Recently, the new administration took aggressive steps to roll back Dodd Frank – legislation meant to protect consumers from aggressive banking practices. Not being any expert, at all, on Dodd Frank I did figure out one thing – part of it mandated the retention of certain level of funds to protect the bank from going under, and from us losing all of our savings. I did note that it appears this regulation wasn’t really good for anything other than another banking calamity.
Let’s look back to the banking / real estate collapse of 2008. Here we have people lying to get loans; underwriters on commission playing loose with the rules; bankers who would take any loan and then sell it off, and bank regulators who turned a blind eye to it all.
Goldman Sachs, a main player in this mess, made a huge fortune. Then, bang they were about to go out of business. What?? One of the world’s largest banking institutions soon to be defunct.
Oh no, no, no says the government. We can’t let a cornerstone of our financial industry go down (why not, I ask). So, let’s give them 10 billion of tax payers hard earned money to bail them out. You know, when you have to work two jobs just to pay that mortgage and still have your taxes paying it too.
Gary Cohen, the head of Goldman at the time, would make roughly $9.1 million in compensation. That’s right, your tax dollars used to save this “institution” and give him a nice little bonus.
Fast forward to last week. Trump beaming with his new National Economic Counsel advisor. And rather than bolstering Dodd Frank to support weaknesses in the regulation, he dismantles it and leaves us all exposed to another 2008.
And smiling behind him is that new National Economic Counsel advisor – Gary Cohen.