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April 8, 2019

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Trump would like to shove his political appointees onto the Board of Governors, middle left.
From the Washington Post: In an effort to “juice the economy” over the last two years, Trump’s federal (de)regulators and Congressional Republicans have undercut policies put in place during the financial crisis and and allowed banks and financial companies to issue more than $1 trillion in risky corporate loans, leading to fears that Trump's Washington and Wall Street are repeating mistakes that will precipitate another crisis.
But those who want to be rich fall into temptation and are trapped by many senseless and harmful desires that plunge people into ruin and destruction. - 1 Timothy 6:9
The new leveraged lending boom, urged on by Trump’s deregulators with industry ties, was to further Trump’s goal of growing the economy faster in the first half of his term. As the Post put it, as regulators stripped away post-crisis financial rules, “bankers began to binge.” Financial companies issued nearly $1.3 trillion in leveraged loans in 2017 and 2018, 40% more than in 2015 and 2016. Leveraged loans are giant loans that banks make to heavily indebted companies. Though the loans may never be repaid, bankers earn large fees up front, then shift the risk by bundling and selling the loans to hedge funds, mutual funds, and insurance companies.

Μore than 80% of the loans made in 2018 were made with fewer restrictions and fewer protections, leading some to note an “eerie parallel” between the subprime mortgage crisis and the leveraged-loan buildup. Regulators now admit they don’t know what the impact on the economy of all this new leveraged debt will be. Bankers believe that since they have offloaded the risk to other entities, they will have the resilience to weather another crisis, but they acknowledge that “Someone’s going to get hurt here.”

Meanwhile, Trump has proposed two of his political supporters, Herman Cain and Stephen Moore, for open seats at the Fed. Both are proponents of stripping back regulations and growing the economy even faster.

It boggles the mind that within a decade of the last financial crisis, and only two years into a new administration, we are back in the world of high-risk lending, yet here we are. As with almost everything this administration does, it is both heartbreaking and maddening. And once again, unbridled greed threatens to plunge people into ruin and destruction.
Given these risks, it’s all the more important that no more foxes guard the henhouse.  Though members of the Federal Reserve Board are appointed by the President, they must be confirmed by the Senate. Only a strong public outcry may give senators pause and lead them to resist Trump’s efforts to politicize the Fed.
Call your Senators today and urge them to oppose both Herman Cain’s and Stephen Moore’s appointments to the Fed.
God, remind our leaders of their responsibility to the people. Open their eyes to the destructive power of greed and give them the courage and conviction to protect the public. Give us strength as we continue to resist relentless harm. Amen.
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