Agencies. Brett Kavanaugh is all about the agencies and the need to keep them -- and pretty much everyone else in government for that matter -- from being too powerful.
I know there will be a lot made today of his views of social issues. I respect that commentary and the right for people to bat it around and be angry about it, or just generally be thrilled that some key views of the Court may be overturned.
To me, though, when I read his decisions that can impact business - his decisions, say, on net neutrality or the Consumer Financial Protection Bureau or the Affordable Care Act -- what I see is a jurist who is deeply suspicious of regulators, particularly non-elected regulators, who are making sweeping actions that he thinks are well beyond their jurisdiction.
I cannot stress how important this kind of thinking is for business people. Hate or like regulations, you think they are necessary or you don't, what matters if you are in business is 1. Predictability and 2. The ability to run your company without interference from some regulators who you think have no understanding about how business works.
If you feel that way, Judge Brett Kavanaugh is the right choice for you.
When I deal with business people, with CEOs, they rarely say much about the day-to-day actions of the president. But they have said a lot about the day-to-day actions of agencies and their power.
Most business people I speak to thought that President Obama created an environment where rules were constantly being promulgated and then being enforced by heavy-handed regulators who were anti-business.
Kavanaugh is a natural reaction to that worldview. He will be viewed as someone who gives the regulators little room to take action. His decisions create a laissez faire penumbra that will be viewed as incredibly positive for any business person who is concerned that the government is too powerful.
What does this pick mean for the market?
I know that it's hard to relate the Supreme Court to stocks, but I would say this choice is a P/E-multiple-expanding moment, given that there are now five members of the court who are relatively like-minded about the role of government in business. That gives executives that predictability that they crave.
When you look back at the rule-making policies of agencies under Obama, you saw the vast power of the federal government to make it so that business interests were kept in check. Kavanaugh's decisions would both limit that power and would tip the balance toward business interests and against regulators who thought nothing of interfering with business.
No, it's not a reason to buy stocks. But it does remove a level of judicial uncertainty that I find makes your job easier as a stock picker, particularly when it comes to largely domestic companies.
I don't think Kavanaugh comes at the law with the interests of business in mind. He comes at it from the idea that government, at all levels, should be less powerful. In that vacuum, business, whether rapacious or benign, wins.
Therefore, in my own narrow way, I find this a subtle win for the stock market even as, once again, you may love him or hate him for the more polarizing social issues that are at stake.