Tuesday, July 4, 2017

Trump adds new creatures to the Washington swamp and makes the rich richer

U.S. president Donald Trump on the campaign trail railed against the influence of Wall Street on U.S. politics and promised to drain the Washington swamp but has done exactly the opposite.

Trump's cabinet is filled with formerly important Wall Street figures and his administration has added new life to the Washington swamp not drained it. Rather than being apologetic about these actions, Trump moves on the offensive, in effect giving a vigorous defense of having a government controlled by many who are part of the one percent or the ultra-rich. The one percent for some unfathomable reason must not be interested in money and their own welfare but the interests of the poor and middle class who apparently are not capable of thinking in ways that advance their own interests. They need the kind of thinking only the rich can provide. Trump remarked to supporters in Iowa: "Somebody said why did you appoint a rich person to be in charge of the economy? ... I said because that's the kind of thinking we want. I love all people, rich or poor, but in those particular positions, I just don't want a poor person. Does that make sense?" It doesn't make sense, Trump rarely does. These are the people that Trump lambasted during the election campaign whose influence on U.S. politics had to be curbed--the people who had control over Hillary Clinton. Now they are praised and put in control. It is their kind of thinking that the U.S. needs. For some reason Wall Street and the ultra-rich changed their stripes and no longer are concerned with their self-interest or money but with the plight of the poor and no doubt the middle class as well.
Trump argues that former Goldman Sachs president Gary Cohn and billionaire investor Wilbur Ross "had to give up a lot to take these jobs" and "went from massive pay days to peanuts". Of course, in government they can pass legislation that vastly improves the situation for firms with which they were involved and they can return to Wall Street after they have served in government and the system will produce a new generation of swamp creatures.
The record of Cohn in business shows the kind of thinking that Trump needs. Cohn was president and Chief Operating Officer of Goldman Sachs during the 2008 financial crisis when it lost $1.2 billion of their clients' money. In 2010 Goldman agreed to pay $550 million to settle civil fraud charges by the Securities and Exchange Commission (SEC) for misleading buyers of mortgage-related securities. Imagine how such thinking can help the poor and the US taxpayer. Wilbur Ross helped Trump avoid bankruptcy in the early 1990's and also saved his Taj Mahal casino hotel from financial collapse. Now that's the kind of thinking Trump wants.
Not everyone thinks that the rich getting richer is a good thing. A recent article by Larry Beinhart concludes:Every time the rich get too much money - as marked by a sharp rise in income inequality - the same things always happen. A bubble! A grand, exuberant, investing, spending, paper profits spree. It bursts. There's a crash. Banks fail. There's a recession. Even a depression. In which everyone gets hurt. Not just the fools who thought this time stocks - or real estate - will keep going up forever!

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