So Much For Electing An Outsider

During his run for the presidency, Donald Trump took the occasional break from insulting women and minorities to toss off some decent – even exciting – policy ideas. Term limits for congressmen and a ban on politicians becoming lobbyists, for instance, were straight from the Libertarian good-government Christmas list.

But best of all was the effective break-up of the big banks through the re-imposition of Glass-Steagall, a law passed during the Great Depression to separate taxpayer-protected commercial banks from free-to-fail investment banks.

Here’s an article published during the campaign noting Wall Street’s angst at the prospect:

Glass-Steagall: Wall Street is not happy with Donald Trump

(CNBC) – The GOP candidate’s pledge to bring back Glass-Steagall is an unwelcome surprise for the financial services industry.
A top advisor to presumptive GOP presidential nominee Donald Trump said on Monday that the party wants to reimplement Glass-Steagall, Depression-era legislation that was designed to prevent big bank “supermarkets,” but which was repealed in 1999. 
After the surprise announcement, which came on the first day of the Republican National Convention, Wall Street sources sounded off on the idea that a Republican would reverse course on policies nearly 20 years old and now taken for granted by big Banks. 
One lawyer, who works with financial institutions on behalf of a white-shoe firm in New York, called the idea “scary.” Even Wilbur Ross, one of the Trump campaign’s biggest supporters from the finance industry, called it “surprising.” Others on Wall Street who spoke to CNBC used stronger language that can’t be printed. 
Glass-Steagall is legislation the U.S. imposed in the wake of the 1929 market crash aimed at limiting the relationships between securities firms and commercial banks, and by extension of that, systemic risk to U.S. markets and the economy. In 1999, legislation was passed that did away with Glass-Steagall, but now, the GOP is ready to bring it back and break up banks.
President Trump, however, seems to have quickly changed his mind:

The wolves of Wall Street: Trump’s Treasury contenders — what big teeth they have . . .

(Salon) – Judging by who Trump is considering for Treasury secretary, Wall Street banks could have unprecedented influence.
Donald Trump may have sounded like an economic populist to his voters during the presidential campaign, but his administration is shaping up to be the best thing to happen to Wall Street since the Roaring ’20s, that regulation-free era that preceded the Great Depression. And we know how well that worked out for the nation. 
This might sound like hyperbole, but Politico yesterday quoted an historian to back it up: 
“You would have to go back to the 1920s to see so much Wall Street influence coming to Washington,” said Charles Geisst, a Wall Street historian at Manhattan College. “It’s the most dramatic turnaround one could imagine. That’s the truly astonishing part.” 
It’s a little scary when historians are saying that the major Wall Street banks had even less power in Washington during our recent period of deregulation, which spanned the presidencies of Bill Clinton and George W. Bush, than they probably will have over the upcoming four to eight years of the Orange Reign. 
And it is also a remarkable turnaround since Trump spent so much of his general election campaign bashing Hillary Clinton for her ties to Wall Street. This came after a bruising Democratic primary in which Bernie Sanders bashed her for the same reason. Sanders’s popularity and Trump’s win, the pundits said, indicated an ascendant populist mood in the country. The fact that, in Trump’s case at least, said populism was a distraction meant to keep his fans from noticing that he would be restoring all the old Wall Street thieves and lackwits to prominent positions in Washington was duly noted by liberals but did not break through to enough voters. Or if it did, they did not care. 
Trump, of course, is spinning his economic plans as the responsible way to unleash the great power of the American economy. From his transition website:
Federal policy should focus on free enterprise, while protecting consumers by policing markets for force and fraud. Both Wall Street and Washington should be held accountable.
To hold Wall Street accountable, Trump has been looking to name a Treasury secretary who will do anything but. JPMorgan CEO Jamie Dimon has been in the running and according to CNBC he’s pitching hard for the gig — what wolf wouldn’t to get into the sheep pen? 
Right now, however, the top contender is said to be another wolf: Seth Mnuchin, a longtime Goldman Sachs executive and hedge fund manager. Mnuchin was recently the CEO of a regional bank, OneWest, which was previously known as IndyMac. The bank was one of the major players in the foreclosure crisis during the Great Recession and is accused of fraudulently foreclosing on thousands of homes, particularly those owned by seniors and low-income minorities who did not have the resources to pursue legal recourse. 
Mnuchin, by the way, is not a fan of the Dodd-Frank financial reform act signed by President Barack Obama, which was intended to rein in some of the banking practices by which Mnuchin made his fortune. Since one of Trump’s goals for the entire campaign has been the repeal of the Dodd-Frank act and because the deregulation-happy Republicans who control Congress share that goal, you can expect that legislation, signed in 2010 in response to the banking excesses that brought on the Great Recession, to disappear into the mists of history once Mnuchin is confirmed. 
Congressional Republicans are also likely going to use this new business-friendly atmosphere to destroy or at least hamstring the Consumer Financial Protection Bureau, the baby of Sen. Elizabeth Warren, who helped set it up in 2010 before her run for the Senate. Republicans have been gunning for the CFPB, which helps protect consumers from predatory businesses. According to The Huffington Post, the CFPB has found redress for 27 million consumers to the tune of nearly $12 billion in its short history. 
The GOP now plans to rein in the CFPB, possibly by naming recently retired Rep. Randy Neugebauer, R-Texas, to run it. Neugebauer, who like Hensarling has ties to the payday loan industry, has long opposed the CFPB. So putting him in charge of it is the proverbial case of the fox guarding the henhouse.
Clearly some back-channel discussions took place in which:

1) Trump made it clear to Wall Street that he was just kidding about Glass-Steagall and that once elected he’d take care of his banker friends, or…

2) Wall Street made it clear to Trump that the rewards for playing ball would be as great as the penalties for not playing ball would be terrible.

Either way, message received. The aristocrats seem to have weathered the peasant revolt just fine and are back to happily fleecing their sheep.

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