Trump’s Top Economic Adviser Backs Breaking Up the Big Banks

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Gary Cohn. Photo: Qilai Shen/Bloomberg via Getty Images

During his campaign for the White House, Donald Trump came out in favor of several policies that enjoy broad, bipartisan support. He also championed a variety of measures that are supported almost exclusively by Americans who have attended at least one fundraiser for the Koch network.

One might think that a politician as devoid of ideological scruples — and hungry for the public’s affection — as Donald Trump would prioritize the popular parts of his agenda. But one would be wrong.

Trump repeatedly vowed to reduce the price of pharmaceuticals by allowing Medicare to negotiate with drug companies — a proposal backed by 70 percent of Americans and two-thirds of Republicans, according to a recent Stat-Harvard poll.

The president also called for guaranteeing workers paid family leave, an idea that 82 percent of Americans support. And he argued for a 21st-century version of “Glass-Steagall,” the law that forbid banks from engaging in both consumer lending and investment banking, until it was repealed by Bill Clinton in 1999. Reviving Glass-Steagall would require breaking up Wall Street’s major banks — a move that the policy’s supporters argue would keep any one institution from becoming too “big to fail,” while also diluting the finance industry’s influence in D.C. Breaking up the big banks also boasts majority support.

But instead of pushing any of these policies in his first 100 days, Trump opted to open his presidency with an attempt to finance a large tax cut for wealthy investors by throwing millions of people off of Medicaid — a scheme that a full 17 percent of Americans approved of. Now, he’s setting his sights on another large tax cut for wealthy individuals and corporations, despite the overwhelming unpopularity of both proposals.

The White House does occasionally make noises about its popular ideas. Every once in a while, the administration leaks a story about its progress on Ivanka Trump’s paid-leave plan. And on Wednesday night, Bloomberg reported that Trump’s top economic adviser, Gary Cohn, voiced support for Glass-Steagall in a closed-door meeting with the Senate Banking Committee:

Cohn, the ex-Goldman Sachs Group Inc. executive who is now advising President Donald Trump, said he generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans, according to the people, who heard his comments … Cohn’s remarks were prompted by a question from Senator Elizabeth Warren, one of the finance industry’s most relentless critics, said the people who asked not to be named because Cohn’s meeting with Senate Banking Committee members was private.

Bloomberg notes that, while Goldman Sachs certainly does not want to be broken up, it would likely have less trouble adjusting to a new Glass-Steagall law than many of its competitors, including J.P. Morgan, which have much larger consumer-lending operations.

Anyhow, if I were an economic royalist, I wouldn’t be too worried. Republicans are struggling to push through the bills their campaigns were paid to pass; it’s hard to imagine they’ll be able to enact the ones many were paid to defeat.

Trump’s Top Economic Adviser Backs Breaking Up the Big Banks