by John Rubino, Dollar Collapse:
During his run for the presidency, Donald Trump took the occasional break from insulting women and minorities to toss off some decent – even exciting – policy ideas. Term limits for congressmen and a ban on politicians becoming lobbyists, for instance, were straight from the Libertarian good-government Christmas list.
But best of all was the effective break-up of the big banks through the re-imposition of Glass-Steagall, a law passed during the Great Depression to separate taxpayer-protected commercial banks from free-to-fail investment banks.
Here’s an article published during the campaign noting Wall Street’s angst at the prospect:
Glass-Steagall: Wall Street is not happy with Donald Trump
(CNBC) – The GOP candidate’s pledge to bring back Glass-Steagall is an unwelcome surprise for the financial services industry.
A top advisor to presumptive GOP presidential nominee Donald Trump said on Monday that the party wants to reimplement Glass-Steagall, Depression-era legislation that was designed to prevent big bank “supermarkets,” but which was repealed in 1999.
After the surprise announcement, which came on the first day of the Republican National Convention, Wall Street sources sounded off on the idea that a Republican would reverse course on policies nearly 20 years old and now taken for granted by big banks.
One lawyer, who works with financial institutions on behalf of a white-shoe firm in New York, called the idea “scary.” Even Wilbur Ross, one of the Trump campaign’s biggest supporters from the finance industry, called it “surprising.” Others on Wall Street who spoke to CNBC used stronger language that can’t be printed.
Glass-Steagall is legislation the U.S. imposed in the wake of the 1929 market crash aimed at limiting the relationships between securities firms and commercial banks, and by extension of that, systemic risk to U.S. markets and the economy. In 1999, legislation was passed that did away with Glass-Steagall, but now, the GOP is ready to bring it back and break up banks.
President Trump, however, seems to have quickly changed his mind:
The wolves of Wall Street: Trump’s Treasury contenders — what big teeth they have . . .
(Salon) – Judging by who Trump is considering for Treasury secretary, Wall Street banks could have unprecedented influence.
Donald Trump may have sounded like an economic populist to his voters during the presidential campaign, but his administration is shaping up to be the best thing to happen to Wall Street since the Roaring ’20s, that regulation-free era that preceded the Great Depression. And we know how well that worked out for the nation.
This might sound like hyperbole, but Politico yesterday quoted an historian to back it up:
“You would have to go back to the 1920s to see so much Wall Street influence coming to Washington,” said Charles Geisst, a Wall Street historian at Manhattan College. “It’s the most dramatic turnaround one could imagine. That’s the truly astonishing part.”
It’s a little scary when historians are saying that the major Wall Street banks had even less power in Washington during our recent period of deregulation, which spanned the presidencies of Bill Clinton and George W. Bush, than they probably will have over the upcoming four to eight years of the Orange Reign.
And it is also a remarkable turnaround since Trump spent so much of his general election campaign bashing Hillary Clinton for her ties to Wall Street. This came after a bruising Democratic primary in which Bernie Sanders bashed her for the same reason. Sanders’s popularity and Trump’s win, the pundits said, indicated an ascendant populist mood in the country. The fact that, in Trump’s case at least, said populism was a distraction meant to keep his fans from noticing that he would be restoring all the old Wall Street thieves and lackwits to prominent positions in Washington was duly noted by liberals but did not break through to enough voters. Or if it did, they did not care.
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