Feb 3, 2017 (WASHINGTON) One of the core principles of the Donald Trump campaign is that he was running against Wall Street. He was going to protect the little person from the rapacious banks. His executive order does little to protect the little investor but sets the ground for a major financial crisis. The Executive Order emphasizes competitiveness, and also the ability for individuals to make their own decisions. It sounds good, but it is not.
According to the CNN Money story earlier in the week:
Lisa Donner, executive director of a nonprofit coalition pushing for Wall Street accountability called Americans for Financial Reform, said in a statement that it would be “wrongheaded and a betrayal of Trump’s campaign promises to reign in Wall Street abuses.”
After Trump’s victory, Federal Reserve chief Janet Yellen credited financial regulation with making the system “safer and sounder” and said she “wouldn’t want to see the clock turned back” on Dodd-Frank.
This executive order is also expected to get rid of the Volker Rule which prevents banks from gambling with your money in shaky investments. This was one of the reasons for the 2008 crisis.
In the text, it also prevents the bailout of the too big to fail problem. Suffice it to say, the Toxic Relief Assets Program (TARP) was put in place in the waning days of the George W Bush administration.
Dodd-Frank has also created higher reserves for banks to be able to face a crisis. This is according to testimony from Janet Yellen to Congress. She is the chairwoman of the Federal Reserve.
Many bank executives want these regulations repealed, however. They prevent the accumulation of vast wealth, no matter what the long-term consequences. This EO is also expected to eliminate the Consumer Financial Protection Bureau that protects the small investor from Wall Street. So this can easily be seen as a betrayal from the Trump administration to the working class voters. At the very least it will seek to transfer funding from the Federal Reserve to the House, where it will be starved.