betraying campaign promises
More so than any modern Republican presidential nominee, Donald Trump positioned himself as an opponent of Wall Street. In fact, as regular readers know, the GOP candidate spent months insisting that it was Hillary Clinton, not himself, who’d do the financial industry’s bidding.
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.
The news comes by way of White House National Economic Council Director Gary Cohn, who also happens to be the former president and chief operating officer of Goldman Sachs – one of several Goldman vets Trump brought onto his team, despite railing against the finance giant during the campaign.
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.