The Trump White House and the joy of hearing what you want to hear

Donald Trump may be in Rome, but he clearly left an anonymous philosopher running the store. Responding to former CIA Director John Brennan’s testimony before the House Intelligence Committee, someone in the shadowy bowels of Trump central dusted off the Underwood and pounded out a response so disconnected from Brennan’s words, or our Earth, that it’s almost zen.

Ladies and gentlemen, boys and girls we welcome you to … dueling realities.

Earth 1

“I encountered and am aware of information and intelligence that revealed contacts and interactions between Russian officials and U.S. persons involved in the Trump campaign that I was concerned about because of known Russian efforts to suborn such individuals.”

Earth 2

“This morning’s hearings back up what we’ve been saying all along: that despite a year of investigation, there is still no evidence of any Russia-Trump campaign collusion …”

It’s an interesting place, this Trump–Earth. Terth. One where …

“The President never jeopardized intelligence sources.”

No, of course not. Say, how green is that sky! And look at those blue hills.

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DHS extends temporary protective status for Haitian refugees, but for only six months

Department of Homeland Security John Kelly announced a six-month extension of temporary protected status for over 50,000 Haitian refugees who are living in the U.S. and were facing possible deportation once their status ended at the end of July. ”If confirmed, six months with promise to review better than hard stop,” tweeted immigrant rights leader Frank Sharry about the news. But as he and others have noted during the past few weeks, Haiti has yet to recover from devastating natural disasters and a cholera outbreak that has killed thousands, and uprooted tens of thousands of people who have U.S. citizen kids, work and pay taxes, and have built their lives here since the 2010 Haiti earthquake could mean not only misery for them, but have vast reverberations. Mother Jones:

Losing TPS could have ripple effects beyond the Haitians currently in the program. According to a recent report from the Immigrant Legal Resource Center, if Honduras, El Salvador, and Haiti—the three countries with the largest number of TPS recipients—are all removed from the program, the US economy would lose $45.2 billion over the next decade. And it could cost some $3.1 billion to deport all TPS holders from those three countries, according to the report.

“The Haitian program is so important,” says Stephen Legomsky, a USCIS chief counsel during the Obama administration. He points to the money TPS holders regularly send back to family members in Haiti, an economic boost that would be difficult to replace if the program ended. Given current conditions in Haiti, “there would be tremendous human hardship on a huge scale” if thousands of people were to return to the country at once, he says.

It doesn’t seem likely that the Trump administration is considering Haitian contributions to the economy in making its decision.

It doesn’t seem likely that the Trump administration is considering his own words from the 2016 presidential campaign trail, either.

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Daily Kos Radio is LIVE at 9 AM ET!

Monday, again. We made it! We’re still alive!

Of course, that just means we’re in for another week of this mess. Week 18 of The Presidential Apprentice, and a full week of Trumpshambles abroad!

And here’s some good news for those who have been thinking about becoming Kagro in the Morning listeners: Jared Kushner has negotiated a special, discounted rate for you! Just click the link below, and listen in at a new, lower price just for you!

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Week 17 of The Presidential Apprentice closes with Trump jetting off to the Middle East and Europe, carrying the contagion of infantilism, inattention, low energy and dysfunction with him. (Jared & Ivanka are along for the ride, allegedly with special dispensation.) We’re coming to grips with the Comey firing, the appointment of a special counsel, and what it all means. But first, Trump & team are spending their precious time plotting revenge: by accusing Obama of being the real leaker of intel to Russia! Got it? Good. Now, here’s what you need to read, in rough order of complexity, in order to discuss the scope of the investigation(s). In related news, Jason Chaffetz is putting away his subpoena crayons, and Devin Nunes still has his hands in the cookie jar. Speaking of half-assing it in the House, they might end up having to vote on Trumpcare all over again, rendering statements by the White House and Ryan’s office inoperative. Lots of speculation about why Trump’s so loyal to Flynn, lately. But this is the topper! I hope! One last entry for weekend reading: Time’s “Inside Russia’s Social Media War on America.”

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While You Weren’t Looking, Trump Basically Killed Dodd-Frank

WASHINGTON ― As the nation’s capital has been consumed by the frothing chaos of President Donald Trump’s administration — botched Muslim bans, sudden personnel changes and the chief executive’s erratic behavior — a steady current of traditional right-wing orthodoxy is sweeping through the federal government. Whatever happens with Russia or the FBI, this tide is washing away former President Barack Obama’s second-greatest legislative achievement: Wall Street reform. And it’s all happening while you’re paying attention to something else.

Trump campaigned on conflicting promises about big banks. One minute, he was going to stick it to the corrupt financial insiders who had wrecked the middle class. The next, he’d vow to liberate our benevolent princes of capital from crushing regulations Obama had cruelly imposed.

Some of Trump’s populist rhetoric followed him into office. But the actual governing has been pure deregulation. Last week, a council of top regulators quietly met to discuss the future of the Volcker Rule ― the most important structural change Obama established for the financial system. A few days later, a freshly installed Trump official went further, threatening to defang the rule “unilaterally” by “reinterpreting” its entire purpose.

The rule is basically dead, Keefe Bruyette & Woods analyst Brian Gardner wrote in a note to clients Monday: “Examiners can start giving banks the benefit of the doubt regarding compliance with Volcker almost immediately.”

The Volcker Rule was conceived as an update to the Depression-era Glass-Steagall law, which banned traditional banks from engaging in risky, high-stakes securities ventures, which became the domain of investment banks, hedge funds and other firms that didn’t rely on federal support. Until its repeal in the 1990s, Glass-Steagall put an end to many conflicts of interest that had plagued banking during the Roaring Twenties, and prevented government subsidies from flowing into speculative securities schemes, which made it harder for big crazy asset bubbles to accumulate.

Glass-Steagall was as powerful as a sledgehammer, but only slightly more precise. The Volcker Rule tried to draw a finer distinction. Instead of banning banks from the securities business outright, it only barred proprietary trading. Banks were no longer allowed to make reckless bets for their own accounts, but other types of trading to help clients meet legitimate market needs would be permitted. Done right, the Volcker Rule would have been a technocratic improvement on Glass-Steagall, providing all the benefits of its New Deal predecessor without its costs.

It reflected the broader approach Obama and congressional Democrats took with Wall Street reform, treating the financial crisis as a mechanical malfunction best corrected by expert regulators who could write specific rules for nuanced situations. The economic system, they believed, could not be properly repaired with blunt instruments or lines in the sand.

Twenty-first-century banking is indeed a nasty thicket of money and numbers. But the financial crisis was more than a technocratic breakdown. It was an abuse of power. And the 2010 Dodd-Frank law didn’t really try to reshape the political dynamic between Wall Street and Washington. A handful of financial titans retained control over multitrillion-dollar institutions tasked with socially essential functions. They were not prosecuted for fraud, they continued to lobby both Congress and federal agencies with ferocity, and their firms continued to provide lucrative jobs for political operatives from both parties. Against this mountain, Obama set the willpower of individual regulators.

It didn’t work. Consider the Volcker Rule, which ran into trouble almost immediately. “One of the world’s largest banking firms” enlisted the Podesta Group ― a lobbying powerhouse founded by Democratic power brokers John and Tony Podesta ― to water down the rule in Congress. The Podesta Group still boasts about the effort on its website, under “Wins.”

“The client’s desired language on the ‘Volcker Rule’ was passed into law,” reads the page, titled “Challenging Wall Street Reform To Defend Jobs.” The lobbying barrage continued at the regulatory agencies, whose final version of the rule stretched to 300 pages of loopholes, exemptions and special considerations. Bank lobbyists succeeded in delaying the implementation of key elements of Volcker for years. Now the beast is being put out of its misery by Trump appointees with close ties to the financial industry, demonstrating that Wall Street’s political clout remains as strong as ever. Volcker’s destroyers will include former bank lawyer Keith Noreika, along with Treasury Secretary Steve Mnuchin, a Goldman Sachs alum, and Securities and Exchange Commission Chairman Jay Clayton, who served as Goldman’s bailout attorney.

A similar fate will soon follow for the derivatives regulations and other rules written during the Obama years. Even capital requirements, the simplest and last line of defense against bad bank behavior, are under assault following the resignation of Federal Reserve Governor Daniel Tarullo. We will never know if Obama’s tweaks and adjustments would have prevented or ameliorated another financial crisis. Today, big banks are bigger than they were before the crash, and are returning to pre-crash levels of oversight. The potential for financial turmoil under an erratic president is just as strong as the potential for foreign policy dislocation.

The one element of Dodd-Frank that will likely survive the Trump presidency is also the only aspect that seriously restructured the power relationship between government and finance. The new Consumer Financial Protection Bureau is important not because it involves a host of complicated new rules ― stealing from customers was illegal before, during and after the crisis ― but because it changes the way these protections are enforced. Prior to Obama, consumer banking products were regulated by five different agencies that competed with each other for “assessment” fees paid by the banks they regulated. This gave banks political power over their regulators ― an agency that was too tough on consumer protection risked losing its banks, and the funding they brought, to another regulator.

Obama scrapped this regime in favor of a single consumer finance overseer, the CFPB, and charged lifelong consumer advocate Elizabeth Warren with setting up the agency and hiring critical personnel. This established a new power center in Washington capable of challenging not only big banks, but also broken bureaucracy. When Obama’s Education Department turned a blind eye to student loan abuses, the CFPB took action. It has returned over $11 billion in ill-gotten bank gains to customers since its inception.

So the next meltdown probably won’t be caused by consumer fraud. Other than that, we’re pretty screwed.

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