Trump ad­vis­ers back dereg­u­la­tion, pri­va­tiz­ing So­cial Se­cu­rity

Daily Freeman (Kingston, NY) - - FRONT PAGE - By Jeff Hor­witz

WASH­ING­TON >> Dur­ing his tri­umphant pres­i­den­tial cam­paign, Don­ald Trump re­nounced Repub­li­can or­tho­doxy on So­cial Se­cu­rity re­form.

“We’re not go­ing to hurt the peo­ple who have been pay­ing into So­cial Se­cu­rity their whole life,” Trump de­clared, call­ing the pay­ment of promised ben­e­fits “hon­or­ing a deal.”

But the man head­ing the Trump tran­si­tion team’s So­cial Se­cu­rity ef­fort? Michael Kor­bey, a former lob­by­ist who has spent much of his ca­reer ad­vo­cat­ing for cut­ting and pri­va­tiz­ing the pro­gram.

“It’s a failed sys­tem, bro­ken and bank­rupt,” Kor­bey said as a lob­by­ist in the mid 1990s.

Kor­bey ac­knowl­edged that some of the re­forms his group backed would hurt re­tirees, but “our con­stituents aren’t just se­nior cit­i­zens,” he told a news­pa­per in 1996.

A decade later, as a se­nior ad­viser to the So­cial Se­cu­rity Ad­min­is­tra­tion, Kor­bey was a pub­lic ad­vo­cate for the Ge­orge W. Bush ad­min­is­tra­tion’s failed at­tempt to pri­va­tize So­cial Se­cu­rity.

Kor­bey is just one ex­am­ple of ap­par­ent dis­cord be­tween Trump’s pop­ulist eco­nomic plat­form and the peo­ple who have been put in charge of plan­ning to carry it out.

While there are some true Wash­ing­ton out­siders on the team — such as Dan DiMicco, a former steel industry ex­ec­u­tive who is Trump’s tran­si­tion head for the of­fice of U.S. Trade Rep­re­sen­ta­tive — many of the play­ers are fa­mil­iar from the Repub­li­can eco­nomic es­tab­lish­ment.

The mix in­di­cates a strong lean­ing to­ward rolling back much of the Obama ad­min­is­tra­tion’s post-fi­nan­cial col­lapse re­forms, and a gen­eral pos­ture to­ward dereg­u­la­tion.

The team will not nec­es­sar­ily carry over into the Trump ad­min­is­tra­tion — though members of past tran­si­tion teams of­ten have.

In­stead, they are in charge of putting to­gether hir­ing rec­om­men­da­tions, work­ing with out­go­ing ap­pointees and lay­ing the ground­work for ad­min­is­tra­tion’s open­ing months.

Bill Wal­ton, one of the two peo­ple over­see­ing the eco­nomic tran­si­tion ef­fort, is the former chief ex­ec­u­tive for Al­lied Cap­i­tal, a fi­nan­cial firm that was sold af­ter nearly fail­ing dur­ing the fi­nan­cial


He is both a trustee for the Her­itage Foun­da­tion and a se­nior fel­low at an­other con­ser­va­tive or­ga­ni­za­tion, the Dis­cov­ery In­sti­tute.

David Mal­pass, who is over­see­ing both the Trea­sury Depart­ment staffing and part of the broader eco­nomic is­sues port­fo­lio, was Bear Stearns’ chief econ­o­mist in the years lead­ing up to its col­lapse. In Au­gust of 2007, as U.S. eco­nomic growth ground to a halt and the debt mar­kets shud­dered, he wrote a Wall Street Jour­nal op-ed ti­tled “Don’t Panic About the Credit Mar­ket.”

“Hous­ing and debt mar­kets are not that big a part of the U.S. econ­omy, or of job cre­ation,” the piece de­clared, pre­dict­ing con­tin­ued eco­nomic growth and dis­miss­ing con­cerns that re­cent eco­nomic growth had been de­pen­dent on the hous­ing bub­ble.

Eight months later, Bear Stearns col­lapsed, un­able to with­stand the toxic com­bi­na­tion of over­heated home prices and shod­dily as­sem­bled debt that Mal­pass dis­missed. But Mal­pass landed on his feet, found­ing a con­sult­ing firm called Encima Part­ners.

Since then, he’s faulted both the Fed­eral Re­serve’s mon­e­tary re­sponse to the fi­nan­cial cri­sis and reg­u­la­tions in­tended to pre­vent fu­ture such calami­ties.

In a 2010 Na­tional Re­view ar­ti­cle ti­tled “Chris Dodd’s Big, Mis­guided Bill” Mal­pass ar­gued against the value of cre­at­ing the con­sumer fi­nan­cial pro­tec­tion bu­reau, writ­ing that the Obama ad­min­is­tra­tion should “stream­line and con­cen­trate” ex­ist­ing con­sumer pro­tec­tion reg­u­la­tors, a step that he said “would re­sult in a re­duc­tion of gov­ern­ment jobs.”

In Paul Atkins, Trump has found a lead­ing pro­po­nent of the the­ory that gov­ern­ment should get out of the fi­nan­cial industry’s way.

Ap­pointed to the Se­cu­ri­ties and Ex­change com­mis­sion in July 2002 at the height of the era’s cor­po­rate ac­count­ing scan­dals, he was con­sid­ered the most con­ser­va­tive mem­ber of the SEC dur­ing his ten­ure.

Atkins ob­jected to stiff penal­ties im­posed on com­pa­nies for al­legedly fraud­u­lent con­duct, con­tend­ing that they don’t ef­fec­tively de­ter crime.

And in 2005, he de­fended the prac­tice of back­dat­ing stock op­tions — a prac­tice in which ex­ec­u­tives paid themselves for fic­ti­tious out­per­for­mance in their com­pa­nies’ stocks.

Nu­mer­ous ex­ec­u­tives went to jail for those ac­tiv­i­ties — but Atkins caused a stir by say­ing he found noth­ing ob­jec­tion­able about it.

In the years that led up to the fi­nan­cial cri­sis, Atkins warned of dan­gers posed by “en­act­ing reg­u­la­tions that sup­plant the mar­ket’s judg­ment.” Among the ini­tia­tives he suc­cess­fully backed at the SEC was a loos­en­ing of lever­age re­stric­tions on in­vest­ment banks, a step that al­lowed firms like Bear Stearns and Lehman brothers to bor­row more money and in­vest it in mort­gage-backed se­cu­ri­ties.

Atkins re­signed in Au­gust of 2008, and now runs a fi­nan­cial ser­vices industry con­sult­ing firm. But he has main­tained his vig­or­ously pro-mar­ket stance.

“We all know that over­reg­u­la­tion can “kill the goose that laid the golden egg,” he said in a 2012 speech op­pos­ing the reg­u­la­tion of money mar­ket funds.


Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.