Sunday, June 26, 2016

Hillary vs Trump regarding Wall Street and Brexit

The turmoil in the wake of Brexit particularly with the markets has raised the question of who is better qualified to lead regarding matters of Wall Street, Hillary Clinton or Donald Trump.

I was asked to appear on two shows on Fox News regarding that topic, one on Friday afternoon on the Cavuto show guest hosted by Maria Bartiromo and one Satuday morning on the Cost of Freedom hosted by David Asman.

I want to discuss Brexit in general and what it means for the election and what Hillary and President Obama as well as leaders of other European countries should do but the Wall Street question is an interesting one. Below is the video of my appearance Saturday morning on the Cost of Freedom opposite Mark Serrano.

One of the first things that went through my mind during this discussion is that Trump and his surrogates are trying to have it both ways with Hillary. On the one hand they are trying to extend and capitalize on criticism levied by Sanders and his supporters that Hillary is too close to Wall Street and presumably would favor them too much. At the same time they want to claim she would enact proposals that are bad for Wall Street. That thought was going through my head as I exited the studio and ran into my old friend Jonas Max Ferris who said that very thing to me right after the segment. I hope everyone reading this gets that you can’t have it both ways. I don’t blame Mark Serrano. I think that Trump has a massive problem in general with flip-flopping, contradictory statements and being on both sides of every issue and that sets the tone for the campaign and its surrogates. My last article on the campaign and Trump, “Trump’s Torrent of Flip-Flopping makes Mitt Romney look like Steady Eddie”, noted that several articles have now been written by reporters doing research into Trump’s statements and the amount of contradictory statements Trump puts out there is beyond bizarre to the point of being pathological. This article by Politico, “Donald Trump’s Greatest Contradictions” is perhaps the best catalog of them. Politico’s catalog of Trumps flip flopping and contradictions goes on for 23 pages. It still shocks me and I have read it several times now.

But getting back to the debate I had Saturday morning, as far as Hillary and Wall Street is concerned my position hasn’t changed since early in the Democratic primary and that is that to really do a good job reforming an industry you have to have a deep understanding of that industry. Hillary has cultivated that understanding over the last 16 years, not just by doing paid speeches but by having an ongoing dialogue with various leaders and other folks on Wall Street and the banking industry. The fruits of that effort are many including:

  • .      Hillary’s plan to reform Wall Street was voted best by a large majority of Liberal and Progressive economists. In other words, her plan will do the best job of reigning in the bad practices that led to the mortgage crisis and various other issues we have seen in finance and banking over the last 30-40 years.
  • .      Wall Street and the Banking industry feels comfortable that Hillary will address the problems but not prevent or hinder them from ethically doing their business.

Number two will be dismissed by various folks as unimportant or undesirable, but the Financial Insurance and Real Estate industry is over 20% of the US Economy. If you end up crippling or destroying that industry, you better have a plan for recreating that contribution to the economy and the tens of millions of jobs that come with it.

This is the kind of politics I prefer, engaging the people involved and trying to gain a deep understanding of all the facts surrounding issues so you can most successfully deal with them. Demagoguery against Wall Street and the Banking industry and refusing to talk to leaders of companies in both may be good politics on both sides of the aisle but it doesn’t help you craft good policy to address the problems. Of course, with this belief system of mine there was no question of who I would support in the Democratic primary.

On the other hand, Trump has a lot of problems where Wall Street and the banking industry is concerned. They will never forget how he left investors holding the bag for his four bankruptcies. All told, for investments of billions of dollars, investors got pennies on the dollar for such debacles as the Trump Taj Mahal bankruptcy in the early 90’s. Whenever journalists have gone to Wall Street to assess how Wall Street and Bankers think about Trump, they have found a very small group who like him, like Carl Icahn for instance, and a lot of folks who refuse to do business with him. There apparently is even a pejorative term in the industry for how bad of an investment it is to loan Trump money. It’s called “Donald Risk” as Susan Craig noted in a May 23rd article in the NY Times.

Adding to those kinds of problems is that Wall Street values consistency above almost everything else. Given consistency Wall Street can react to and successfully deal with almost anything. But as you can see from the Politico article I linked above, Trump doesn’t do consistency. He is a wild card and you never know what to expect from him. During the campaign he has at times attacked Wall Street and Hedge funds, and then at times he has tried to paint himself as a big friend of Wall Street. You can bet this hasn’t gone unnoticed by folks on Wall Street and the finance industry.

Regarding Brexit, I think for those of us in the US and in other European countries who support immigration and the acceptance of refugees, Brexit was a wakeup call that we need new short and long term approaches to these kinds of issues.

Before I get into that, I just want to point out that while Trump was out in Scotland on Friday and Saturday cheering Brexit and saying the citizens of the UK were right to “take their country back” (all the while hawking his golf course), in 2013 he said something very different as the Daily Caller noted ( ):

In January 2013, Trump wrote an op-ed in the cyber pages of CNN enthusiastically endorsing the economic benefits of Europe-wide interdependence and calling for nations “to leave borders behind.” 

“The near meltdown we experienced a few years ago made it clear that our economic health depended on dependence on each other to do the right thing,” Trump wrote in 2013. 

“I think we’ve all become aware of the fact that our cultures and economics are intertwined,” Trump said. “Never before has the phrase ‘we’re all in this together’ had more resonance or relevance.” 

Trump also expressed his support for transnational globalism. 

Everywhere you turn you find a striking example of Trump reversing himself. As I noted earlier, Trump’s contradictions and flip-flopping are pathological, but I digress…

In terms of leaders in Europe and the US who are in favor of immigration and accepting refugees, it’s time to step back and reassess.

I think there are a lot of people in Europe and the US that are uncomfortable with immigration and refugees at the levels they are right now. Rather than doing things like dismissing them or calling them Xenophobes or racists, it may be a good time to examine the impacts and come up with concrete facts and new policies with which we can reassure folks who are concerned.  Studies should be conducted in terms of how some of the new immigrants are settling in and assimilating. We’ve all heard the horror stories, some of which are true and some are no doubt exaggerated. So let’s do a study and find out how big the issue really is. Are there parts of cities in Europe that really have defacto Sharia law being enforced? I don’t think so, and the few attempts to investigate indicate that this isn’t true but let’s take each of the specific accusations and debunk them or prove them. How many incidents do we have of new immigrants abusing women or trying to force women to cover up or obey whatever social mores that existed in their host country but not in their adopted one? How different is the overall crime rate of new immigrants and refugees versus the crime rate of the communities in which they are living? What percentage of the unemployment rate in each city and district can be attributed to new immigrants or refugees if any?

Let’s take a rigorous approach to studying the reality of the situation so we can combat the fear mongering by Trump in the US and by folks in Europe like UKIP’s Farage. We should also highlight the benefits of immigration, globalization and EU membership. One of the more stunning facts to come out of Brexit is that the cities and communities that voted to leave the EU are more economically dependent on the EU than those that voted to stay in it. See this graph from Press Association's John Springfield, Philip McCann, Bart Los and Mark Thissen. 

I think these statistics are stunning. They tell me that those of us in favor of things like the EU and globalization aren’t doing the jobs we need to be doing to explain their virtues in terms of each community.

I also mentioned new policies, and let me introduce that by saying there are many good ideas we could come up with including I wonder whether in the US, UK and EU we are doing an adequate job explaining to immigrants what we expect of them as good citizens. I think we should take specific examples of unacceptable cultural norms in other regions of the world and explain to prospective immigrants that those things are not acceptable in their new homes and that attempting to continue them in their new countries will result in deportation and then follow through on that threat if necessary. I think that’s fair. It should be explained to immigrants that things like female circumcision, harassing or assaulting women who aren’t covered up enough in the eyes of certain cultures, discrimination against people of other religions and race, sexual orientation or imposing religious jurisprudence on unwilling recipients and various other things are unacceptable behavior and will get them deported. I’m saying this as someone who is in favor of tolerance, multiculturalism and diversity.  

In short, let’s address the concerns of those who currently have issues with immigration and refugees and globalism with facts and responsible new policies. We have no choice but to try. The Brexit vote shows the consequence of ignoring those concerns is very likely to be exploitation of them by far right demagogues. I'll leave you all with this additional graphic from Lord Ashcroft polls showing what motivated people in the UK to vote for or against Brexit.