Executive Order on Principles for Regulating the US Financial System | Hacker News Reader

Executive Order on Principles for Regulating the US Financial System

whitehouse.gov

21 pointsrainhacker27 comments

The order was, of course, deliberately vague in its wording. The NYT provides a succinct translation:

President Trump on Friday moved to chisel away at the Obama administration’s legacy on financial reform, announcing a series of steps to revisit the rules enacted after the 2008 financial crisis and setting the stage for a showdown with Democrats over the future of Wall Street regulation.

After a White House meeting with the executives, Mr. Trump signed a directive calling for his administration to identify potential changes to provisions of the Dodd-Frank Act, crafted by the Obama administration and passed by Congress in response to the 2008 meltdown. A second directive he signed will effectively halt an Obama-era Labor Department rule that requires brokers to act in a client’s best interest, rather than seek the highest profits for themselves, when providing retirement advice.

The executive order impacting Dodd-Frank is vague in its wording and broad in its reach; it never mentions the Dodd-Frank law by name, instead laying out “core principles” for regulating the financial system, including empowering American investors and enhancing the competitiveness of American companies. But it amounts to a broad grant of authority to the Treasury Department to find ways of restructuring major provisions of Dodd-Frank, directing the secretary to conduct a sweeping review of existing laws and make sure they align with the administration’s goals.

Mr. Trump’s action on the fiduciary rule will have a more immediate impact. His memorandum directs the Department of Labor to review whether the rule may “adversely affect” investors’ ability to access financial advice — and if it does, he authorized the agency to rescind or revise the rule.

https://www.nytimes.com/2017/02/03/business/dealbook/trump-c...

Where is section (f) ?

That's a damn good question.

Looks very wimpy for such a huge majority controlling both Congress and Executive to use a vague Executive Order to wipe a law (Dodd-Frank) rather than to vote on a repeal.

Perhaps, but this way no one has to go on the record stating that they're in favor of repealing the rule that financial advisors have to act as fiduciaries.

Of course, one would also think that no one would want to go on record voting to repeal a regulation designed to stop miners from dumping their stuff in our water, but apparently one would be wrong.

Or going on record that the mentally ill should be armed.

I honestly don't know how one can explain that sort of thing to his electorate, but clearly one can.

What does the rescission of the Social Security rule against gun ownership have to do with this EO?

It's in the same category of "insane choices voted-in by duly-elected representatives that will somehow still manage to persuade the electorate to vote against their own common sense".

If you just listed the core principles outlined here for anyone I don't see how they could find anything disagreeable. This sounds great, especially points a and b.

Which is exactly the take-away he wants you to have.

It sounds great because there is no administration in the last 50 years that didn't already have those principles. This executive order doesn't say anything.

True for most, but points b and g seem to be much more recent concerns, especially with the billowing national debt.

Preventing future bailouts was a charter goal for the Obama administration, and the reason for the financial industry regulations (fought tooth and nail by the GOP) that this EO is subtextually putting on the chopping block.

Preventing bailouts might have been a charter goal for Obama, but his administration actually made the "too big to fail" institutions larger, and it seems like everyone still believes that the government will provide bailouts whenever the next crisis happens. Those regulations increased (fixed) compliance costs, and improved economies of scale, making it tougher for 'small' banks.

I am not sure if the Trump administration can or will do anything about that.

> subtextually

Translation: there is nothing actually in there about removing those regulations. You (and others, MSM outlets included) are attempting to manufacture outrage.

You can rebut an argument you disagree with without being uncivil. In this case, I agree that the wording of the EO doesn't talk about deregulation. Unfortunately for your argument, Trump has in fact spent the day talking about pruning back Dodd-Frank.

Actually it says quite a lot -- you just have to read between the lines. And consider certain things that he's said on the campaign trail (for example, his pledge to "do a big number" on Dodd-Frank).

Language like "enable American companies to be competitive with foreign firms in domestic and foreign markets" is, in the crowd he runs with, a standard euphemism for "scrap as much oversight and regulation as we can possibly get away with", for example.

I didn't interpret that as him saying he was going to do away with regulations and oversight. I read it as him saying he's going to increase tariffs and punish American companies who outsource and try to move operations oversees.

He may do both.

You meant to say claimed to have those principles. If everyone actually had those principles, the financial crisis would have never happened.

Correct. There are quite a few reasons that both the Bush neocons and the Democrats opposed Trump, and one of those reasons is that Trump attacked the "too big to fail" banks during his campaign.

I think it's a mistake to read this as being entirely favorable to those banks. They are still trying to figure out how to profit off the move away from globalism, and while they are likely to be able to do so, there is no question that their core principles are opposed to those stated here.

Too many indefinite article can be confusing, especially when you're talking about politics and people's/group's interests.

> I think it's a mistake to read this as being entirely favorable to those banks

You're referring to the EO, or the campaign promise?

> They are still trying to figure out how to profit off the move away from globalism

Are you referring to the banks or the interests backing Trump?

> there is no question that their core principles are opposed to those stated here

We're talking about the banks?

Clearly the banks don't like the rhetoric of "too big to fail". If Trump manages to show an effective display of power over the next 100 days, he may have the leverage he wants to do something. Now, I think it's silly for anybody to speculate what that something is because he's been very vague about it. That works for him because it gives him the option to save face with his supported by producing watered-down reform if he's unable to affect truly effective regulatory change.

The question is: What might Trump want from the banks? It's important to enumerate both selfless and self-serving reasons. Does he want something personally, or does he want political support for something he wants to do? What is he willing to negotiate?

Taking on the banks is not an easy feat. I suspect Trump has cozied up with other special interests that will give him the backing to take on the banks, but it will probably cost us our environment and it could very likely lead to more antagonism and campaigns in the Middle East. Some people think he's being dopey when he says, "We should have taken the oil". I suspect he's securing another option that he can call on when he needs something.

What part of repealing the rule that financial advisors have to act in the client's best interest, instead of their own, is "great", exactly?

Where, exactly, is that in this EO?

It isn't anywhere in this EO. It is only in the NYT's reinterpretation of the EO.

That was exactly my point :)

Trump may not do what you think -- Bannon hates the hippies/anarchists from OWS, but also despises the capture of the government by the big banks. Watch his documentary/propaganda piece Generation Zero to get an idea of his thinking: https://www.youtube.com/watch?v=k3SLtP10NQ8

> Trump may not do what you think

That's very vague and open-ended. (He may not, but he may) + (If not, he could do anything) = Everything = Nothing

A talking point in the last few days has been, 'keep an open mind'. After a year and a half of Trump brazenly announcing his plans and several months of him implementing them, I have a pretty good idea of what Trump is. If he wants to change my mind, he'll have to change his actions.

> the capture of the government by the big banks

If Trump wants to avoid this, his approach of appointing Wall Street titans, removing key Wall Street regulations, and doing nothing for consumer protection (AFAIK), seems odd.

Again, rather than speculating, we have plenty of hard evidence. If Trump wants to surprise us, he has every chance to do it.

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