The Associated Press is obsessed with President Trump. It attacks him every day, usually on flimsy grounds and often based on feigned misunderstandings of what Trump says. Today the AP headlines: “Is he for or against regulation? Trump swings in 1 day.”
I would hazard the wild guess that Trump is for some regulations and against others, like just about every other person in the world. But the AP is deliberately obtuse.
So what is the alleged contradiction?
While Republicans in Congress craft a bill to unwind the tighter financial rules that took effect after the 2008 crisis, President Donald Trump is looking in another, seemingly opposite direction: He’s entertaining the idea of restoring the Depression-era firewall between commercial banking and its riskier investment side.
If Congress reinstated such a law, it might lead to the breakup of big banks.
Trump, who also has denounced the Dodd-Frank crisis financial law and promised to dismantle it, swung between those two extremes of restoring bank regulation and deregulating in a short space of time on Monday in two White House settings.
OK, AP reporter Marcy Gordon: try to follow along here.
I don’t know whether restoring something approximating the Glass-Steagall separation between commercial and investment banking is a good idea or not. Some conservatives and some liberals favor it. It would, indeed, result in the breakup of some of America’s largest banks.
Dodd-Frank, on the other hand, is a horrible law that is criticized by nearly everyone who has to deal with it. Dodd-Frank imposes so many onerous (and often pointless) requirements that complying with them costs more money than many small and medium-sized banks earn. The result has been a rapid decline in the number of community banks. This has hurt small businesses, since smaller banks are generally the ones that loan to smaller businesses.
On the other hand, Dodd-Frank has been a huge boon to the largest banks, whose community bank competition has largely been eliminated. The biggest banks have increased their market share since Dodd-Frank was enacted, an entirely predictable result that presumably is what the Democrats intended. It is just one more reason why Democrats are so popular on Wall Street.
So one thing reinstating Glass-Steagall and repealing Dodd-Frank have in common is that both would be bad for the biggest banks.
The AP reporter presumably caught at least a glimmer of this reality, since she reported on Trump’s speech to an audience of community bankers, some of whom wore red baseball caps that said “Make Community Banking Great Again!” That should have been a clue, but the AP nevertheless persisted doggedly with its theme that the president contradicted himself by opposing some regulations, while being open to imposing other, completely different ones.
If that is the best the Associated Press can do, it is just as well that most Americans have given up reading newspapers.