During the 2016 campaign, Donald Trump ranted and railed against the “global power structure” that has “robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.” He promised to fight this “rigged system” on behalf of ordinary Americans, and would often cite Goldman Sachs, the New York investment bank, as the epitome of that global power structure.
The screengrab above, taken from a Fox News broadcast Friday, provides photographic proof that Trump has completely betrayed both that pledge and the voters who put him into office. An administration elected as a backlash against the elite has become an administration of, by and for that very elite.
And you don’t have to take my word for it. The evidence is right in front of your eyes.
See the tall, bald man standing to the right of the president? His name is Gary Cohn. Until late last year, Cohn was president and chief operating officer of Goldman Sachs. Today, he is Trump’s chief economic adviser and head of the National Economic Council. (Goldman Sachs gave Cohn a $285 million severance package when he left the company to work for Trump.)
The occasion captured in the screengrab is the signing of two executive orders, which Cohn helped to draft. The first EO instructs Treasury Secretary Steve Mnuchin — another Goldman Sachs alumnus — to work to remove restraints on the financial industry that were imposed to prevent a recurrence of the 2008 Wall Street meltdown. Under those rules, for example, banks that rely on Federal Reserve deposit guarantees are no longer allowed to bet on highly speculative and risky investments. Trump’s executive order attempts to undermine that restriction as much as possible.
Goldman Sachs and its stockholders are very pleased. Since Trump’s election, Goldman stock has jumped by 33 percent. As of 12:30 p.m. today, Monday, its has gained almost $5 billion in value just since the executive order was signed Friday.
Now, let’s focus a bit on the second executive order signed that day by Trump, which deals with the relationship between stockbrokers and their clients. It too tells us a lot about the true loyalties of this administration.
Most people think of their stockbrokers as investment advisers paid to help them maximize their wealth. That misconception is particularly popular among people whose main investments are in 401(k) retirement accounts. Such investors tend to be less sophisticated and more trusting; usually, they have no idea that stockbrokers are basically high-end salesmen who have no legal obligation to act in their customers’ best interests. Brokers can — and very often do — steer their clients into high-commission, high-fee investment products that make the brokers a lot of money, but eat up a big share of their clients’ retirement savings. And most of their customers have no idea that it’s even happening.
Under rules initiated by the Obama administration and due to take effect in April, that would change. Stockbrokers for the first time would have a fiduciary obligation to their clients, meaning that they would have to put their clients’ financial interests ahead of their own. Consumer protection groups, AARP and other groups strongly support that change, but the financial industry strongly opposes it because it strikes at a lucrative revenue stream.
Look again at the photo above. See the woman in the green dress, fists clenched in excitement, standing to the left of Trump? That’s U.S. Rep. Ann Wagner (R-Mo.) She has led the fight against the so-called “fiduciary rule,” and a peek into her campaign finance disclosures shows you that she has been well-rewarded for it.
Here’s a breakdown of her 2015-16 contributions, by industry source:
As you can see, the finance, insurance and real estate industries contributed almost $900,000 to Wagner in that two-year cycle alone, far more than any other source.
Of course, when Wagner is explaining her opposition to the fiduciary rule, she doesn’t mention all the money poured into her coffers by the finance industry. In fact, to hear her tell it, she’s not doing it to help Wall Street at all. Instead, she says, “we are returning to the American people, low- and middle- income investors, and retirees, their control of their own retirement savings.”
That’s right, they’re doing it for the little guy. Out of the goodness of their beneficent hearts, Wall Street brokerage firms have spent millions of dollars lobbying against the fiduciary rule and invested millions more in politicians such as Wagner to ensure that small-time investors will still have the freedom they need to be duped into high-fee, high-commission investments that are totally unnecessary and counterproductive.
Because that’s the kind of people they are.