Earlier this month, President Trump signed an executive order for the Treasury Department to review banking regulations implemented after the 2008 financial crisis. He said he wants to “do a big number” on the 2010 Dodd-Frank financial reform act, which he also called “a disaster.”
New York Times bestselling author and financial journalist William Cohan agrees things need to change. In his new book, “Why Wall Street Matters,” Cohan says Washington’s desire to punish Wall Street has gone too far: “Instead of facilitating the recovery of Main Street, Washington’s policies have been thwarting it. ... Enough is enough. The ongoing vilification of Wall Street and the entire financial system has to stop.”
On “CBS This Morning” Tuesday, Cohan described Wall Street as “really a beautiful machine.” “It’s this incredible mechanism by which we are able to afford homes and pickup trucks and wide screen TVs and farm vast swaths of the American landscape. But what happened, unfortunately, is that Congress and regulators started throwing sand into that beautiful machine and that doesn’t help anybody,” he said.
Cohan said he doesn’t “agree with Donald Trump on basically anything,” but he does agree the country is “in a position now to reform regulations on Wall Street, to make it work for the American people better.”
“We need to have a grand bargain with Wall Street where they get relief on regulation but also change their compensation system, which provides the wrong incentives to the people who work there, which are actually antithetical to what the American people want Wall Street to do,” Cohan said.
Cohan, who worked on Wall Street for 17 years and wrote about it for another 13 years, said the aim of his latest book is to help people understand what Wall Street is all about.
“They need to understand that Wall Street is the engine of capitalism. It’s the left ventricle of our system. And it’s not just in the U.S., it’s around the world. It’s the ability to provide capital to people who want it. To start businesses. To grow businesses. To hire more people. To pay them more,” Cohan said.
But the author acknowledged Wall Street has made mistakes, and for the most part, those who abused the system have avoided prosecution.
“That’s one of the biggest mysteries of the financial crisis,” Cohan said, adding that there should have been more prosecution.
“There was a lot of evidence of wrongdoing. And it should have been done. Instead of that happening, though, the regulators and politicians have decided to villainize Wall Street. And that ends up just villainizing the American people, and that’s not right,” Cohan said.