Barney Frank: Donald Trump Will Cause Another Great Recession
Count Barney Frank among those skeptical of Donald Trump’s plans to make America great again.
The retired Massachusetts Congressman railed against the President-Elect’s desire to scrap the banking regulation that bears his name, the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in the wake of the worst financial meltdown in decades.
“Apparently, one aspect of American greatness that Donald Trump seeks to recreate is the Great Recession of 2008,” Frank wrote in a Globe op-ed. “He calls for a complete repeal of all the rules that were adopted to govern the financial industry in response to that crisis, restoring to it the freedom to create unlimited debt throughout the economy, with no requirement that serious attention be given to the ability of the indebted to meet their obligations.”
When not calling into question the legitimacy of the election he won a scant few weeks ago, Trump has vowed to quash existing Dodd-Frank regulation and replace them with vague, yet-to-be outlined policies.
“The Dodd-Frank economy does not work for working people. Bureaucratic red tape and Washington mandates are not the answer,” Trump’s transition site, greatagain.gov, reads. “The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”
If Trump succeeds, Frank wrote, there will be nothing stopping lenders from granting mortgages to borrowers who are unlikely to repay, and investment firms like Goldman Sachs and JP Morgan Chase will be able to trade in volatile derivatives with little oversight.
“I understand why those who believe absolutely in an unregulated market advocate a return to the process that risks repeating 2008,” Frank wrote. “I do not understand how this stance complies with Trump’s promise to vindicate the interests of average working people against those who stand at the top of the economic structure.”