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Trump’s Treasury Wouldn’t Resurrect Glass-Steagall – Here’s Why

8 | By Shah Gilani

If you read the 58-page draft of the Republican Party’s official party platform you’ll come across a surprising one-liner: “We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment.”

But before Republican big-bank haters get excited, everyone should know that’s not presidential candidate Donald Trump’s one-liner.

In fact, it just might turn out to be a joke.

Based on who Mr. Trump is reportedly considering for Treasury Secretary in his would-be cabinet, it’s highly unlikely, Republican platform rhetoric aside, a Trump Administration would be even remotely interested in resurrecting Glass-Steagall.

Frighteningly, but not surprisingly, there’s a huge Goldman Sachs nexus connecting the end of Glass-Steagall to the future prospect of reviving it, with Donald Trump squarely in the middle.

Here’s how a former Goldman Sachs operative murdered Glass-Steagall for $125 million, why another former Goldman Sachs Treasury Secretary would keep it buried, and what Donald Trump, if elected, should do about it.

Let’s get to it…

The Ugly Truth About The Repeal of Glass-Steagall

To date, the anointed Republican presidential candidate hasn’t laid out his position on big banks or reinstating the old Glass-Steagall Act.

The Glass-Steagall Act, signed into law in 1933, made it illegal for deposit-taking commercial banks to own investment banks or insurance companies. It was finally overturned by Democrat-led efforts with the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999, and signed into law by President Clinton.

What’s too often forgotten is that former Goldman Sachs co-Chairman and co-Senior Partner Robert Rubin was Bill Clinton’s Treasury Secretary at the time. Rubin personally helped lobby for and usher through the Financial Services Modernization Act.

Rubin left the Treasury after his government service was done to join Citigroup, which was created a year prior to the enactment of the Financial Services Modernization Act by an illegal merger of Citibank, a giant commercial bank, and Travelers Insurance, a giant insurance company.

You read that right. The merger of the two in 1998 was illegal under Glass-Steagall, which was overturned in 1999 to make the merger legal.

Rubin reportedly made over $125 million at Citigroup, the original “Too Big to Fail” post-Gramm-Leach-Bliley megabank, between 1999 and 2009, even while it had to be rescued by the Federal government in 2008.

Why’s that history important? Because Donald Trump’s rumored top pick for Treasury Secretary is another former Goldman Sachs insider…

The Vampire Squid Spreads Its Tentacles

According to hedge fund honcho Anthony Scaramucci, himself a big Trump supporter, Trump’s Treasury Secretary choice is Steve Mnuchin.

Mnuchin spent 17 years at Goldman and left a multimillionaire. But he didn’t leave his Goldman connections far behind when he left.

The would-be Treasury Secretary left Goldman Sachs to work for his former Yale roommate, investment fund honcho Eddie Lampert, who himself had worked at Goldman Sachs directly under Robert Rubin.

Mnuchin later founded Rat-Pac Dune Entertainment, with connections – including to billionaire entertainment mogul David Geffen – he made through Lampert.

But banking kept calling Mnuchin.

In 2009 Dune, in a hedge-fund backed deal, bought the assets of failed housing lender IndyMac  from the FDIC, and in the process formed OneWest Bank with about $1.3 billion.

OneWest was sold to CIT Group (which not surprisingly was itself rescued and run by another former Goldman Sachs president and co-chief operating officer, John Thain) for a reported $3.4 billion.

The Goldman Sachs nexus throughout the Federal government – and more importantly throughout the Treasury and Federal Reserve – should be a red flag for anyone hoping for an objective, economy-minded Treasury Secretary, and not a dyed-in-the-wool multibillionaire wannabe who knows how to use his connections.

Of course, Donald Trump knows all this. After all he is a New York billionaire businessman who knows many of the Goldman – or Government Sachs, as they are called – operatives swimming in the pool The Donald is intimately familiar with.

If Donald Trump hews to the Republican platform and openly advocates for the resurrection of Glass-Steagall, which I hope he does, he better find another Treasury Secretary, one who’s not a Goldman Sachs government infiltrator and traitor to the “free economy.”

Democrat William Jennings Bryan said in his keynote speech at the 1896 Democratic convention in Chicago, “the banks should go out of the governing business.”

If Donald Trump wants a free market to break the economy out of the shackles big banks put it in, he needs to close the door on Goldman’s undue influence.

Sincerely,

Shah

8 Responses to Trump’s Treasury Wouldn’t Resurrect Glass-Steagall – Here’s Why

  1. Robert in Vancouver, BC says:

    If Trump is President it’s at least a possibility the Glass Steagall Act would be re-instated, so US banks would be forced to be like Canadian banks.

    But if Hillary is President there’s no chance of Glass-Steagall coming back or any other clamp down on Wall Street banks. After all, Wall Street banks are (and will continue to be after she retires) her and Bill’s biggest source of personal income.

  2. Joe Maxwell says:

    I dislike Hillary but I was shocked a few days ago when I saw that Donald was going to make a Goldman Sachs person his Secretary of the Treasury. I was hoping he was going to do something about reducing the power of the Deep State. Now it doesn’t look so good. The one asset that Donald has going for him is he knows how to run a business and create jobs. That may come in handy if our economy collapses.

  3. Gregg says:

    I was not familliar with this act, but had it been in place in 2008, we would have save billions of dollars, tax-payer’s, dollars, by NOT bailing out the banks (and others like GM).

    Hopefully Trump or an honest staffer reads your appraisal does the right thing – resurrecting the Glass-Steagal Act!

  4. Idrea says:

    OMG people WAKE UP! The only hope for reinstating Glass-Steagal is either Bernie Sanders or Elizabeth Warren… and a cooperative (rather than obstructionist) Congress.

    • George Heron says:

      If Secretary Clinton becomes President she is likely to try to reinstate G-S because of pressure from senators Warren and Sanders.

  5. jlr says:

    It cannot be wise to support snakes of any kind, especially not the snakes exhibiting long-standing, evident, major corruption as partly revealed and described recently by the FBI director. This election will determine whether or not the people choose to fight and disallow corruption of public officials. Bought candidates represent the essence of corruption. But worse still if the electorate itself has been bought: because then game over, we’re sunk. We must insist that Bernie’s candidacy and Trump’s have been all about this all-important issue. Let’s at least recognize that if we are clear about this, there will be hope that the country may recover. Yes, restoring the crucial aspects of G-S will be important, but if a corrupt candidate is elected President, nothing whatever can save the American people.

  6. Kermit says:

    Come on People, think just a little here. HRC can’t reinstate G-S…it was her husband who signed off on it. Mrs. C is not going to insult Mr. C’s legacy.

    Donald on the other hand, as we all agree is a business man, can & should reinstate G-S, Why ?; because in so doing a jobs growth tidal wave would be upon the economy and hide a myriad of his sins. Past-Present-future

    Need proof? Think of the gov. “break-up” of standard oil.

  7. Knobby says:

    Vote for Libertarian Johnson. This is NOT a throw-away.
    If no candidate receives over 50% of the electoral vote, the House votes to select the president from all those candidates receiving over 10% of the electoral vote count. If Johnson gets 10-12 %, then the House will get to choose the next POTUS. They will not select Hillary! They MIGHT select Gary Johnson, since Ryan and McConnel are anti-Trump. I do not know Johnson’s stance on Glass-Steagal reinstatement.

    I likely got a few details wrong in the above.
    Proceed with my public corrective rebuke.

    New campaign slogan:
    Why pick from the Left Nut or the Right Nut, when you can have the Johnson?
    Please pardon the Trump-like humor.

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