"A crash could prove to be President Trump’s worst legacy. Not only is he -- and the Fed he’s helping to create -- not paying attention to the alarm bells (ignored by the last iteration of the Fed as well), but he’s ensured that none of his appointees will either.
After campaigning hard against the ills of global finance in the 2016 election campaign and promising a modern era Glass-Steagall Act to separate bank deposits from the more speculative activities on Wall Street, Trump's policy reversals and appointees leave our economy more exposed than ever.
When politicians and regulators are asleep at the wheel, it’s the rest of us who will suffer sooner or later. Because of the collusion that’s gone on and continues to go on among the world’s main central banks, that problem is now an international one."
Nomi Prins
One can assume many motivations for the munificent treatment that the Big Banks have received in the US.
The advertised fig leaf motive is that this was done for 'the sake of the system' wrapped in dollops of fear and uncertainty mixed well with jargon and complexity. This is the art of the fraud.
We do have the historical example, from a much worse banking crisis in the US during the 1930s, that a thorough reform of the banking system is possible, and significantly less expensive than bailing them and their elite holders out.
The major difference in the handling of each crisis is how the resolution prioritizes the distribution financial and legal consequences.
In the 1930s the public and the depositors of the banks were given the highest priority for protection. In the most recent banking crisis it was clearly the banks and their creditors and management who were given the greatest amount of consideration by far.
One might attribute this to the prevailing cultural climate, at the forefront of which is the current political campaign financing system that provides enormous amounts of money for the politicians from the financial class.
There is also the phenomenon of a discrete and significantly more powerful and wealthy professional elite as a coherent class, many of whom know each other, have gone to the same schools, and move back and forth between diverse economic sectors and public office. And they have significant personal financial entanglements.
There is also a possible consideration that the four or five Wall Street Banks were saved because they serve a strategic purpose in supporting US economic policy around the world, as extra-governmental entities that, as the situation may demand, may act like financial dreadnoughts. This is a much more tentative consideration, but it is worthy of note.
This is of more than historical importance. Why? Because it is all going to happen again, most likely during Trump's term of office. It makes little difference who is sitting in that chair, since Hillary would have certainly would have served the same purposes.
It would be a monumental mistake to assume that the powers that be will have 'learned anything' from what they have done during the last two financial crises since 1999. They were not 'asleep at the wheel' then and are not so now. That is a myth, like the CEO of the failed business who can claim to have little or no involvement in the company which he served for enormous amounts of compensation, as in the case of Enron for example. Or MF Global.
The thought that this time will be different assumes something very fundamental about their priorities and purposes.
And by all recent accounts and current observations, you are not one of them.
