Donald Trump’s chief economic adviser and Director of the National Economic Council is Gary Cohn. Trump’s Secretary of the Treasury is Steven Mnuchin. Dina Powell is his Deputy National Security Adviser, and Steve Bannon is the president’s chief strategist. What do all of these people have in common, aside from terrible taste in employers?
They all came from Goldman Sachs, the Wall Street powerhouse that made billions of dollars during the subprime mortgage crisis that tanked the American economy beginning in 2007.
Much has been made of the hypocrisy of Donald Trump’s claims of “draining the swamp.” He simultaneously hired and promoted many of the same (and some even worse) swamp-dwellers that made Washington, D.C. into the quagmire of grift, corruption, and greed that constituted the bog that needed its plug pulled. But all we knew until now was that those assholes were still in positions of authority. We had no idea what kind of impact they were having on Trump’s presidency, outside of tax proposals that screw ordinary Americans and drastically reduce rates for people like themselves.
But now an analysis from the Wall Street Journal is shedding some light on a more nefarious aspect of their influence on Trump policy:
Wall Street regulators have imposed far lower penalties in the first six months of Donald Trump’s presidency than they did during the first six months of 2016, a comparable period in the Obama administration.
If you’re like me, you know that Wall Street isn’t suddenly behaving itself — so why the change?
It comes from another of Trump’s campaign promises: To destroy Dodd-Frank, the now 7 year-old bill signed by Barack Obama that aimed to “reform” Wall Street after the fallout from the massive recession they were essentially solely responsible for. Life savings were lost, the housing market was upended, and ultimately the US economy tanked, resulting in bailouts for the big banks that both parties hated. Back on April 11, Trump met with a bunch of CEOs and told them they didn’t have to worry much longer:
For the bankers in the room, they’ll be very happy because we’re really doing a major streamlining and, perhaps, elimination, and replacing it with something else.
But Trump’s drive to dismantle the landmark legislation still hasn’t taken effect, so in the meantime, what his administration can do to make life easier for Wall Street — literally the only people who will benefit from the destruction of Dodd-Frank — is to back off the penalty part of the “horrendous” regulations Dodd-Frank imposed. And boy, have they. From the WSJ:
Penalties levied against firms and individuals by the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Financial Industry Regulatory Authority in the first half of 2017 were down nearly two-thirds compared with the first half of 2016. [This] put regulators on track for the lowest annual level of fines since at least 2010.
2010. Back when Dodd-Frank was signed.
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