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!

Jay Clayton Wall Street Lawyer, newest member of Trump's rejuvenated Washington swamp

Far from clearing the swamp in Washington as he promised, Trump is simply appointing new Wall Street creatures to replace Democrats.

The latest appointment is elite Wall Street lawyer Jay Clayton whose good works include defending big banks for their financial crisis crimes and advising Goldman Sachs on its government bailout. Trump claimed that Clayton would release the job-creating power of the U.S. economy while at the same time providing oversight. Trump hopes to make the oversight simpler and no doubt less than previously. Trump said: "We need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers. Robust accountability will be a hallmark of his tenure atop the SEC, and the financial security of the American people will be his top priority."

Clayton is a partner in the important law firm of Sullivan and Cromwell. He has advised on major deals such as the Alibaba IPO and the sale of the NBA, Atlanta Hawks. His bio at the firm show he was involved in helping work out mortage settlements between large financial institutions and the government. The institutions had issued or underwritten hundreds of toxic mortgage deals just prior to the economic meltdown. The firm helped JP Morgan reach a $13 billion deal with the Department of Justice in 2013.

Clayton also had connections to Bear Stearns the investment bank that went under during the financial meltdown. He represented the company in its fire sale to JPMorgan. Also, Clayton helped out Goldman Sachs with its TARP bailout as well as a $5 billion investment from Warren Buffet's Berkshire Hathaway during the crisis. Clayton has also worked for the SEC. Clayton says he wants to strike a balance between providing oversight and helping the economy. Given that regulations will be reduced and Clayton has strong ties to big financial institutions the balance will be weighted towards helping the financial institutions prosper. Rather than say this, he talks of helping the economy which is politically more palatable. Clayton said: "We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: create jobs." The appointment of Clayton is a clear message that Trump is intending to reduce regulations that corporations find irksome or reduce economic growth. Clayton has pledged to ensure that companies and investors have the confidence to invest in the United States.

The present head of SEC, Mary Jo White is giving up the post on January 20 even though her term expires in June 2019. Senator Elizabeth Warren has criticized White as not preventing businesses from pouring cash into politics. It is not clear that Clayton will do any better and he will not be trying to implement Dodd-Frank reform rules as was White but trying to dismantle them. Clayton won the job over former federal prosecutor Debra Yang. While also a prominent corporate lawyer Yang was tough as a prosecutor and took on a violent drug gang as well as investigating financial fraud. Democratic Senator Sherrod Brown, who is on the Senate Banking Committee said that Clayton was an "attorney who's spent his career helping Wall Street beat the rap". Adam Green, of the Progressive Change Campaign Committee, compared nominating Clayton as head of the SEC to allowing the fox to guard the henhouse on Wall Street. On the other end of the political spectrum, the Investment Adviser Association, which represents SEC-registered firms claimed Clayton was a "highly regarded, respected and accomplished lawyer" with a "deep understanding" or complex transactions and regulations. Jaret Seiber, an analyst at Cowen and Co. said the selection of Clayton was a conventional choice for a Republican president. Other creatures in the swamp will recognize Clayton as a welcome comrade.

Clayton has pleaded for less onerous restrictions on foreign public companies in the U.S. and also participated in writing an article in 2011 that advocated less zealous enforcement of the Foreign Corrupt Practices Act. Clayton's wife is employed by Goldman Sachs as a private wealth advisor. Senator Sherrod Brown said: "It's hard to see how an attorney who’s spent his career helping Wall Street beat the rap will keep President-elect Trump's promise to stop big banks and hedge funds from ‘getting away with murder.'" Richard Painter, a law professor at the University of Minnesota, who served as chief ethics lawyer under the George W. Bush administration said that Clayton's wife's employment at Goldman Sachs created a problem: "You cannot be chairman of the Securities and Exchange Commission and have you or your spouse have any financial interest in Goldman Sachs." He said she would have to divest herself of any stock or options she holds and negotiate a flat salary. As the appended video points out, supporters of Trump should be digusted at his appointment of so many prominent Wall Street figures to his administration after claiming that Hillary Clinton was a puppet of Wall Street and that he was going to drain the Washington swamp.