Fed chief has it right. And Trump should remember who he ran against.
HOW FLEETING MEMORIES seem to be, especially among short-attention-span modern Americans.
Less than 10 years ago, in the latter months of 2008, the house of cards several big Wall Street banks had built came tumbling down and nearly crashed the entire world economy. When George W. Bush handed over the White House to Barack Obama in January 2009 the U.S. economy was dumping about half a million jobs each month. There was real fear a second Great Depression was coming.
In its usual fashion, Congress tried to shut the barn door after the horse had run off. A series of new regulations were put in place to prevent the big banks from engaging in the most risky practices in order to protect against a repeat of what happened in 2008. It was clear part of the trade-off was acquiescence to regulations by the banks in exchange for no one going to prison for wrecking the economy.
SO, FAST FORWARD to the current economic and political climate. It has been slow growth - but growth nevertheless - for several years as the economy climbed out of that post-2008 black hole. Unemployment is low. The stock market is at all-time highs. Lots of big U.S. companies report record profits.
And the banks, chafing at being limited from engaging in riskier trading, want the Trump Administration to roll back those regulations.
But, wait. Surely that won't happen. After all, candidate Donald Trump railed against the Wall Street banks. He went so far as to accuse Hillary Clinton of being the bought-and-paid-for property of the Goldman Sachs crowd. He said the small savers and investors of America could trust him not to play footsy with the guys who wrecked the economy in 2008.
That was then. This is now: Trump packed positions related to the economy in his administration with Wall Street guys, notably several veterans of the Goldman Sachs revolving door with Washington. Now the administration sings a different tune. Regulations are a mistake. The big bankers need to be liberated so they can drive the economy to new heights.
"THE EVIDENCE SHOWS that reforms since the crisis have made the financial system substantially safer," Federal Reserve Chair Janet Yellen said in prepared remarks delivered last week. The tighter standards, Yellen made clear, should stay in place to protect the economy and the everyday Americans who were fleeced in 2008 and didn't get Washington's tax-funded bailouts like the big bankers did.
Pay heed to Yellen now, because she probably won't be around long.
Her term of office is approaching its end and reappointment by Trump becomes more unlikely every time she contradicts him.
Nevertheless, we're pretty sure most Americans - scared almost senseless by the economic freefall of 2008 and 2009 - would like to keep those buccaneer bankers on some kind of leash. Millions of real people were deeply damaged by practices that nearly toppled the world's economy.
Despite that old movie line, greed is not good - at least not unbridled, uncontrolled greed. The rest of us have an interest in keeping some restrictions on risky practices.
A FINAL THOUGHT: For common folks who lost much when the economy plunged, the fact those responsible didn't go to jail - they got federal bailouts instead - put salt in the wound. So here's a thought. If Congress does roll back reforms, make this a prerequisite: A clause requiring jail time for the hustlers if they do it to us all over again.