Trump Is Silencing Government Warning Signals of an Economic Crash

His administration is decimating two vital federal bodies that were created in response to the Great Recession—because that’s what the bankers want.

If the United States economy is headed off a cliff, better that we receive no warning in advance. That may not be the stated goal of the Trump administration, but, to borrow a term from the late MIT economist Paul Samuelson, that’s its “revealed preference.” The preference in this case is revealed by Russell “Project 2025” Vought’s determined efforts, as director of the White House budget office, to shut down two agencies created by the 2010 Dodd-Frank Financial Reform and Consumer Protection Act.

Dodd-Frank was Congress’s attempt to head off another catastrophe like the 2008 financial crisis. It was the first major financial overhaul since the Great Depression, and despite commentators’ general feeling that it never went far enough, bankers hated it. Now those same bankers want President Trump to gut two significant parts of it, and he’s obliging—at the very moment that the economy is teetering like a spring breaker at Panama City Beach.

The first of the two offending agencies is the Treasury Department’s Office of Financial Research, or OFR. This is a small office—it’s never employed much more than 200 people—dedicated to furnishing policymakers with the kind of detailed information they lacked during the late aughts about mostly-unregulated “shadow banks” such as mortgage companies, private equity, private credit, hedge funds, and the repurchase agreement market, or “repo.” This last provides overnight short-term loans to manage corporate cashflow. The Washington Monthly has called OFR “The Most Important Agency You’ve Never Heard Of.” Here’s a detailed summary of OFR’s accomplishments.

Every year OFR sends an annual report to Congress that’s written in a typically cheerful tone that downplays financial risks. Still, the necessary information is there if you look for it. The latest report, covering the fiscal year that ended on September 30, noted that student loan defaults rose to 9 percent; that, at a time when private credit is stumbling, about 7........

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