Thursday, December 1, 2016

Trump turns to Wall Street to steer the national economy

Posted By on Thu, Dec 1, 2016 at 9:17 AM

click to enlarge FOR THE PEOPLE: The Goldman Sachs Tower in Jersey City, NJ. - WIKI COMMONS
  • WIKI COMMONS
  • FOR THE PEOPLE: The Goldman Sachs Tower in Jersey City, NJ.

In examining President-elect Donald Trump's picks for his cabinet's top two economic posts
, the New York Times this morning highlights the obvious: Both personify the Wall Street elite that Trump told working-class voters he'd fight if elected president.

Steven Mnuchin, Trump's nominee for treasury secretary, is a former executive at Goldman Sachs who has more recently managed private equity and hedge funds and bankrolled the film industry. For secretary of commerce, he's tapped Wilbur Ross, a billionaire investor who's made his career flipping distressed businesses.

Among other things, this spells trouble for Dodd-Frank, the Times reports:
[Mnuchin's] experience as a principal investor who made large sums of money through high-risk, high-return wagers suggests that he will look critically at the thicket of regulations that now constrain the risk-taking activities of investment banks.

That could mean a reassessment of what has come to be known as the Volcker Rule, part of the Dodd-Frank financial overhaul that followed the 2008 financial crisis. The rule forbids banks to make certain speculative investments with their own capital.

“I would say the No. 1 problem with the Volcker Rule is it’s too complicated and people don’t know how to interpret it,” Mr. Mnuchin said in an interview with CNBC on Wednesday. “So we’re going to look at what to do with it as we are with all of Dodd-Frank. The No. 1 priority is going to be to make sure that banks lend.”
As Democratic Ohio Sen. Sherrod Brown put it in a statement yesterday: "This isn't draining the swamp. It's stocking it with alligators."

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