These short posts are part of a series to take stock of changes that may be coming during a Trump Administration.
Wall Street and Main Street
- The 2007-2009 Great Recession was caused by banks gambling with money they did not have because the potential profits were so high. We regular Americans share some of the blame because we did not use our ‘free money’ from the banks very well during the housing bubble and when the bubble burst, we discovered the money wasn’t free after all.
- Banks and major companies were bailed out under the Bush and Obama administrations because both believed that a collapse of the banking sector would lead to a second Great Depression.
- Regulations (Dodd-Frank) were passed to ensure that the big banks would keep more money in reserve so they would be better able to survive another shock to the system and no bank would be considered too big to fail.
- The President has promised to roll back the post-recession banking regulations and has stacked his cabinet with Wall Street insiders, some of whom reaped huge profits from the foreclosure crisis.