Tag Archives: great recession

‘Populist’ Trump chooses Cabinet of billionaires and Wall Street insiders

She supported Trump for his populist vows  to “drain the swamp” in Washington of moneyed elites and Wall Street insiders who crashed the economy, so  when she learned of Trump’s Cabinet pick for Treasury Secretary — Steven Mnuchin — she felt betrayed.

OneWest, a bank formerly owned by a group of investors headed by Mnuchin, had foreclosed on her Los Angeles-area home in the aftermath of the Great Recession, stripping her of the two units she rented as a primary source of income.

“I just wish that I had not voted,” said Colebrook, 59. “I have no faith in our government anymore at all. They all promise you the world at the end of a stick and take it away once they get in.”

Less than a month after his presidential win, Trump’s populist appeal has started to clash with a Cabinet of billionaires and Wall Street elites.

In addition to Mnuchin, Trump has chosen Wlibur L. Ross Jr., a billionaire investor in distressed assets as Secretary of Commerce Department and Chicago Cubs owner and billionaire Todd Ricketts as deputy commerce secretary.

‘Now backing his buddies’

Less than a month after his presidential win, Trump’s populist appeal has started to clash with a Cabinet of billionaires and millionaires that he believes can energize economic growth.

The prospect of Mnuchin leading the Treasury Department drew plaudits from many in the financial sector. A former Goldman Sachs executive who pivoted in the early 2000s to hedge fund management and movie production, he seemed an ideal emissary to Wall Street.

When asked about his credentials to be Treasury secretary, Mnuchin emphasized his time running OneWest — which not only foreclosed on Colebrook but also on thousands of others in the aftermath of the housing crisis caused by subprime mortgages.

“What I’ve really been focused on is being a regional banker for the last eight years,” Mnuchin said. “I know what it takes to make sure that we can make loans to small and midmarket companies and that’s going to be our big focus, making sure we scale back regulation so that we make sure the banks are lending.”

But the prospect of Mnuchin leading the Treasury Department prompted Colebrook and other OneWest borrowers who say they unfairly faced foreclosure to contact The Associated Press. Colebrook wishes she could meet with Trump to explain why she feels betrayed by his Cabinet selection after believing that his presidency could restore the balance of power to everyday people.

“He doesn’t want the truth,” she said. “He’s now backing his buddies.”

The Trump transition team has been sensitive to preserving trust with its voters. Senior adviser Kellyanne Conway publicly warned that supporters would feel “betrayed” if former critic Mitt Romney was named secretary of state, for instance.

Wealth from Great Recession foreclosures

For Mnuchin, the fundamental problem stems from the Great Recession. His investor group was the sole bidder to take control of the troubled bank IndyMac in 2009. The group struck a deal that left the Federal Deposit Insurance Corporation responsible for taking as much as 80 percent of the losses on former IndyMac assets and rebranded the troubled bank as OneWest.

The combination of OneWest’s profitability, government guarantees and foreclosure activities drew the ire of activist groups like the California Reinvestment Coalition. It found the bank to be consistently one of the most difficult to work out loan modifications with even though OneWest never drew a major response from government regulators.

By June of 2014, five years after taking over OneWest, Mnuchin sold the bank for $3.4 billion at a tremendous profit.

Colebrook said she learned the hard way about OneWest’s tactics, after the regional bank acquired her home lender, First Federal Bank of California, in late 2009.

 

Clinton vows to crack down on Wall Street excess

Laying out her agenda to help American workers, Hillary Rodham Clinton said on July 13 that if she is elected to the White House she will seek to build a “growth and fairness economy” that would rejuvenate wages that have remained stagnant since the Great Recession.

In her first major economic speech of her presidential campaign, Clinton vowed to crack down on Wall Street excess and warned that a large field of Republican White House hopefuls would promote tax cuts and a return to policies that would balloon the national debt. She singled out three GOP candidates by name, including former Florida Gov. Jeb Bush, whom she accused of failing to understand the plight of workers.

“You may have heard Gov. Bush say last week that Americans just need to work longer hours. Well, he must not have met very many American workers,” Clinton said at The New School in New York, urging Bush to speak to nurses, truckers or fast food workers. “They don’t need a lecture. They need a raise.”

Bush, during an event in Sioux City, Iowa, said Clinton believed that it didn’t matter that 6.5 million people were only able to work part-time instead of holding full-time jobs. “Hillary Clinton believes that 2 percent growth, apparently the new normal, is acceptable,” Bush said.

He told reporters that Clinton’s “policies are going to suppress wage growth. Her policies are a continuation of the Obama economics which has been a complete disaster.” Republicans note that under President Barack Obama, the workplace participation rate has declined to its lowest level since 1977.

In an agenda-setting address, Clinton sought to appeal to liberal voters within her party who have questioned her willingness to regulate Wall Street and have rallied behind her chief Democratic rival, Vermont Sen. Bernie Sanders. The message also appeared aimed at anxious voters who have seen little gains in their paychecks even as the nation moves past the Great Recession.

“As the shadow of crisis recedes and longer-term challenges come into focus, I believe we have to build a growth and fairness economy,” Clinton said. “You can’t have one without the other.”

Clinton said she would propose more public investment in infrastructure projects, advance renewable energy and promote tax cuts for small business owners. She expressed support for an increase in the federal minimum wage, an overhaul to the tax code, and policy proposals related to child care and paid family leave.

Clinton, who maintained strong ties to Wall Street as a New York senator, pushed back against the industry, saying the largest financial institutions had too often focused on short-term profits instead of helping grow the economy.

She expressed outrage at accounts of money laundering and currency manipulation involving several major financial firms, calling them “shocking,” and promised criminal prosecutions of bad bankers. One of the firms she identified, HSBC, paid former President Bill Clinton $200,000 to speak at a Florida conference in 2011, an appearance that was cleared by the State Department despite an ongoing federal money-laundering probe that led HSBC to reach a 2012 settlement with prosecutors.

The former secretary of state said few rogue traders had faced consequences for malfeasance, a subtle swipe at the Obama administration, which took no action against the individual financial titans who pursued risky fiscal practices. “This is wrong, and on my watch it will change,” she said.

Clinton also vowed to expand the Dodd-Frank law passed by Congress in 2010, which tightened regulation of financial institutions, and said she would bolster government oversight of hedge funds and high-frequency traders.

The speech offered Clinton’s most extensive critique of Bush, a top contender for the GOP nomination.

Clinton said the nation’s economy should not be measured by “some arbitrary growth targets untethered to people’s lives and livelihoods.” That was a veiled reference to Bush, who has said he would set a goal of 4 percent economic growth, including 19 million jobs, if elected president.

She also lobbed criticism at Florida Sen. Marco Rubio and Wisconsin Gov. Scott Walker, who was launching his campaign on July 13. Rubio’s tax proposal is a “budget-busting giveaway to the super-wealthy,” Clinton said, and she called Walker an example of a GOP governor who had made his name “stomping on workers’ rights.”

Rubio spokesman Alex Conant said Clinton wanted to “take us back to yesterday, but we cannot raise taxes like the 1990s or increase spending like the 2000s. Marco is proposing a 21st century tax plan that would benefit all Americans, especially middle-class families.”

Clinton, meanwhile, made no mention of Sanders, who has wooed Democrats by making economic inequality the central plank of his insurgent campaign.

HIV/AIDS agencies brace for budget cuts

Healthcare, social services and mental health treatment providers across Wisconsin are bracing for potentially radical cuts in funding as political leaders in Madison and Washington, D.C., scramble to close budget gaps exacerbated by the Great Recession.

Wisconsin agencies servicing HIV/AIDS patients, caring for LGBT at-risk youth and homeless individuals and delivering mental health and addiction recovery services are poised to be some of the hardest hit.

Republican majorities in the U.S. Congress and the Wisconsin Assembly already proposed and partially passed budget bills that would dramatically reduce the number of Medicare and Medicaid patients, potentially shrink federal healthcare programs and, at the state level, drop hundreds of BadgerCare patients.

HIV/AIDS treatment and prevention programs would suffer an estimated $638,700 cut under Gov. Scott Walker’s budget, passed by the Legislature’s Joint Finance Committee in early February. It is the same bill that has resulted in massive protests statewide for stripping public unions of most of their collective bargaining rights.

At the same time they’re slashing state healthcare funding, Walker and other GOP governors are fighting implementation of the 2010 federal healthcare law, which is designed to provide near-universal healthcare coverage.

Politicians who have supported strong public health funding policy say they have not given up on protecting core services, despite the Republican push to slash public funds and repeal the national healthcare law. At a rally in Madison, U.S. Rep. Tammy Baldwin, D-Madison, said the fight is not over.

“We all know that we have to create budgets that are in balance,” she said. “Democrats understand that. But we have to do it in a smart way that promotes the health, education, and welfare of the people of the United States, and in Wisconsin.”

Leaders in HIV/AIDS services delivery and activism communities are uncharacteristically split on the cuts’ possible impact. They all admit there might be room for compromise with Walker, and they’re cautiously optimistic that proposed cuts can be maintained at the proposed 10 percent in across-the-board reductions.

“There is room for trimming in some administrative costs, and we are hopeful that we will be able to work with the Walker administration to hold the line on cuts and maintain core services,” said Michael Gifford, chief operations officer at AIDS Resource Center of Wisconsin.

Other HIV/AIDS advocates, including Heidi Nass from the UW Health Infectious Diseases Clinic, based at UW Hospitals and Clinics in Madison, said she and other activists in the provider community don’t understand why President Barack Obama and Democrats have not fought harder for the ground gained in the past few years regarding HIV/AIDS funding, considering how scarce resources are currently.

“The thing that is curious to me is the shortsightedness of not investing more in prevention, considering that it is less expensive to prevent disease rather than treat it after the fact,” she said. “We were already behind on this thing before, if you look at the incidence rates and prevention efforts. And with the proposed cuts, I have little hope we can get ahead of it.”

Nass said UW Health is evaluating how to service its caseload of about 800 patients with core medical services and limited case management, while continuing to push for more funding support from state and national leaders.

Karen Dotson, executive director of AIDS Network in Madison, said she is hopeful her 400 clients will see little reduction in core services. But she admits the true impact is not yet known beyond the overall 10 percent cut in funding.

“There are some concerns about how much the Medicare and Medicaid cuts will have on our budgets,” she said.

Like Gifford, Dotson expressed a hopeful tone as to how Walker’s administration will view serving the needs of the poor. Dotson noted that 33 percent of her agency’s budget comes from private donations and grants, not from public funds.

Wisconsin’s State Department of Human Services has yet to weigh in on exactly which cuts will be implemented if the governor’s budget becomes law.