The return of an unfettered Wall Street
Donald Trump says we need deregulation to help his friends get loans.
Updated by Matthew Yglesias@mattyglesiasmatt@vox.com Feb 8, 2017, 8:00am EST
Donald Trump campaigned as a champion of the “forgotten man,” promising to make America great again with a focus on lunch-pail populism and steel mills. He accused both Ted Cruz and Hillary Clinton of being “totally controlled” by Wall Street. And he cleverly leveraged Bernie Sanders’s primary campaign accusations that Clinton was too close to banks into weapons he himself could wield.
On the campaign trail, Trump alleged that “Hillary Clinton meets in secret with international banks to plot the destruction of US sovereignty,” and that the United States has merely “an illusion of democracy” but is “in fact controlled by a small handful of special global interests rigging the system.” In his campaign’s closing ad on the subject, Trump drove the point home by juxtaposing Clinton with pictures of various prominent Jewish financiers.
Then, having won the election, he set about installing an incredible array of financial industry insiders at high levels of policymaking. They’re setting a policy trajectory that’s a stunning reversal of both Trump’s campaign rhetoric and the broad track of American policymaking over the years.
After the crash of 2008, there was broad consensus that something had to be changed. The Obama administration, joined by a handful of Republicans, put together the Dodd-Frank act to overhaul financial regulation in the United States. Many critics on the left (and a few on the right) argued that the law didn’t go far enough and should have implemented hard caps on the size of financial institutions. Most Republicans rejected the law but embraced alternative theories of how regulation ought to be changed — in terms of stricter limits on bank borrowing, an end of government involvement in mortgage securitization, or some kind of effort to guarantee that there would be no government bailouts in the future.
They are all different theories aimed at a similar goal — to restrain banks from engaging in excessive risk-taking that endangered the economy.
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http://www.vox.com/policy-and-politics/2017/2/8/14521806/trump-dodd-frank-rollback
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