Trump supporters thought they were voting against Wall Street and lobbyist influence, but new reports are showing that the Republican’s transition team is filled with the kind of big money, corporate lobbyist interests he promised to defeat. Democratic Senator Elizabeth Warren released a letter calling out the President-elect for breaking his major campaign promise to stop the influence of special interests in Washington. Judging by the reaction of glee being reported from the halls of Goldman Sachs, in less than 10 days those shimmering campaign promises have already faded to black. POLITICO reports:
Christmas has arrived early for Wall Street in the early days of the Donald Trump era. A populist candidate who railed against shady financial interests on the campaign trail is now putting together an administration that looks like an investment banker’s dream.
Bank stocks have already begun soaring as a new era of Republican deregulation dawns, interest rates are rising rapidly, and last week the tough regulator President Obama named to head of the SEC, quit. The news that’s making bankers feel like they just won a bonus is who is rumored for high positions in the next Republican administration, mainly a cadre of Goldman Sachs insiders and billionaires:
Former Goldman Sachs banker Steven Mnuchin has been seen at Trump Tower amid rumors that he’s the leading candidate for Treasury secretary. Billionaire investor Wilbur Ross appears headed to the Commerce Department. Steve Bannon, another Goldman alum, will work steps from the Oval Office. JPMorgan Chase CEO Jamie Dimon remains a possibility as Treasury secretary and will serve as an outside adviser if he doesn’t get the job.
It’s a restoration of Wall Street power — and a potential flip in the way the industry is regulated — perhaps unparalleled in American history.
There was a glimmer of good news today, when central bank Chairwoman Janet Yellen confirmed that she will stay in her role as America’s top bank regulator at The Fed through January 2018. It means that banks will be able to revert to casino style gambling in little more than 14 months from today, when the President-elect would select its next Chairperson, although Yellen would remain on the Board guiding the bank until 2024.
After Chairwoman Yellen leaves, the door could open to a complete realignment of America’s financial regulations – as in, they will all be gone.
GOP congressmen are already taking aim at watering down or eliminating the Dodd-Frank Act and crippling the Consumer Financial Protection Bureau. It’s architect was Massachusetts Senator Elizabeth Warren, and along with the CFPB they recently busted Wells Fargo’s national account creation fraud scheme and held them accountable in public.
Warren, meanwhile, no longer has any real power beyond her ability to rhetorically rally the left and try to turn populists — who have no love for Wall Street — against the incoming president. And that’s exactly what she’s attempting to do.
“Based on public reports, your transition team and your potential cabinet include over twenty Wall Street elites, industry insiders, and lobbyists,” Warren wrote in a public letter to Trump on Tuesday, demanding that he drop lobbyists and Wall Street executives from his transition team and administration. “Should you refuse, I will oppose you, every step of the way, for the next four years. I will champion the millions of Americans you will fail to protect.”
“I do think that Republicans will pick at it piece by piece and by the time they are done it will be largely weakened,” said Ian Katz, director at Capital Alpha Partners. “It may take a while, you can’t just flip a switch and do all this stuff. But eventually they can do it.”
The looming combination of higher interest rates and weak or nonexistent bank regulation, along with massive tax cuts to the wealthy is precisely the same legislative agenda that the Bush Administration fed America’s economy during its second stint of one party rule in Washington.
The results were catastrophic, as we know all too well. We are only eight years removed today from the worst global financial crisis since America’s Great Depression-era, which incidentally began following the last time Republicans controlled both Houses of Congress and the White House.
The only thing standing between deregulation causing America’s economy to flame out like one of Donald Trump’s bankrupt casinos, is Senator Elizabeth Warren and her Democratic party supporters voices and their individual actions in the coming months.
But things are looking bleak.