News Story: Trump is preparing to gut Wall Street oversight. This gives Democrats a huge opportunity.
So I hate to say it, but I told you so….
With all his talk about taking on Wall Street and ending the rigged economic system, today Donald Trump took the first step of deregulating Wall Street banks. By cutting back on regulations adopted in the Dodd-Frank law, the Trump administration essentially turned the clock back to a time before the economic collapse of 2008.
Now, I don’t expect Donald Trump or his supporters to know this, but before the Dodd-Frank law was enacted banks were allowed to engage in various levels of risky behavior, but here are two main ones.
1) banks were not required to keep suitable levels of funds on hand. As a result, when investments failed, the banks had little cash-on-hand to pay off debt. This inevitably led to several banks going under – which was partly to blame for the economic downturn of 2008.
2) banks were restricted from engaging in risky behavior such as operating like a hedge fund or conducting business in the derivatives market. This ended the casino like atmosphere where Wall Street trader were basically gambling on investments.
The Trump deregulation of Wall Street doesn’t represent a cracking down on Wall Street as he promised to do. Instead it represents a giveaway to traders who are once again gearing up to gamble knowing that you, the tax payer, will be there to bail them out once again!
For more information about the economic collapse and the role of deregulation check out this documentary: https://www.youtube.com/watch?v=4CeH0MBID_Y