic return without being subject to the tax. According to the Congressional Research Service, “at this point, it is difficult to predict exactly how traders’ behavior will change in response to a tax.”

The Final Word

An FTT is not a new silver-bullet tax policy. Based on results and analysis conducted on the FTTs in France, Italy, and Sweden, it’s clear the policy too frequently over-promises in rhetoric and under-delivers in practice. There are plenty of substantive enhancements that could help strengthen current market dynamics, but an FTT is not one of them. Federal policy should be designed to foster innovation, expand access, and enhance market quality for a U.S. financial system that remains the premier global market. Policymakers should turn their attention to better developed policies that ensure U.S. capital markets remain deep and liquid while delivering positive returns for retirees, pensioners, and investors.


Inside The Biden Administration’s Use Of Financial Regulators To Fight Climate Change


The Biden Administration is implementing a robust climate change agenda across the executive branch with a particular focus on the role U.S. financial regulators can play in addressing climate risks. On May 20, the White House issued an executive order that would look to leverage both the public and private sectors to address climate-related financial risk. It’s an example of what the President calls his “whole-of-government” approach—similar to Treasury Secretary Yellen’s “whole-of-economy” approach.  

HPS has spent the past several months closely monitoring the actions of financial regulators and has compiled relevant agency announcements, which demonstrate how the Biden administration will seek to use the financial sector to curb climate change.

HPS focused its research on the most active financial regulators, including:

– The Department of the Treasury, with a focus on its domestic and international activity, as well as the work of its new climate czar

– The Financial Stability Oversight Council

– The Securities and Exchange Commission

– The Federal Reserve

Based on this research into the executive branch and Federal Reserve’s current positions and actions, combined with additional insights and analysis, HPS has laid out a roadmap of the likely future policy plans related to finance and climate policy.

Department of the Treasury – Domestic Policy

Key Actions:

Via the American Jobs Plan, Treasury would create tax credits for clean energy production to support the Clean Energy Standard and establish a targeted investment tax credit to incentivize the buildout of >20GW worth of high-voltage power lines.

– Treasury Secretary Janet Yellen and Deputy Secretary Wally Adeyemo discussed leveraging the tax code to eliminate fossil fuel subsidies and drive the U.S. towards net-zero emissions at an April 16 meeting.

– Secretary Yellen met with the Coalition of Finance Ministers for Climate Action on April 6 and said that Treasury is prioritizing domestic economic programs and tax policies that would help the U.S. reach its 2030 emissions target.

– The “Financial Stability Board’s Task Force on Climate-Related Financial Disclosures” was lauded by Treasury Secretary Yellen as a “solid framework for climate disclosures.” The Secretary also urged “national and regional authorities that are developing requirements or guidance” to use the framework as a model.


The Biden administration and Secretary Yellen have made it clear that Treasury will be at the center of U.S. attempts to meet its 2030 emissions targets, which were officially announced by the White House during the climate summit. The goal is to cut CO2 emissions to 50-52% of their 2005 levels.

In remarks to the Institute of International Finance on April 21, 2021, Secretary Yellen reiterated that the Treasury Department will take what she has called a “whole-of-economy” approach to its efforts to address climate change. Secretary Yellen clearly recognizes, and has emphasized, that the goals the Biden administration and progressives have put forth require the cooperation of the private sector. We expect Treasury will continue to make a concerted effort to include both private and public stakeholders in their efforts to marshal resources towards cleaner, sustainable investments.

Department of the Treasury – International Policy

Key Actions:

– Treasury was called on by President Biden via his U.S. International Climate Plan to direct multilateral development banks (MDBs) to “set and apply ambitious climate finance targets and policies,” thereby spurring private financing in developing countries.

– Secretary Yellen will be working with OECD countries to modify official export financing provided by OECD export credit rating agencies so that it encourages investments away from carbon-intensive activities.

– Secretary Yellen also announced that part of Treasury’s strategy will involve allocating $100 billion per year to support developing countries’ climate change mitigation efforts.

– Treasury will be co-chairing the relaunched G20 Sustainable Finance Working Group, which gets finance ministries and central banks to improve the international community’s approach to sustainable investments and climate disclosures.


Secretary Yellen has repeatedly emphasized the need to build international cooperation on climate-related investments and disclosures. Secretary Yellen and Treasury recognize the U.S. needs to garner the support of worldwide actors, including developing countries, to achieve significant progress on climate change and to ensure that American efforts don’t place the country at a competitive disadvantage. Climate Envoy John Kerry is likely to lead those efforts and play a central role in facilitating said relationships albeit in close coordination with Treasury.

Treasury Department has expressed that it wants to see countries require “reliable, consistent, and comparable” climate-risk financial disclosures. It has also indicated that it would like to support international efforts to “better identify climate-aligned investments and encourage financial institutions to credibly align their portfolios and strategies.” Since developing countries are quickly becoming large emitters on their paths to economic growth, we expect Secretary Yellen to incentivize the adoption of clean energy alternatives to ensure these countries cooperate.

Department of Treasury – The Climate Czar

Key Actions:

– John E. Morton was chosen by Secretary Janet Yellen to be the Treasury Department’s first climate counselor, or “czar,” on April 19. Morton will report directly to Secretary Yellen.

– In his new role, Morton will head the new “climate hub,” which is tasked with coordinating climate-related work across the Department—this includes the divisions in charge of domestic finance, international affairs, and tax policy.

– The climate hub’s main priority will be to facilitate new investments in clean energy technologies that can help expedite a transition away from fossil fuels in “high emitting sectors and industries.”

– Under Morton, the climate hub will use taxes and various other economic tools to support infrastructure projects that can withstand extreme weather, reach out to communities vulnerable to extreme weather and/or pollution, and ensure that the transition to cleaner energy “provides economic opportunity across income levels.”


Progressives have voiced their displeasure with the Morton pick, criticizing his connection to the private sector and expressing concerns he may think “climate action can happen voluntarily.” Many of said progressives expressed that they would have preferred Secretary Yellen appoint former Deputy Treasury Secretary and Federal Reserve governor Sarah Bloom Raskin, for she has been an activist for greater regulation of financial firms’ climate-related activities. This could present a challenge to Secretary Yellen and Morton as they try to make headway on their priorities. We anticipate Morton to make public and private overtures to progressives, especially on policy proposals involving the private sector. 

On the international front, Morton, like Secretary Yellen, has communicated that he will seek to “mobilize more private capital to developing countries to help them transition to a lower-carbon economy” by using MDBs. Expect Morton to frame many of his actions as a competitive race between nations and an opportunity for the U.S. to lead on the world stage. 

Financial Stability Oversight Council (FSOC)

Key Actions:

– The Climate-Related Financial Risk executive order issued by President Biden directs the Financial Stability Oversight Council (FSOC), which is led by Secretary Yellen and includes Federal Reserve Chair Jerome Powell and members of the Securities and Exchange Commission, to produce a report on climate change financial risk data by September 17, 2021.

– The first FSOC meeting of the Biden era was held on March 31 of this year with climate change at the top of the Committee’s agenda. It was the first time that FSOC has focused on climate change since it was established by Congress in 2010.

– President Biden’s U.S. Climate-Related Financial Risk executive order directed FSOC to put together a report, within 180 days, detailing the systemic risks posed by climate change.

– On April 6, Secretary Yellen said that FSOC would work to minimize the potential system-wide consequences posed by financial risks associated with climate change. 

– Secretary Yellen has indicated she would like FSOC to “bring regulators together to share perspectives and identify elements and solutions” to appropriately address the effects of climate change on regulated institutions.


Though the Financial Services Oversight Committee (FSOC) hasn’t traditionally been an active player in the climate debate, progressives have been pushing for the committee to consider the systemic risks posed by climate change. Treasury Secretary Yellen has made clear that it will be one of the Department’s primary tools to minimize climate-related financial risks. She views FSOC’s role as a means to “understand [financial-sector risks associated with climate change], to coordinate across U.S. regulatory agencies in assessing the risks and, if necessary and appropriate, acting to mitigate risks to overall U.S. financial stability.” President Biden’s May 20 Executive Order also underscores FSOC’s key role. 

We expect that many of Treasury’s climate policy announcements and decisions will be made at or through FSOC. Further, we expect the FSOC report mandated by Biden’s executive order to home in on the role of financial institutions, asset managers, and insurers in minimizing climate-related financial risk.

Securities And Exchange Commission (SEC)

Key Actions:

– Shortly after President Biden’s inauguration, Acting Chair Allison Herren Lee set the stage for SEC action on climate by issuing a request for comment on climate change disclosures.

– Along with a request for comment, the SEC began evaluating climate disclosure rules to facilitate “the disclosure of consistent, comparable and reliable information.”

– The SEC Division of Enforcement formed a Climate and ESG Task Force which “will develop initiatives to proactively identify ESG-related misconduct.”

– The SEC Division of Examinations launched an enhanced focus on climate and ESG-related risks and later issued a “risk alert” on ESG investments.

– The SEC Division of Corporate Finance reviewed climate disclosure, which resulted in SEC Acting Chief Accountant Paul Munter urging accountants to consider Financial Accounting Standards Board guidance on how ESG could impact accounting and management disclosures.


With Gary Gensler’s confirmation as SEC Chair and Satyam Khanna serving as Senior Policy Advisor for Climate and ESG, the SEC is expected to aggressively move forward on evaluating its climate agenda.

Gensler, who originally received strong support from progressives, was criticized for naming a corporate defense lawyer as Director of the Division of Enforcement, prompting her to resign. Sen. Elizabeth Warren said Gensler has a chance for a “redo,” suggesting that he will act quickly on progressive priorities, such as climate disclosure.

During his Senate Banking Committee confirmation hearing, Gensler signaled support for issuing a disclosure rulemaking on climate risk. However, Gensler must deal with competing priorities and is targeting the second half of 2021 for SEC action on climate risk disclosure, as regulatory changes would require a lengthy rulemaking process. Expect pushback from Republican Commissioners Hester Peirce and Elad Roisman, who have questioned the SEC’s increased focus on climate. Republican members of Congress, led by Sen. Pat Toomey (R-PA), will also criticize SEC action on climate.

Federal Reserve

Key Actions:

– During the Trump administration, the Fed took its first steps towards addressing the climate. For instance, in November, the Fed formally named climate change as a risk to financial stability. In December, the Fed joined the Network for Greening the Financial System as a member.

– Since President Biden’s inauguration, the Fed’s efforts have only accelerated. In March, the Fed unveiled its framework for analyzing the financial stability implications of climate change. The framework, which is a work in progress, was presented at the FSOC meeting.

– The Fed also recently announced the creation of the Supervision Climate Committee (SCC) to strengthen the capacity to assess financial risks from climate change. To complement its work, the Fed also established the Financial Stability Climate Committee (FSCC) to assess and address climate-related risks.

– Fed Chair Jerome Powell has stressed before Congress that the role of the Fed is to carry out its mandate in supervising that financial institutions are accounting for risk, including climate change.


With climate change at the center of the U.S. and global political agenda, the Fed will continue to address the issue as it relates to financial stability. However, the Fed will continue to face warnings of politicization. Republican lawmakers have argued that climate policy remains outside of the Fed’s jurisdiction. 

Last December, in a letter to Powell, 47 GOP lawmakers discouraged the central bank from imposing stress tests on lenders to measure their vulnerability to climate change.

Then again in March, Senate Banking Committee Republicans told Powell in a letter that they were concerned the Fed might use its supervision of the banking system to “further environmental policy objectives,” which “would be beyond the scope of the Federal Reserve’s mission.”

Powell is now seen as a heavy favorite on Wall Street to be nominated for a second term, which was not the conventional wisdom when Biden took office. If Powell is nominated for another four-year term in early 2022, expect Republicans to make his climate focus a point of emphasis during his confirmation hearing, but Powell and the Fed are unlikely to be deterred from including climate change in its policy considerations.


The Biden Administration has made clear that financial regulators play a critical role in the fight to curb climate change, and it will continue to receive pressure from progressives to execute an aggressive climate agenda. As Biden’s political appointees get settled into their roles, expect the pace of climate-related policy actions coming from financial regulators to accelerate, leaving no potential vehicle for progress untouched. However, opposition from Republicans will remain stalwart, and if the economic recovery from the COVID-19 pandemic continues to fall below expectations, the political appetite for vast changes to the economy could waver, making implementation of the climate agenda more challenging. 


HPS Insights: New Podcast Series On Finding A Job In DC

After a year of immeasurable uncertainty, soon-to-be graduates may feel daunted by the DC job search. That’s why HPS is launching a new HPS Insights series, “How To Get A Job In DC,” to demystify the steps students can take in making the leap into the professional world of Washington. 

In this four-part series, HPS Partner Matt McDonald sits down with a number of Beltway veterans to talk about how current college students can prepare for and thrive during their first DC job. Matt talks with public policy experts, executives, program directors, and our very own HPS associates on their experience and tricks of the trade. Conversations cover both how college students can set themselves up for success in the recruiting process and also how to succeed once hired. 

Our episodes are as follows:

Episode 1: How To Get A Job In DC – Preparing For The Working World At School

Matt sits down with job search experts from the Harvard Kennedy School, University of Michigan, and the Batten School of Leadership and Public Policy at the University of Virginia. Each guest shares advice on what campus resources current college students can tap into to prepare them for a post-grad world.

Episode 2: How To Get A Job In DC – Preparing The Perfect Resume

In this episode, we demystify the job application process with experts from Dartmouth who reveal how to translate your story into a compelling application. We discuss pitfalls into which students often fall – conceptualizing their resume as a summary, submitting cover letters that don’t demonstrate familiarity with the company, and more.

Episode 3: How to Get A Job In DC – The Insider’s Take On How To Network In DC

Next, Matt and his guests explore the process of networking to break down the all-important topic of relationship building and explain how young professionals can find their path forward in the murky world of DC careers. 

Episode 4: How To Get A Job In DC – Succeeding In Your First Job

In the final episode, Matt chats with three HPS associates, Cole Kline, Matisse Rogers, and Koby Gordon, about how to approach the beginning of your career and make the most out of your first job out of college. 

To learn more about navigating the job search, and preparing for an exciting career in the 202, tune in to the series here or on your favorite podcast service.


HPS Welcomes Class of 2021 Associates

WASHINGTON, D.C. — Hamilton Place Strategies (HPS) is pleased to congratulate the class of 2021 on their recent and upcoming graduations and is excited to welcome our newest class of associates and analysts to the firm.

– Elizabeth Johnson, Boston College
– Ugonwa Okonkwo, Brown University
– Carley Lerner, Duke University
– Jessica Soforenko, Emory University
– John Olds, George Washington University
– Joshua Eli-Azar Gonzalez, Gettysburg College
– Grace Bannister, Harvard University
– Faridat Animashaun, Howard University
– Jack Eichner, University of Michigan
– Michael Taffe, University of North Carolina at Chapel Hill
– Anna Lisa Lowenstein, University of Pennsylvania
– Kushal Modi, University of Pennsylvania
– Lauren Ott, University of Virginia
– Parker St. Jean, Wake Forest University

“Congratulations to HPS’ incoming class of associates and analysts on their graduations. It’s been a challenging year and our applicants have continued to demonstrate incredible resilience and growth,” HPS Partner Matt McDonald said. “We are confident this class will help us successfully take on the increasingly complex issues in the world today, and we are thrilled to welcome them to our team.”

The associate and analyst program is an integral part of HPS’ commitment to recruiting top talent to deliver the best possible outcomes for our clients. Recruiting takes place each fall, and new hires join after graduation the following year.


HPS Announces New Directors Cailin Schmeer, Patrice Smith, And Michael Sargent

WASHINGTON, D.C. – Hamilton Place Strategies (HPS) announced today that Cailin Schmeer, Patrice Smith, and Michael Sargent have joined the firm as directors. 

“I’m thrilled to welcome Cailin, Patrice, and Michael to HPS,” said Tucker Warren, a partner at HPS. “Their experience working in the public and private sectors on some of the most pressing issues of our time will be of great benefit to our clients and to the HPS family at large.”

Cailin joins HPS from the U.S. Department of Treasury, where she served as the chief speechwriter to Secretary Steven T. Mnuchin and a director of public affairs, focusing on the Paycheck Protection Program, the Financial Stability Oversight Council, and other domestic finance programs. Prior to joining the Treasury, Cailin spent several years at the Pentagon in both policy and public affairs roles. She served as the chief of staff for special operations and low-intensity conflict policy and as a public affairs advisor. At the Department of Defense, she regularly advised four star-equivalent civilians on media relations, message development, and policy rollouts.

“I am incredibly excited to work alongside the highly talented team of strategists and communicators at HPS,” Cailin said. “Our clients face complex challenges, and I am eager to help solve them by applying my executive branch experience to the firm’s analytical approach to communications and public policy.”

Prior to joining HPS, Patrice served as a communications director in the U.S. House of Representatives. Patrice also worked in the office of U.S. Senator Tim Scott (R–SC), where she served as a speechwriter and media relations liaison. Additionally, she has broad experience with public relations and public affairs agencies in southern California and Washington, D.C., working on projects involving a range of clients, including Bill Conti, Hewlett-Packard (HP), Shell Oil Company, Genesis USA, Federal Realty Investment Trust, CNN commentators, and others.

“I am excited to join a great group of policy-minded communicators in Washington,” said Patrice. “After spending time on the Hill, it is a great experience to learn how things operate outside of the Capitol. I look forward to growing with HPS and learning from my colleagues.”

Michael joins HPS from Madrus LLC, a strategic transportation and infrastructure consulting firm, where he served as director of policy and research. There, he spearheaded research, strategic advisory, and policy development projects for Madrus’ clients, including investors, corporations, and governments. He also spent over four years in various economic policy roles at the Heritage Foundation, most recently as a policy analyst leading the Foundation’s research and advocacy efforts for transportation and infrastructure issues. In addition, he has worked on and advised several political campaigns.

“HPS’ unique analytical approach to public affairs not only provides immense value to its clients, but also improves the quality of public policy debates,” said Michael. “I am thrilled to join HPS’ leading team of policy and communications professionals.”


Record Highs, Record Lows Reflect Mixed Bag For Consumer Confidence

Overall economic sentiment fell for a third time in four readings, as the HPS-CivicScience Economic Sentiment Index (ESI) dropped 0.5 points to 50.1. This week’s reading marks the breaking of two records: Confidence in the job market reached a record high for the second reading in a row (rising 4.1 points to 59.0) even as confidence in the housing market reached a record low, dropping 3.1 points to 38.4.

Although vaccination rates continue to increase and states gradually begin to ease pandemic-related restrictions, the country’s economic recovery faces a variety of headwinds. April jobs numbers released last week landed well below expectations as the unemployment rate increased to 6.1%, while expectations of future inflation reached their highest point since 2013. In addition to record-low confidence in the housing market, the other ESI indicators to fall this reading were:

 – Confidence in personal finances dropped 1.4 points to 57.4

– Confidence in the overall US economy dropped 1.3 points to 52.0

– Confidence in making a major purchase dropped 0.9 points to 43.6

The ESI’s three-day moving average began this reading’s two-week stretch on April 28 at 51.9, rapidly dropping to its two-week low of 48.7 on April 30. It then picked up rapidly, peaking at 52.5 on May 3 before gradually dropping again and closing out the session at 50.6 on May 11.

About the Index

The HPS-CivicScience Economic Sentiment Index (“ESI”) is a “living” index that measures U.S. adults’ expectations for the economy going forward, as well as their feelings about current conditions for major purchases. The primary goal of the Index is to accurately measure movements in overall national economic sentiment and to provide a more sophisticated alternative to existing economic sentiment indices. Unlike other prominent indices that release consumer sentiment estimates infrequently, the HPS-CivicScience Index is updated in real time as responses are collected continuously every hour, every day. Large-scale cross-tabulation of survey responses and consumer attributes enable more granular analyses than are currently possible through prevailing measures. For a more detailed overview of the Index and the underlying methodology, please request a white paper.

About CivicScience

CivicScience, Inc. provides the leading intelligent polling and real-time consumer insights platform, the InsightStore™. Its proprietary platform powers the world’s opinions and quickly gets that data to the decision makers who care. Every day, CivicScience polls ask millions of people questions related to thousands of topics, while its powerful data science and big data technology analyzes current consumer opinions, discovers trends as they start, and accurately predicts future behaviors and market outcomes. CivicScience polls run on hundreds of premier websites, in addition to its own public polling site at CivicScience’s InsightStore™ is used by leading enterprises in marketing research, advertising, media, financial services, and political polling. For more information, visit CivicScience by clicking here and follow them on Twitter – @CivicScience.


Insights: A Conversation with Mike Hayes on “Never Enough”

Over the past two years, a lot of wonderful guests have come on the HPS Insights podcast, but it is safe to say few have the military, government, and business experience of Mike Hayes. The former Commander of SEAL Team TWO stopped by the virtual HPS Insights studio to discuss his new book, “Never Enough: A Navy SEAL Commander on Living a Life of Excellence, Agility, and Meaning.” 

In the book, and throughout the conversation, Mike shared the lessons learned through his experience as a U.S. Navy SEAL, including his time leading a two thousand–person Special Operations Task Force in Southeastern Afghanistan. He talked through how he has applied those lessons to his time working in the Bush and Obama White Houses and in the private sector at Bridgewater Associates, Cognizant Technology, and now as the Chief Digital Transformation Officer at VMWare. 

Many of the lessons Mike shares with readers are familiar to those practiced at HPS, including:

– Pushing yourself outside your comfort zone to increase your knowledge and abilities

– Prioritizing agility in the roles each of us plays on the team, knowing when to lead and when to follow

– Learning how to think, not what to think

In response to questions about his advice to get comfortable with being uncomfortable, Mike shared, “Leaning into the hard things is where the growth comes from. In the SEALs, we certainly move to the problem. It’s what I’ve also seen done sometimes really well in Washington, and sometimes less than well. Failure is only failure if you fail and don’t learn.”

Mike wrote this book not only to share these lessons but to raise awareness and funding for The 1162 Foundation—named after the date President Kennedy commissioned the SEALs—which supports families in the special operations community who have lost loved ones. 

To learn more about Mike’s experiences and the advice he offers readers, listen to the full episode and subscribe to HPS Insights on your favorite podcast service. 


Confidence In The Job Market Swells To A Record-High Level

Economic sentiment ended its month-long slump, rising 1.3 points to 50.6 over the past two weeks, according to the HPS-CivicScience Economic Sentiment Index (ESI). Confidence in the job market boosted overall confidence as it continued its meteoric rise, increasing 4.2 points to 54.9—the highest level in the ESI’s history.

With over half of the U.S. population having received at least one vaccine shot, jobless claims reaching a pandemic low of only 547,000 last Thursday, and COVID-19 infection rates holding steady, consumers displayed a rising level of confidence over the past two weeks. In addition to record-setting job confidence, faith in the overall economy rose 2.2 points to 53.3. The other indicators were more mixed:

 – Confidence in personal finances rose 3.6 points to 58.8, its second highest reading during the pandemic.

– Confidence in the tight housing market continued to drop, falling 2.4 points to 41.5, its lowest level in over a year.

– Consumers’ confidence in making a major purchase fell slightly from its previous six-month high, declining one point to 44.5.

The moving average began on April 14 at 49.5 and dropped to its low on April 21 at 48.0. It then shot upwards, peaking on April 24 at 53.0 before declining slightly and closing the reading on April 27 at 51.9.

About the Index

The HPS-CivicScience Economic Sentiment Index (“ESI”) is a “living” index that measures U.S. adults’ expectations for the economy going forward, as well as their feelings about current conditions for major purchases. The primary goal of the Index is to accurately measure movements in overall national economic sentiment and to provide a more sophisticated alternative to existing economic sentiment indices. Unlike other prominent indices that release consumer sentiment estimates infrequently, the HPS-CivicScience Index is updated in real time as responses are collected continuously every hour, every day. Large-scale cross-tabulation of survey responses and consumer attributes enable more granular analyses than are currently possible through prevailing measures. For a more detailed overview of the Index and the underlying methodology, please request a white paper.

About CivicScience

CivicScience, Inc. provides the leading intelligent polling and real-time consumer insights platform, the InsightStore™. Its proprietary platform powers the world’s opinions and quickly gets that data to the decision makers who care. Every day, CivicScience polls ask millions of people questions related to thousands of topics, while its powerful data science and big data technology analyzes current consumer opinions, discovers trends as they start, and accurately predicts future behaviors and market outcomes. CivicScience polls run on hundreds of premier websites, in addition to its own public polling site at CivicScience’s InsightStore™ is used by leading enterprises in marketing research, advertising, media, financial services, and political polling. For more information, visit CivicScience by clicking here and follow them on Twitter – @CivicScience.


State Of The Union Preview: An Analysis Of State Of The State Addresses

The past year made clear that America’s 50 states have different priorities — both from each other and from the federal government. From travel restrictions to return-to-office guidelines, the pandemic and the ensuing road to recovery have elevated the necessity for businesses and lawmakers to navigate varying state and federal guidelines.

As of last night, governors of all 50 states, with the exception of Ohio governor Mike DeWine, have conveyed their budget and legislative priorities to their constituents and legislatures through state of the state or inaugural addresses. Ahead of President Biden’s first address to the joint session of Congress, we analyzed these speeches to understand conversations taking place outside of Washington — where themes converge, focuses diverge, and promises for recovery are made.

Hot issues at the national level such as immigration and tech competition received little attention in state of the state addresses. Instead, governors focused more on education and budgets, topics of more local concern. The pandemic remains top of mind, as governors try to cast an optimistic outlook of economic reopening and recovery: collectively, governors mentioned vaccines 20 times more than quarantine.

While partisan and regional differences are expected, to paint states as simply divided by red and blue or north and south would be an oversimplification. Oftentimes, priorities discussed in governors’ state of the state addresses are consistent across states and years. Both in 2020 and 2021, all governors mentioned the economy and education, while the vast majority of speeches included mentions of healthcare and state budgets. Governors representing both parties also responded to social movements for racial justice: four more Democratic governors and five more Republican governors discussed race in 2021 than was the case in 2020.

That said, differences persist. Democratic and Republican governors have different emphases. For example, while education issues like schools are mentioned at the same frequency by governors from both parties, Democratic governors spent more time talking about the climate and vaccines, while Republican governors placed more emphasis on reopening the economy and criminal justice. Meanwhile, governors of the Northeast are considerably more focused on the environment than those from the South, who mentioned criminal justice at a higher rate than their Northeast counterparts.

For more on how states balanced the economic and human toll of the pandemic, read HPS’ analysis on state pandemic responses.


50 States, 50 Pandemic Responses: An Analysis Of Jobs Lost And Lives Lost

The pandemic is not over, but it now feels like the outcome is written. We know a lot more now than we did a year ago—not only about the virus but also how to respond to it. The policies and choices, successes and failures are now surfacing and strewn about like the debris after a storm.      

One of the most interesting aspects of the pandemic aftermath is the 50 different ways our federal system approached the crisis. States had, and have, different policies and approaches to virus mitigation, and the outcomes of that inadvertent policy experiment are now becoming apparent.

Florida and New York seem to have staked an early claim as the states the political class wants to fight over, but it is worth starting with the data before we force the evidence through the red and blue filters.

To evaluate individual state responses to the pandemic, we took a look at two of the major considerations in balancing the response: jobs and deaths. Ultimately, policymakers wanted to keep as many people from dying and as many people from losing their jobs as possible. Unfortunately, these goals were sometimes naturally at odds throughout this pandemic.  Jobs that require close proximity to others (for either employees or customers) resulted in greater COVID-19 spread, and thus more deaths.

To explore the trade-offs that were made, we plotted states by their per capita excess deaths using CDC data against the BLS data on their per capita job losses over the past year. Excess deaths as a measure should generally control for age and demographic differences between states and capture other dimensions of the pandemic like deaths of despair or undiagnosed COVID deaths (of note, North Carolina’s death reporting has a significant lag and so we used reported COVID deaths for that state data; there is a lag in death data generally that complicates analysis).

At a high level, it appears that the US lost 13 jobs for every person who died from COVID-19 in the year following the start of the pandemic, but this is not shared evenly across states. States with major hospitality and tourism sectors were hit hard in terms of job loss, with the impact falling unevenly across sectors. And states that were in the first wave of infections—when the healthcare system was still learning how to treat COVID-19—fared comparatively worse on their death tolls.

New York, which falls into both categories, had the worst overall outcome, with both high excess deaths and high job losses. The states that emerged in the best position were Idaho, Utah, and West Virginia, all with some combination of low loss of life and low loss of employment.  And Florida?  In the middle on both dimensions, which should give everyone something to fight over.