There was never any reason to think that Donald Trump‘s stump-speech assaults on Wall Street banks and hedge funds were even momentarily sincere – but millions of working- and middle-class voters loved his populist rhetoric.
Emerging from his gold-plated jet, Trump would roar about cracking down on the financial vultures who had fattened while everyone else suffered, as his fans cheered.
He wouldn’t let those crooks escape paying their shares of taxes any more. He was paying for the campaign from his own massive fortune, so he would owe allegiance to nobody but the American people. He excoriated Hillary Clinton, who had accepted tens of thousands of dollars in speaking fees from Goldman Sachs, warning that the Democrat would dance to Wall Street’s tune. He even aired a television commercial, late in the campaign, that vowed to free the country from the “globalist” designs of Goldman chair Lloyd Blankfein and investor George Soros.
Voters enchanted by Trump’s promises may not have known that he owed his wealth and the continued existence of his business – despite multiple bankruptcies – to bankers at places like Goldman Sachs, UBS and Deutsche Bank (and still owed them hundreds of millions of dollars). They probably didn’t know how quickly he abandoned his bogus promise to fund his own campaign, turning to Steven Mnuchin, a Goldman Sachs veteran and predatory mortgage lender, to raise millions.
And they surely didn’t know that Mnuchin openly boasted that he would become treasury secretary, the very reward that Trump awarded him – or that various other Wall Street figures, from Commerce nominee Wilbur Ross to National Economic Council chief Gary Cohn, would dominate Trump’s appointments.
Now they do know – or they should, if they’ve been paying attention. But do they realize yet how badly Trump punked them?
On Friday, he delivered a multibillion dollar gift to Wall Street by eviscerating the Dodd-Frank financial regulations passed in the wake of the 2008 crash. His executive order instructed the Department of Labor to delay and ultimately destroy the fiduciary rule that required financial firms to offer advice only in their clients’ best interest – rather than self-serving schemes for self-enrichment. With that single stroke, he encouraged the banks to fleece working Americans of their retirement savings, with an implicit promise that the government will do nothing to stop or punish them.
According to a report released last year by the Obama administration, the fiduciary rule would save Americans from $18 billion in financial cheating annually. Goldman Sachs estimated that the rule would cost financial firms as much as $25 billion per year. Either way, undoing the rule is an enormous favor to Wall Street – and a gigantic gouge of consumers.
At the same time, Trump directed his appointees to undo the regulations that protect Americans from another Wall Street meltdown – which could again cost millions of Americans their jobs, homes, and health care. Campaign promises to revive the Glass-Steagall Act, a Depression-era law that separated banking from investing, have been forgotten, along with that pledge to require that bankers pay income taxes like everyone else.
Indeed, the effective control of Trump’s agenda by banking interests became obvious even before he signed the orders to tear down Dodd-Frank. Within days after taking office, he signed an order that undid a planned decrease in federal mortgage insurance fees, forcing higher costs on hundreds of thousands of American families – -but enriching the private mortgage industry and investors in mortgage securities. Which is another way of saying that he did another favor for the big banks.
As president, Trump has also effectively abandoned his populist attitudes toward the national debt and the federal budget. During the campaign, he advanced the radical idea that debt didn’t matter because the government “can print money,” and hinted that he was prepared to spend billions of dollars on infrastructure investments that would employ millions of workers. But in office, his appointees turn out to be old-fashioned Wall Street deficit hawks who want to slash discretionary spending, which will be ruinous to the economy. And his infrastructure “plan” so far appears to be nothing more than another set of tax breaks for the wealthy. That scheme would mean billions in bond underwriting profits for Wall Street.
In Trump’s economy, there will be winners and – as he would say – losers. The winners are the fat and happy bankers he once pretended to attack. The losers are the poor suckers who believed him.
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