One of Donald Trump’s top Wall Street backer-turned campaign advisers just compared President Obama’s rules requiring honest financial dealing to slavery, and promised that the Republican campaign would “repeal” the key initiative by the current Democratic administration intended to protect the life savings of America’s retirees from unsavory financial advisers. Shamefully, his position is mainstream GOP political thought, and even one of House Speaker Paul Ryan’s major initiatives to “fight poverty” (we just cannot make this stuff up) by letting fraudulent financial advisers continue to prey upon the innocent. InvestmentNews.com reports:
“We’re going to repeal it,” Anthony Scaramucci said on the sidelines of the Securities Enforcement Forum in Washington last week. “It could be the dumbest decision to come out of the U.S. government in the last 50 to 60 years.” In an aside, Mr. Scaramucci compared the DOL rule to an 1857 Supreme Court ruling which held that African Americans were not U.S. citizens. “It’s about like the Dred Scott decision,” Mr. Scaramucci said.
The new rules protect responsible Americans saving for retirement and elderly pensioners from being lied to by unscrupulous advisers, who bilk a staggering $17 billion dollars out of our retirees by steering them into high-fee, low-benefit “savings” plans.
After President Obama implemented the important new, federal regulation this year he imposed “fiduciary duty” on financial advisers, which means they must advance clients savings needs first and foremost, above their own personal financial gain. It seems like something so basic, so obvious that it should’ve been in place for years, but until the DOL implemented this rule, investment advisers had no fiduciary duty to clients, and these “advisers” ripped off millions of Americans annually.
Mr. Scaramucci wasn’t just kidding about his “slavery” argument, and decided that a level playing field for people who thought their financial advisers were actually helping them save is discriminatory, and said so in a follow-up email to InvestmentNews:
“The left-leaning Department of Labor has made a decision to discriminate against a class of people who they deem to be adding no value,” he wrote. “They are judging what should happen in a free market and attempting to put financial advisers out of work. When market forces cyclically adjust again, they will be having congressional hearings about how big the mistake was to do this.”
It’s important to note that the Republican Party agrees strongly with Saramucci’s policy, and would have repealed President Obama’s rules had he not smacked them down with the veto hammer. When Republicans tried to override the veto in Congress, that’s when Democrats held a now-famous sit-in, which disrupted the House of Representatives, after the GOP refused to even hold a vote on new gun control measures in the wake of the Pulse nightclub shooting.
Republican “leadership” has been nothing short of abysmal since the rise of Trump, but House Speaker Paul Ryan’s failure to lead stands out because of his reputation for making ‘big plans’ for America. Here’s Ryan’s big, completely damaging plan to fight elderly poverty:
Specifically, Ryan and the GOP would like to abolish the Department of Labor’s recently released “fiduciary rule,” which once it’s fully implemented in 2018 will simply require that investment professionals act in their clients’ best interests when offering advice on their retirement accounts. You may be shocked to discover that this is, in fact, a new thing. But traditionally, advisers have been permitted to consider their own bottom lines when deciding where to steer their clients’ money, so long as the investments are “suitable” to the customers’ needs. That’s left the door open for massive and costly conflicts of interest.
In the name of fighting poverty and encouraging upward mobility, Paul Ryan and the House GOP want to make it easier for financial advisers to screw over their clients.
There’s a direct and recent parallel in America’s financial history, upon which as an author, I can give expert commentary. I’m a licensed mortgage broker, and my profession had the same fiduciary responsibilities legislated after the 2008 financial crisis. I can confirm without a doubt: fiduciary duty in the professional finance fields is not slavery.
The reality is, that owing the fiduciary responsibility to my clients is a tremendous reassurance everyone working with me, who know I must do my best to benefit their needs over my own. It’s also been a boon to the professionalism level of the entire field of mortgage brokerage. In fact, as a mortgage broker we have a higher level of responsibility to our clients than the actual banks or lenders do themselves! But there’s a lot fewer mortgage brokers now that honest dealing is mandatory and a lot of financial advisers who broker retirement savings plans may have to exit the business as well.
Financial advisers who actually care about their clients, and stay in the business, will find that the same shift occurs in their industry, which most Americans probably thought was better regulated. As usual, until President Obama came along, there was a great injustice happening silently across the country, but with tremendous work and perseverance something was done to make our country a better place – and as sadly is usual, Republicans oppose it on the grounds of greed and lies.
Republicans should be ashamed of themselves across the board, for supporting a weak regulatory environment which impoverishes senior citizens just to protect a single, special interest group.
This is yet another prime example of Donald Trump’s failing presidential campaign combining the very worst Republican ideas, with the very worst ideas about race, religion and human decency.
Nobody should vote for any GOP politician, when their party’s top priority is screwing over working people trying to save their money, by helping bandits in white collars to screw over trusting victims.
Grant Stern is the Executive Editor of Occupy Democrats and published author. His new Meet the Candidates 2020 book series is distributed by Simon and Schuster. He's also mortgage broker, community activist and radio personality in Miami, Florida., as well as the producer of the Dworkin Report podcast. Grant is also an occasional contributor to Raw Story, Alternet, and the DC Report, and a senior advisor to the Democratic Coalition