Trump is planning to scrap Dodd-Frank
Listen to this articleIs Another 2008 Financial Crisis in our Future?
On Tuesday, April 11, 2017, President Donald Trump met at the White House with top CEOs from some of America’s leading corporations. He boasted: “We are doing a major elimination of the ‘horrendous’ Dodd-Frank regulations. Keep some obviously, but getting rid of many.”
The cozy CEO clique of twenty honchos belong to something called “The Strategy and Policy Forum.” Tax reform was also on their agenda. You better believe that any so-called “tax reform” will benefit the 1% Gang more than any member of loser Hillary Clinton’s long forgotten and unfairly-maligned “deplorables.”
What is Dodd-Frank? It has been described as the most “extensive financial regulatory policy since the ‘Great Depression.’ It created a host of new protections, rules and oversight authorities.” Its laudatory goal was to ‘prevent another 2008-style financial crisis,” wrote Samuel Taube, in Investment U, on Jan. 24, 2017.
Ex-Sen. Chris Dodd (D-CT) and ex-Rep Barney Frank (D-MA) were co-authors of the 2010 law that became known as “Dodd-Frank.” The measure a few insisted didn’t go far enough; others, Wall Street friendly types for sure, whined that it was too top heavy with regulations.
The use of the phrase “financial crisis,” is, of course, a gross understatement. The national economy did a “meltdown” of historic proportions in 2008, because of the wrongdoings, and excesses of some of the Wall Street Bankers, hedge fund managers, and other grasping financial insiders; coupled with the disastrous repeal of the Glass-Steagall Act in 1999. Glass-Steagall had separated “commercial and investment banking for seven decades.”
The financial crisis of 2008 cost the U.S. economy a staggering $22 trillion. Check out the grim details here. The severe collapse set off a yearlong “banking panic and deep recession.”
(Meanwhile, the Iraq and Afghanistan Wars have cost the beleaguered taxpayers $5 trillion and rising to date.)
You can blame then-Democratic President “Bubba Bill” Clinton and then-Sen. Phil Gramm (R-Texas), an arch-conservative, for joining political forces to repeal Glass-Steagall. Why did they choose to do that? Because, they were acting at the “request of the big banks,” according to James Rickards in US News & World Report (August 27, 2012). The writer also warned that without something like Glass-Steagall on the federal statute books, “another greater catastrophe is just a matter of time.”
Who is listening to Rickards’ dire warning in the Trump-Pence Gang? Nobody, it looks like. Another financial expert, Bart Chilton, on CNBC, (Feb.07, 2017), predicted that it would be “a monumental mistake” for a repeal of Dodd-Frank to be enacted.
Trump’s choice for the key post of Treasury Secretary in his administration was Steven Mnuchin. Was that a good idea? I thought Trump was going to “drain the swamp!” Mnuchin has vowed to “strip back Dodd-Frank.” He was, for seventeen years, a hedge-fund manager for Goldman Sachs and a partner in the power-packed firm. It is fair to call Mnuchin a “Wall Street insider.”
On the Congressional front, the Chair of the House Financial Services Committee, Rep. Jeb Hensarling (R-TX), has been working on proposed legislation to “eliminate Dodd-Frank” and replace it with his brainchild, something labeled, the “Financial Choice Act.” He plans to introduce his updated legislation, which covers a wide array of topics, before the end of April, according to Rachel Witkowski, writing in the Wall Street Journal, on April 11, 2017.
One of Hensarling’s proposals would put an end to shareholders’ resolutions as we now know it. Advocacy groups, in the realm of social and environmental activities, are upset about the suggested changes. They say it would eliminate shareholders’ advocacy for worthy causes.
Under current law, advocacy is opened to anyone who owns $2,000 worth of shares for one year. If Hensarling’s proposed changes are passed, one would have to own “at least one percent of the company” for one year! It’s obvious then that the ordinary citizen, investor and consumer will be left out of this bargaining process
Finally, how can Trump, in good faith, talk about putting “America First” and still go along with trashing Dodd-Frank and the rights of Mr. and Mrs. Consumer?
Top photo of the U.S. Capitol by Bill Hughes
Bill Hughes is a native of Baltimore. He’s an attorney, author, professional actor and hobbyist photographer. In his salad days, he worked on the docks as a longshoreman. Bill also played on three championship soccer teams: sandlot with Jules Morstein; high school at Calvert Hall; and college at the University of Baltimore.