by Dave Kranzler, Investment Research Dynamics:
About 30 days into Obama’s first term I predicted that, “Obama will eventually go down as a worse President than W, which is hard to do because W might be one of the worst Presidents in U.S. history.” I am making the same prediction of Trump: he’ll go down as a worse President than Obama.
I would surmise that a majority of Trump’s voters voted for Trump as a vote against Hillary. Many of them have expressed relief that “Trump is not as bad a Hillary.” But, au contraire. The decision faced by voters was no different than choosing between liver cancer and pancreas cancer.
Trump promised to “drain the swamp.” That was nothing more than a clever marketing slogan adopted by Trump’s team to galvanize the majority of Americans who felt betrayed by the Democrats, led by Obama, who beginning on day one back-pedaled and repudiated the policy platform on which he campaigned (anyone besides me recall these promises: “I’ll close Guantanomo in the first 90 days” and “I’ll eliminate the use of Executive Orders” and “I’ll repeal all of Bush’s surveillance Executive Orders”).
The Democrats I know have the memory of fruit fly because every one of them seems to have a case of selective memory. Perhaps Obama’s most memorable promise, aside from universal healthcare (Obama’s version of which is collapsing before he leaves office), was his vow to clean up the corruption on Wall Street. Of course, his Attorney General appointment for most of his Presidency was Eric Holder, a career Democratic operative who worked at the Covington Burling law firm. Covington Burling is Wall Street’s “body guard” in Washington, DC. Most people have never heard of Covington Burling, which is how it is intended to be. CB is the real life version of Bendini, Lambert and Locke, the infamous mob law firm in John Grisham’s, “The Firm.”
A little trivia: Holder, as AG for the District of Columbia in the late 1990’s, drafted the pardon letter for Marc Rich, the infamous tax-evader who fled to Switzerland, signed by Bill Clinton as he walked out of the Oval Office for the last time (Clinton’s reward was carnal knowledge of Rich’s wife, Denise).
While the politicians promised that Dodd Frank and the Consumer Financial Protection Bureau and other legislative reforms had made America safe from Wall Street, in fact the opposite is true. The subprime mortgage bubble has been replaced by a nearly equally as large, if not more insidious, subprime auto debt bubble. With the help of Obama’s Government-backed mortgage “reforms,” Wall Street banks have spawned another subprime mortgage and housing bubble. Derivatives “reforms” did nothing other than enable banks to hide their criminal use of these highly profitable weapons of mass financial destruction.
In other words, the only “cleaning” up that was accomplished over the last eight years by Obama was removing the last remnants of transparency from Wall Street’s operations, as all of these so-called “reforms” have enabled the Too Big To Fail Banks to conduct their fraudulent activities further “off balance sheet.”
So Obama has left his successor with 100% more Government debt, a collapsing healthcare system that is unaffordable for most other than corporate fat-cats and the recipients of free medicaid (and of course for the Congressmen who are exempt from Obamacare and have their healthcare paid for by the public anyway) and a financial bubble that dwarfs the bubble that was popping when Obama took office.
The Wall Street problem for this country is going to get worse under Trump. In some ways it makes sense. Trump’s casino business was a product of Drexel Burnham Lambert’s junk bond juggernaut. I know this because I traded all of the old Trump junk bonds which, by the early 1990’s, were trading at distressed levels. Trump is a real estate guy and real estate guys love debt more than they love their mothers. And Wall Street loves nothing more than to underwrite that debt loved by guys like Trump. In other words, in some ways Trump is a slave to Wall Street as much as, if not more than, his predecessor. Note that among the first words out of Trumps mouth when he claimed victory was a promise to take deficit spending to new levels in order to build out the infrastructure. There’s only way to finance deficit spending…
Circling back to Trump’s promise to “drain the swamp,” I think most of us assumed it not only meant getting rid of the career politicians like Hillary Clinton who had become completely controlled by corporate/Wall Street interests but also getting rid of the elements that controlled them. Most notably the Wall Street bankers ensconced throughout all levels of the Obama Government.
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