O'BRIEN: Wall Street takes over Trump administration
Opinions Column: Policy Over Politics
Picture this — the president of the United States walks into the Oval Office, to sign two executive orders. He sits at his desk, a staffer to his right and a former president of Goldman Sachs to his left glancing over his shoulder. The president signs an executive order to roll back protections against excessive risk-taking on Wall Street, less than a decade removed from a major financial crisis. He then signs another order canceling a requirement that financial advisors put their clients’ interests over their own. He turns to reporters and says of previous reforms “I have so many people, friends of mine that had nice businesses, they can’t borrow money.”
There’s a twist to this story: This president is a self-proclaimed populist — his name is President Donald J. Trump.
While the world has fixed its attention on Trump’s travel ban and ethics questions, he has initiated an assault on the middle class and begun handing control of the American economy and government back to massive financial institutions, starting with the very scene described above.
Trump promised to roll back most of the Dodd–Frank Wall Street Reform and Consumer Protection Act, a set of financial reforms passed in the wake of the Great Recession. The bill has its flaws, but it aims to curtail the recklessness that caused this crisis. It created the Consumer Financial Protection Bureau, which shields the poorest Americans from predatory loans and credit scams. It required the largest banks to enact a plan in case of bankruptcy so regulators can unwind a major firm without taking down the rest of the financial system. It also brought derivatives — the instrument that while important to our economy, played a pivotal role in the 2008 crisis — in more transparent exchanges.
The financial crisis hurt average Americans the most. It wiped out retirement and college savings, ripped people from their homes and caused millions to lose their jobs. Twenty million people went on food stamps. The problem of long-term unemployment, which still plagues us today, was triggered by this crisis. Meanwhile, the very people who caused all this carnage are doing better than ever.
This is emblematic of the president’s broader economic agenda, which favors massive corporations and the richest Americans over regular people. Is this any surprise, given his advising team of ex-Goldman Sachs executives, Wall Street lawyers, union-busting businessmen and billionaire donors?
As the saying goes,"personnel is policy," and if there’s any message sent by Trump’s appointments, its promise to “drain the swamp” was a complete farce. His Chief Economic Advisor is Gary Cohn, the previously mentioned president of Goldman Sachs. Chief Strategist Steve Bannon, Treasury Secretary Steve Mnuchin, and senior advisors Anthony Scaramucci and Dina Habib Powell are all former Goldman Sachs executives. Trump’s pick to head the Securities and Exchange Commission is Jay Clayton, who has spent decades representing Wall Street banks. Yes, he hired Wall Street to regulate itself.
On almost every issue, Trump’s proposals would disproportionately benefit the fortunate. He structured his child care plan, for example, as a tax deduction, rather than a tax credit, meaning the Americans who need help the most will not get it. His tax plan gives trillions in breaks to the richest Americans — those least likely to spend it in a meaningful way — while doing next to nothing for middle-class and poor Americans. Even his floated proposal to get Mexico to pay for a border wall — a 20 percent tax on imported goods — is a regressive tax that places the overwhelming burden of the cost on middle-class and poor Americans.
Trump ran a campaign against “the establishment.” He slammed Sen. Ted Cruz (R-Texas) during the primaries for his wife’s employment at Goldman. Last fall, he went hard after former Secretary of State Hillary Clinton for making paid speeches to big banks. But now that he’s in charge, Trump is not only putting Wall Street executives in charge of the federal government but is also pushing policies that benefit them at the expense of average Americans.
Trump may have used different rhetoric than past Republican presidential nominees, but he is a continuation of the party’s anti-worker, anti-middle class agenda. His appointments support massive deregulation of the same industry whose greed and recklessness just caused a worldwide recession. Together they support gutting labor unions, the only institution left that empowers working people. They support giving massive tax cuts to the wealthiest Americans while leaving the rest of us out to dry.
Other day-to-day questions of truth and ethics all deserve our attention. But this Wall Street takeover of the American economy and its government is not getting nearly enough. Democrats need to turn their attention to this issue and expose the president for the fraud that he is before it’s too late.
Connor O'Brien is a School of Arts and Sciences sophomore majoring in economics with a minor in history. His column, "Policy Over Politics," runs on alternate Thursdays.
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