Clinton, Trump said, is “nothing more than a Wall Street puppet.” Her campaign is “paid for by her bosses on Wall Street,” he added. The public was told that Clinton is “owned by Wall Street,” “is in [the] pocket of Wall Street,” and is “bought and paid for by Wall Street.”
As it turns out, Trump magically transformed soon after winning the election, tapping industry insiders to help run his administration, and even inviting a Wall Street insider to oversee Wall Street. Today, the new president is going even further, delivering on one of the financial industry's top policy priorities.
President Donald Trump on Friday plans to sign an executive action that establishes a framework for scaling back the 2010 Dodd-Frank financial-overhaul law, part of a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis.
Mr. Trump also plans another executive action aimed at rolling back a controversial regulation scheduled to take effect in April that critics have said would upend the retirement-account advisory business.
But to appreciate just how outrageous this is, it's important to understand the basics of the "controversial regulation" policy.
Let's recap. Under the pre-Obama rules, when investors met with their financial advisers to talk about their IRAs, the advisers operated under something called the "suitability standard." As Slate's Helaine Olen explained a while back, this standard allowed finance-industry professionals "to make suggestions for retirement investments that take into account how clients' investments buttress their own bottom line. The advice just couldn't be out-and-out malfeasant."
Your adviser couldn't direct you to an investment he or she knows to be bad for you, but he or she wasn't required to recommend the best possible option for you, either. If there was a retirement-fund option that basically worked to your benefit, and that also helped your adviser with commissions or rewards, he or she could push you in that direction -- even if you'd make more money following a better path.
The Obama administration estimated this translated into $17 billion a year that could have been in investors' retirement accounts, but wasn't.
So, the Democratic administration scrapped the "suitability standard" and replaced it with the "fiduciary rule" so your adviser has a legal obligation to act in your best interest.
Today, Donald Trump is undoing what Obama did. The Republican president is giving big banks the green light to put their profits above your interests, even if that means they give you bad advice on purpose.
This from the guy who ran as an opponent of Wall Street.
In his inaugural address, Donald Trump declared that, effective immediately, he was transferring power to "you, the people." The new president added, "For too long, a small group in our nation's capital has reaped the rewards of government while the people have borne the cost.... That all changes starting right here and right now because this moment is your moment, it belongs to you."
Those who believed this were the victims of a fraud.
Postscript: Gary Cohn, the aforementioned director of the White House National Economic Council, told the Wall Street Journal, in reference to the fiduciary rule, "We think it is a bad rule. It is a bad rule for consumers. This is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn't eat it because you might die younger."
That's a bizarre analogy. When your financial advisor is presenting you with investment options, Cohn believes there's nothing wrong if some of those options are "unhealthy" for you.
Anyone who characterizes this administration as "populist" deserves to be laughed at.