How Donald Trump Broke the Banks

Trump and his minions are letting Wall Street run wild. What could possibly go wrong?

Here’s some bad news for anyone who wants a sane and functional banking system. The second Trump administration is hard at work destroying every vestige of financial regulation in the United States. A meticulously built oversight infrastructure is facing an accelerated teardown after years of willful neglect.

It’s hardly news that Donald Trump has made it easier than ever to be a plunderer. This is a Golden Age for white-collar criminals at home and kleptocrats abroad. Moreover, Trump isn’t solely to blame for the sorry state of affairs. Still, it wasn’t always this way. When New Deal–era banking regulations were firmly in place, financial crises were far and few between; when such crises emerged, they were relatively contained. But the steady erosion of financial-sector guardrails since the start of the neoliberal era has coincided with more frequent and explosive meltdowns. Today, the White House is speed-running the obliteration of remaining safeguards, just as AI, crypto, and fossil fuel–related crises threaten to upend the global economy. Buckle up: It’s going to get bumpy.

Let’s begin with some history. In the pre–New Deal United States, financial crashes—brought on by poor bank management or speculative bubbles enabled by overly loose credit—were commonplace. Following the Great Depression, however, the federal government rapidly built up the foundations of our modern finance system.

In the Banking Acts of 1933 (better known as Glass-Steagall) and 1935, the Federal Deposit Insurance Corporation (along with federal deposit insurance itself) was created, commercial and investment banking were firewalled from each other, and the Federal Reserve’s power was centralized in its board of governors to improve nationwide supervision. The 1935 law also created the Federal Open Market Committee, responsible for conducting monetary policy, and strengthened the independence of the Fed. In between, the Securities and Exchange Act created the Securities and Exchange Commission and the National Housing Act created the Federal Savings and Loan Insurance Corporation.

What followed was the longest span in American history of no major financial crashes. Stability was the norm; it wasn’t until the early 1970s that the OPEC-induced oil crisis caused a stock market crash. It wasn’t until the 1980s savings and loan crisis that the U.S. experienced a financial crash originating from within the domestic financial sector. It still took several more years and the confluence of........

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