WASHINGTON, D.C.—Dennis M. Kelleher, Co-founder, President, and CEO, issued the following statement in connection with Trump’s first 100 days and the release of a new Report: “Trump’s Wall Street Deregulation on Steroids is Going to Cause a Horrific Economic Crash on Main Street.”
“While the financial industry claims it’s overregulated and that regulations are just needless red tape choking economic growth, the facts show just the opposite as detailed in today’s Report: the industry has been deregulated on a bipartisan basis for decades, and that deregulation has led to crashes, bailouts and economic calamity, all of which have killed jobs, businesses, and economic growth. The bottom line is that deregulation is good for Wall Street and financial industry profits and bonuses, but pretty bad for everyone else.
“Trump’s first 100 days has made all this worse, as his deregulation has already been widespread and opened cracks in the foundations of our economic and financial systems. The headlines have focused on Trump unleashing crypto and dismantling consumer protection at the CFPB, but that’s just the tip of the iceberg of his dangerous deregulation. There’s no doubt that it is going to be much deeper and broader over the next four years.
“While Trump’s actions alone might not cause a crash, the fact it comes on top of decades of deregulation virtually guarantees a horrific crash. Worse, given the no accountability bailouts, the risk is significantly heightened because moral hazard in finance—the belief that they can do anything, reap the short-term rewards, and never face any consequences—has probably never been higher.
“The Report also details the painful economic consequences of deregulation and crashes. For example, after the 2008 crash, it took 10 years for unemployment to return to pre-crash levels, and 90% of the American people were poor at the end of 2016 than they were pre-crash – by an astonishing 17% to 35%. Tellingly, the financial industry made trillions of dollars in profits and pocketed hundreds of billions of dollars in bonuses during those same years – after it was bailed out by those suffering Americans.
“Trump’s deregulation might cause an economic sugar high, but it won’t be durable or sustainable. Ultimately, it’s going to cause instability and kill credit, lending, business, and growth. That’s the unmistakable lesson of the previous decades of deregulation, and it’s going to have dire economic, social and political consequences.”
The Report is available here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
