WHICH side are you on? Are you with Donald Trump, or with the Washington insiders who want to undo his election? Do you favor the legitimate president of the United States, or an unelected “deep state” — bureaucrats, judges, former F.B.I. directors, the media — that’s determined not to let him govern? Are you going to let a counterrevolution by elites bring down a man who was elevated to the White House precisely because the country knows that its elite is no longer fit to govern?
This is how the debate over Donald Trump’s mounting difficulties is being framed by some of my fellow conservatives, from Sean Hannity to more serious pundits and intellectuals.
.. But Trump is not actually governing as a populist or revolutionary, and the rolling crises of his first four months are not really about resistance to an “America First” or “drain the swamp” agenda
the various outsider groups that cast their lot with him
- working-class ex-Democrats to
- antiwar conservatives to
- free-trade skeptics to
- build-the-wall immigration hawks to
- religious conservatives fearful for their liberties —
have seen him pick very few difficult fights on their behalf.
.. his legislative agenda has been standard establishment-Republican fare — spending cuts to pay for upper-bracket tax cuts, rinse, repeat.
.. he’s mostly handed foreign policy over to his military advisers
.. Religious conservatives got Neil Gorsuch because he was a pedigreed insider. But they aren’t getting anything but symbolism on religious liberty, because Trump doesn’t want to pick a fight with the elite consensus on gay and transgender rights.
the establishment keeps winning:
- Planned Parenthood was funded in the budget deal and
- the border wall was not, the promised
- NAFTA rollback looks more likely to be a toothless renegotiation, Trump’s occasional talk about
- breaking up the big banks is clearly just talk,
- we haven’t torn up the Iran deal or
- ditched the Paris climate accords, and more.
.. populism needs a seat at the table of power in the West, and the people who voted for our president do deserve a tribune.
.. Trump is not that figure. As a populist he’s a paper tiger
.. too incompetent and self-absorbed to fight for them.
he’s not being dogged by leaks and accusations because
- he’s trying to turn the Republican Party into a “worker’s party” (he isn’t), or because
- he’s throwing the money-changers out of the republic’s temples (don’t make me laugh), or because
- he’s taking steps to reduce America’s role as policeman of the world (none are evident).
.. he’s at war with the institutions that surround him because he behaves consistently erratically and inappropriately and dangerously, and perhaps criminally as well.
.. there is no elite “counterrevolution” here for them to resist, because there is no Trump revolution in the first place.
‘21st Century Glass-Steagall’ Means Whatever You Want It To, Unless You Want It To Mean Glass-Steagall
Mnuchin’s response at times approached the cosmic incomprehensibility of a Buddhist koan:
There actually wasn’t a reversal. The Republican platform did have Glass-Steagall. We, during the campaign . . . specifically came out and said we do support a 21st Century Glass-Steagall, which is – that means that there are aspects of it that we think may make sense. But we never said before that we supported a full separation of banks and investment banking, if we—
Here Warren interjected: “There are aspects of Glass-Steagall you support, but not breaking up the banks and separating commercial banking from investment banking? What do you think Glass-Steagall was if that’s not right at the heart of it?”
The exchange is worth quoting in bulk:
MNUCHIN: Again, I’m well aware of what Glass-Steagall was. As you may know the original concern about Glass-Steagall was about conflicts, not about credit risk. And if we had supported a full Glass-Steagall we would have said at the time that we believed in Glass-Steagall and not a 21st Century Glass-Steagall. We were very clear in differentiating it. I have realized and I had not realized that your bill was named the 21st century Glass-Steagall—
WARREN: And it has been for three years now.
MNUCHIN: I apologize that I was not aware of that, so—
WARREN: I still haven’t heard the answer to my question. What do you think Glass-Steagall was if it wasn’t separating commercial banking from investment banking?
MNUCHIN: Again, the fundamental part of Glass-Steagall was, as you’ve just outlined, the separation of investment banking from commercial banking because people were concerned about conflicts—Again there’s some back-and-forth as Warren takes on the look of someone watching a gory athletic injury in slo-mo. “This is like something straight out of George Orwell,” she says.
.. Yet she takes another crack at it. Again, worth quoting in full:
WARREN: I have to try this one more time. What does it mean to be in favor of 21st Century Glass-Steagall if it does not mean breaking apart these two functions in banking?
MNUCHIN: You know what, I’d be more than happy to come and see you and follow up—
WARREN: Just tell me what it means!
MNUCHIN: Had we – we never came out and said separate banks from investment—
WARREN: Just tell me what 21st Century Glass-Steagall means if it doesn’t mean breaking apart those two functions. It’s an easy question – or an impossible question.
MNUCHIN: It’s actually a complicated question because there’s many aspects of it, OK? The simple answer, which we don’t support, is breaking up banks from investment banks. We think that would be a huge mistake. But again, I’m more than happy to listen to your ideas on it. You obviously have strong views, and I’d be happy to follow up and listen to you.
WARREN: This is just bizarre, the idea that you could say we are in favor of Glass-Steagall but not breaking up the banks.
MNUCHIN: We never said we were in favor of Glass-Steagall, we said we were in favor of a 21st Century Glass-Steagall. It couldn’t be clearer!There you have it! As we have long held, the Trump administration’s “New Modern Twenty-First-Century Glass-Steagall” is just a vacuous string of mouth-sounds with no bearing on anything but the ability of Gary Cohn and Mnuchin to make it through an interview without sounding like a moron.
Steven Mnuchin Says Breaking Up Commercial Banks and Investment Banks Would Be A Huge Mistake
This was the first time that a Trump administration official has said that in its view a 21st century Glass-Steagall would not require the separation of commercial banks and investment banks.
.. The hearing quickly became heated, with Warren become increasingly annoyed with Mnuchin’s answers.
“There are aspects of Glass-Steagall that you support but not breaking up the banks and separating commercial banking from investment banking? What do you think Glass-Steagall was if that’s not right at the heart of it?” Warren asked.
“I’m well aware of what Glass-Steagall was,” Mnuchin said.
“This is like something straight out of George Orwell,” Warren said.
Mnuchin argued that the purpose of Glass-Steagall was to avoid conflicts of interests that can arise when banks act as brokers and securities dealers as well as lenders and deposit takers.
.. “This is just bizarre, the idea that you could say we are in favor of Glass-Steagall but not breaking up the banks,” a clearly frustrated Warren said.
.. Dealbreaker, widely-read by Wall Street’s younger set, described Mnuchin’s answers as having “the cosmic incomprehensibility of a Buddhist koan.”
What Would Breaking Up the Banks Even Look Like?
A too-big-to-fail, too-complex-to-manage bank such as JPMorgan Chase should be split into three parts. The investment bank could be spun off entirely. JPMorgan’s creative investment bankers would relish the chance to turn the franchise into a partnership, with the freedom to pay themselves what they please. The remaining bank would be split into a wholesale bank, for large corporate clients, and a retail bank, the only taker of insured deposits.
.. The investment bank would be regulated as lightly as a hedge fund, but would not have access to financing that uses taxpayer money. The wholesale bank would provide only simple banking products, including foreign exchange and interest-rate hedges. The retail bank would be limited to consumer banking and small-business and mortgage lending, with no scope for high leverage or the big-scale securitization that sank otherwise simple banks, such as Washington Mutual, in the crisis.
.. Just as important as a structural change is the need to eliminate the culture of bonuses at consumer-facing banks.
.. The bonus pool would skim off 40 to 50 percent of revenues up-front while any losses hit only shareholders and taxpayers.
.. In my view, when banks have access to central-bank funding there should be a legal limit to what they can pay their employees ($500,000 a year wouldn’t be unreasonable).
.. In my view, when banks have access to central-bank funding there should be a legal limit to what they can pay their employees ($500,000 a year wouldn’t be unreasonable).