GOP Includes Reinstatement of Glass-Steagall Into Party Platform

Donald Trump is adding fuel to Wall Street anxiety about his candidacy, jabbing directly at big banks this week with new language in the official Republican party platform that calls for the restoration of the 1933 Glass-Steagall Act, a move that would force the break-up of large financial institutions…

 

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Submitted by Michael Kriger, Liberty Blitzkrieg:

I remain unconvinced that Donald Trump will be as hard on Wall Street as many of his supporters think he’ll be if elected President, but some of the following from the Washington Post certainly represents a breath of fresh air.

CLEVELAND — Donald Trump is adding fuel to Wall Street anxiety about his candidacy, jabbing directly at big banks this week with new language in the official Republican party platform that calls for the restoration of the 1933 Glass-Steagall Act, a move that would force the break-up of large financial institutions.

The embrace of the controversial law, long championed on the left, is deepening the estrangement of the financial services sector from the presumptive Republican nominee, according to industry leaders and lobbyists, who are now struggling to assess what role and influence they would have in a Trump administration.

Absolutely none would be the right amount.

Tony Fratto, a former Treasury and White House official in the George W. Bush administration, called the embrace of Glass-Steagall “really dumb.” He suggested it could push pragmatically-oriented bankers toward Democratic contender Hillary Clinton.

“Push” bankers to Clinton. Are you kidding me? If they were pushed any closer together they’d be fused at the hip

“They are not buying a ticket on the crazy train,” said Fratto, who now represents major banks and other financial industry players at Hamilton Place Strategies. “Banks and the financial sector do not like volatility. He is the volatile candidate, and under those circumstances, supporting Hillary Clinton looks like the flight to safety.”

“Flight to safety.” It appears D.C. insiders and lobbyists are now using stale, stupid Wall Street lingo every chance they get.

Perhaps the most telling evidence of the alienation is Wall Street’s near-absence from the festivities here this week. Major banks that sponsored GOP nominee Mitt Romney’s coronation in Tampa four years ago are missing. Some of the party’s wealthiest donors, such as hedge fund billionaire Paul Singer, are pointedly staying away. The Financial Services Roundtable, the industry’s leading trade group, is not even putting on an event. 

The distancing comes after Trump’s swipes at Wall Street and positions on free trade and immigration have alarmed finance industry leaders, said Howard Schweitzer, who served as a senior Treasury Department official under President Obama and President George W. Bush. 

“People assume because he resides in New York that he’s cozy with Wall Street, and he just isn’t,” Schweitzer added. “For all those reasons, they aren’t excited about him. They don’t know him and they don’t like his policies.”

In 2012, the financial services industry lavished money on Romney, a private equity chieftain, with the largest share of contributions to his campaign coming from employees of Goldman Sachs, Bank of America, Morgan Stanley, JP Morgan Chase, Wells Fargo and Credit Suisse,according to the Center for Responsive Politics. The securities and investment sector alone poured $37 million more into a super PAC backing the GOP nominee. 

The response to Trump, by comparison, has been notably muted: as of May 31, employees of banks, securities firms and insurance companies had donated just $127,041 to his campaign, according to the center

Sounds good, until…

Trump allies note that the current figures do not reflect the campaign’s biggest fundraising haul, when it raised $52 million last month in conjunction with the Republican National Committee.Steven Mnuchin, a hedge fund manager with strong ties to Wall Street, serves as Trump’s finance committee chairman, and said he has seen a strong response from the financial services sector. 

“I believe there is significant support,” Mnuchin said. “We had 22 events across the country last month, and within those events there was very significant support from business leaders, private equity funds, hedge funds, financial services across the board.”

Mnuchin said the media has promoted an inaccurate image of Trump’s posture toward the industry.

“Donald is not critical of Wall Street,” he said. “He is critical of Hillary Clinton for accepting large speaking fees from Wall Street. That’s different from him being critical of the financial services industry.”

You done vomiting yet? Me too.

By pushing for its renewal, the Republican party now finds itself aligned with liberals such as Sen. Bernie Sanders of Vermont, who succeeded in getting a similar measure into the Democratic party platform this year. Hillary Clinton has been opposed to bringing the law back.

One prominent banking industry executive, who requested anonymity because he was not authorized to speak to the media, said the call for Glass-Steagall’s reinstatement will further push Wall Street away from the Republican presidential candidate. “It adds to the impression of unpredictability and uncertainty, two qualities that are a turn-off to banks,” he said.

The controversy could drive more Wall Street funds to Clinton, who already has the backing of industry leaders such as former Goldman Sachs chief and Treasury Secretary Hank Paulson. The former secretary of state and her husband have deep ties to the financial services industry, which has already poured at least $35 million into her campaign and allied super PACs, according to an analysis of campaign finance data by The Washington Post. 

But there is a striking dearth of industry events taking place this week in Cleveland — and a diminished corps of lobbyists working the crowd. One leader of a Washington-based financial services industry group, who requested anonymity to describe private conversations, said he did not know of a single one of his peers or colleagues who planned to attend. 

The less financial parasites swarming around U.S. Presidential candidates the better. That’s the only way they’ll get the justice they deserve the next time a crisis hits.