Brace for bank failures with no FDIC
Yes that’s a good idea, let’s eliminate the FDIC and all other protections from banking.
U.S. President-elect Donald Trump’s transition team is exploring ways to significantly reduce, merge, or even eliminate the top bank regulators in Washington, the Wall Street Journal reported on Thursday citing people familiar with the matter.
Trump advisers and officials from the newly established Department of Government Efficiency (DOGE) inquired about the possibility of abolishing the Federal Deposit Insurance Corp (FDIC), according to the newspaper.
Good good good so banks can lose all our money and we have no recourse. Fabulous plan.
Advisers have asked the nominees under consideration for the FDIC, as well as the Office of the Comptroller of the Currency, if deposit insurance could be absorbed into the Treasury Department, the Journal said, adding that any proposal to eliminate the FDIC or any agency would require congressional action.
And Congress is in Trump’s pocket so the action will be prompt and obedient.
Trump & Co. sure are eager to take the United States back to the ninteenth century. Rampant epidemic disease, industrial accidents, unsafe products, unrestrained capitalism, etc. I guess they’re trying to beat China in the race to the bottom. “Don’t leave your factories in China where they have low wages, low workplace safety standards, and poor environmental regulations; bring them back to the US, where we’ll match and then better the Chinese in low pay and laxity of safety rules!” What’s next, child labour and slavery?
Even though stuff is being handed over to them willingly, do we get to call them “Robber Barons?”
Trump might find room amongst the colouring books on his bookshelf for a copy of Galbraith’s The Great Crash 1929. Many wishing to get in to the market while it is rising, and similarly to get out when it might be at the start of a free fall.
‘Round she goes, and where she stops, nobody knows!’ Least of all POTUS Trump.
Also: The Great Crash, 1929 is a book written by John Kenneth Galbraith and published in 1955. It is an economic history of the lead-up to the Wall Street Crash of 1929. The book argues that the 1929 stock market crash was precipitated by rampant speculation in the stock market, that the common denominator of all speculative episodes is the belief of participants that they can become rich without work and that the tendency towards recurrent speculative orgy serves no useful purpose, but rather is deeply damaging to an economy. It was Galbraith’s belief that a good knowledge of what happened in 1929 was the best safeguard against its recurrence.
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https://en.wikipedia.org/wiki/The_Great_Crash,_1929
The week after the election, I took a day off from work and my wife and I drove up to Canada (6 hours!), opened an account at a ScotiaBank, and put some money in it. We had to explain ourselves three times: to Canadian customs on entry, to the bank officer when we opened the account, and to American customs on return. We told them the truth: we are worried that there could be some kind of financial crisis or disruption in the United States, and we want to have a bank account that is outside the country.
The problem is that ultimately money isn’t savings. What savings really is is a set of reciprocal obligations between people: I help some people now; other people will help me later. Money is just how we keep track of those obligations.
Trump & co want to smash the whole system. They want to abrogate those obligations at a societal level and then crash the banks so that they can hoover up cash from the wreckage. If they succeed, having money outside the system won’t help: a U.S. crash will take down the rest of the world with it, and there is no other economy big enough to honor those obligations.
Trouble is, Omar, I’m pretty sure that never came out in comic book format.
All the Trumpie tech bros like Musk and Thiel hate deposit insurance, because it is a competitive advantage that regulated banks have over their crypto and fintech ventures. Never mind that it is a regulatory structure that evolved in the face of a financial collapse which drove the worst decline in real incomes in the history of industrial capitalism.
iknklast: As a comic book fan, I assure you, Trump couldn’t understand one of those if he read it, either, and I doubt he would. We need a Dick & Jane version for him, at most.
Naif: Oooh, I hadn’t considered the crypto angle. You’re likely right that that’s the primary impetus in Trump’s circle. That said, I think for Trump, it’s simply that, like a lot of the 1%, he doesn’t really NEED banks to keep his wealth–it’s invested in other assets, and he doesn’t fully comprehend how badly a crash would hurt those assets.