Jeff Berger —
Last month, when members of Donald Trump’s business advisory councils—the Strategy & Policy Forum and the Manufacturing Council—started leaving the councils and he finally abandoned them altogether, it reminded me of a theme in my life and in the lives of most Americans. For most of my adult life I have had a love-hate relationship with corporate America and Wall Street. I think other Americans feel the same way.
In 2008-2009, I became very angry towards Wall Street and investment bankers in particular. Suddenly I thought that bankers were worse than lawyers. Barack Obama’s failure to punish the bankers who were responsible for the economic collapse gave rise to the Occupy Wall Street movement on the left and the Tea Party movement on the right. The Occupy Wall Street movement faded away (though it found a temporary home in the Bernie Sanders campaign), while the Tea Party movement merged with the Republican Party. Regulation of Wall Street increased under the Obama administration with the passage of the Wall Street Reform and Consumer Protection Act, also known as the Dodd-Frank Act, passed in 2010. Left-wingers didn’t think the regulations went far enough, while right-wingers felt that the regulations went too far.
Wall Street itself felt that the regulations went too far. And yet, many of the leaders on Wall Street, including the CEOs of the major banks, are Democrats. They have donated a lot of money to the Democratic Party, and President Bill Clinton pandered to them during the 1990s by initiating the deregulation of big banks that led to the collapse in 2008. So the reality is that Wall Street is not really a left versus right issue.
I invest in the stock market. Why do I do this? My investments are an act of self-preservation. I’m afraid that if I don’t invest, I will suffer. I invest in the stock market for the same reasons that I drive a car and travel by plane even though I am an environmentalist.
I watched Wall Street’s behavior during Trump’s campaign for president while everyone thought that Hillary Clinton would win. Wall Street has had a long history with Donald Trump. They knew he was a con artist and a failed businessman who used unseemly (and perhaps illegal) tactics to accumulate his wealth. They knew he was an unstable and ignorant person with extreme views on a variety of issues. Surely they couldn’t be happy with a Trump presidency, or so I thought.
Before the election, the stock market had been going up on expectations of Clinton’s victory, but when Trump won the stock market began to soar. Why? Because Wall Street hates regulation and taxes, and they know that Trump is in favor of deregulation and tax cuts. (Actually, in some of their more salutary moments, they will acknowledge the need for taxes and some regulation.)
Nonetheless, Wall Street continues to have a love-hate relationship with Trump. Why? Wall Street loves immigration; Trump hates it. Wall Street loves globalism; Trump does not. Wall Street is friendly to blacks, women, Jews, and gays—any group who can provide cheap labor. Trump supports racists and white supremacists. Wall Street sees that there is money to be made in clean energy. Trump wants to promote oil and coal extraction, and he doesn’t care if this pollutes the planet.
Until the fiasco of Trump’s remarks following the August 12 incident in Charlottesville, Virginia and the murder of Heather Heyer, Wall Street’s love of deregulation was getting the better of them. But something changed when white supremacists, the Ku Klux Klan, and neo-Nazis descended on Charlottesville and Trump made excuses for them. CEOs on Trump’s advisory council began to resign in droves. Chief economic advisor Gary Cohn, formerly of Goldman Sachs, was standing next to the president when Trump made some of his post-Charlottesville remarks at a press conference. Cohn is Jewish, but it took him two weeks to make public his objections to what the president said. Still, Cohn has not chosen to resign. He wants to stick around to help Congress and the president pass tax cuts for the wealthy. He’d also like to be appointed to chair the Federal Reserve Board when current chair Janet Yellin’s term expires in February of next year. Thus far, Secretary of Treasury Steven Mnuchin, who also is Jewish, has said nothing.
As noted at the outset, I don’t think I’m the only person who has a love-hate relationship with Wall Street. Many of the people who voted for Trump did so not because they were racists, but because they were suffering economically. For reasons that are beyond me, they believed that Trump was a successful businessman who would improve their economic situation. They believed Trump when he said that he would increase jobs.
Trump was elected on a wave of populism that had its roots in the rural anti-intellectual population of America. The cities were thriving. The coastal cities were the greatest beneficiaries of economic globalism and immigration. The most successful state of all was California, which is looking more and more like an Asian colony. But this has been true since the dawn of the Industrial Revolution. Large cities have always been economically stronger than rural communities, and coastal cities have always done better than cities in the interior. This is true not just of the United States but of the entire world.
Nevertheless, it is corporate America—and today it is Silicon Valley—that is providing the technological developments that improve the lives of rural communities. Capitalism works better than communism. But too much economic inequality is the result of capitalism run amok. Capitalism ran amok during the 19th century, and it is doing so again today. That is why Donald Trump was elected.
I am still not a big fan of Wall Street. I wish there was more regulation and I wish taxes were higher. However, I was happy with the way that Wall Street was displeased when Trump pulled out of the Paris Climate Agreement to reduce global warming, and I was happy with the way they reacted to Charlottesville. With a president that has no moral compass, I am glad that corporate America is providing some semblance of one.
Jeff Berger is a tech writer, public speaker, and engineer. He earned Masters degrees in statistics and operations research from the University of California, Berkeley, and was employed by IBM for more than 30 years. He developed an interest in history and economics during the 1990’s and now wonders if he might have chosen the wrong career.