Trump Presidency Could Offer Opportunity to World’s Autocrats
By ROD NORDLAND
FEBRUARY 1, 2017
BEIRUT, Lebanon — Kim Jong-unmight seem an unlikely player in the global jockeying to get on the new American president’s good side, given the North Korean leader’s implied threats as recently as New Year’s Day to launch nuclear missiles at the United States.
But Mr. Kim apparently sees in President Trump “a good opportunity for him to open a kind of compromise with the new American administration,” North Korea’s highest-ranking defector, Thae Yong-ho, said in an interview with CNN last week.
The bromance between President Vladimir V. Putin of Russia and Mr. Trump is the most prominent example of a trend that has swept the world, instilling new hope for a strongman-friendly America in countries like the Philippines, Turkey or Egypt, and among nationalists in many other places who hope to follow in Mr. Trump’s footsteps and gain political power.
Many appear to see a Trump presidency as an opportunity to engage with a like-minded leader who has stated nationalist aims. Others may hope for respite from criticism over their human rights records or authoritarian tendencies. Some, like Mr. Kim and Mr. Putin, might see an opportunity to further their national aims in a new geopolitical order.
The historian Timothy Garton Ash, writing in The Guardian, called the Trump presidency “a new era of nationalism” in which “the nationalists are giving one another the Trumpian thumbs-up across the seas.”
The Philippine president, Rodrigo Duterte, who called former President Barack Obama a “son of a whore” for the Obama administration’s criticism of an officially sanctioned assassination campaign against drug dealers in the Philippines, was quick to congratulateMr. Trump on his election victory. The Philippine president said last week that Mr. Trump had sent him a message of support.
Mr. Duterte, who has threatened to break off relations with the United States, a longtime ally, and turn to China instead, made the announcement during an appearance at the Miss Universe pageant in Manila. (Like Mr. Trump, who owned Miss Universe until 2015, Mr. Duterte has long reveled in appearing in public with beauty queens.)
Mr. Duterte appeared unfazed by Mr. Trump’s order last week blocking refugees from the United States and curtailing immigration from some mainly Muslim countries, saying on Sunday that “I will not lift a finger” to help Filipinos facing deportation from the United States, according to The Philippine Daily Inquirer.
Even those who were contemptuous of Mr. Trump when he was a reality show star considered a long-shot to win the presidency have changed their tune.
In June, after Mr. Trump said he would bar Muslims from entering the United States, President Recep Tayyip Erdogan of Turkey demanded that Mr. Trump’s name be removed from Trump Towers Istanbul. Mr. Erdogan, an Islamist, has arrested or fired 100,000 opponents and jailed 40,000 more after an unsuccessful military coup last summer.
After Mr. Trump’s election, Mr. Erdogan shifted his stance. “I believe we will reach a consensus with Mr. Trump, particularly on regional issues,” Mr. Erdogan said this month during a meeting with Turkish diplomats. Some cracks appeared to show after Mr. Trump’s immigration order Friday: Mr. Erdogan called the move “frankly disturbing.” But he said he would still meet with Mr. Trump at an unspecified date and raise the issue then.
And the name of Trump Towers remains unchanged.
In Egypt, President Abdel Fattah el-Sisi, who has smarted from American criticism about the country’s human rights record and about the military coup that brought him to power, appears to be welcoming Mr. Trump’s leadership. In December, after a phone call from Mr. Trump, Mr. Sisi agreed to delay a vote in the United Nations Security Council on Israeli settlements.
Mr. Sisi’s silence in the face of the executive order on refugees was conspicuous, despite widespread sentiment in the region that it was anti-Muslim.
In Kazakhstan, the country’s “president for life,” Nursultan A. Nazarbayev, whose poor human rights record is well documented, said Mr. Trump had called him in December and complimented him on the “miracle” he had wrought in his country over its 25 years of independence. Mr. Trump was apparently not referring to Mr. Nazarbayev’s 2015 re-election, which the Kazakh leader won with 97.7 percent of the vote.
Mr. Trump has also been lauded by nationalists in Europe, where his anti-immigration messages resonate on a continent that has been swamped with refugees from wars in countries like Syria and with economic migrants. Hungary’s prime minister, Viktor Orban, has welcomed Mr. Trump’s victory, as have far-right leaders such as Marine Le Pen in France.
Some of the enthusiasm by authoritarian leaders for Mr. Trump’s presidency seems to be linked to his stated inclination to overturn the world order. That may include rethinking alliances like the North Atlantic Treaty Organization or tackling long-running issues such as North Korea and its nuclear arms program — now overseen by Mr. Kim.
In reality, Mr. Kim is still a long way from becoming a friend of Mr. Trump, despite the assertions last week by Mr. Thae, the North Korean defector.
Mr. Kim’s anti-American statements have been belligerent even after the election of Mr. Trump, who responded to a supposed North Korean missile threat by posting on Twitter, “It won’t happen!” That led Jeffrey Lewis, a nonproliferation expert, to worry in the magazine Foreign Policy that “Donald Trump is already tweeting us into war with North Korea.”
However, Mr. Trump did suggest last year that if he were elected he might meet with Mr. Kim. The offer left the foreign policy establishment shuddering at what many would see as a serious breach of protocol, essentially acknowledging the leader of a state that the United States does not recognize.
“I would speak to him. I would have no problem speaking to him,” Mr. Trump said during an interview with Reuters in May.
The North Korean and American leaders may find other common ground. When Mr. Trump signed an executive order declaring Jan. 20, his inauguration day, as a “National Day of Patriotic Devotion,” social media feeds lit up withcomparisons to declarations from North Korea’s regime of similarly named occasions.
For leaders like Mr. Erdogan and Mr. Sisi, the Trump presidency could provide a respite from criticism of their increasingly repressive governments, and it might even validate their tactics.
Like other authoritarian leaders, Mr. Erdogan has been a firm ally of the United States and a prickly critic of it. Turkey hosts American military bases and is a member of NATO. But many of Mr. Erdogan’s supporters blamed the United States for the attempted military coup, and Mr. Erdogan has chafed under human rights criticism from Washington of its crackdown on opponents and the news media.
Turkish officials have said they are hopeful that the American military will end its cooperation with Kurdish fighters in eastern Turkey. The Pentagon considers the Kurds to be valuable allies, while the Turks see them as terrorist supporters of Kurdish PKK rebels inside Turkey.
Turkey has reason to be hopeful. Mr. Trump’s national security adviser, Michael T. Flynn, published comments on Election Day calling for stronger support for the Turkish government. Mr. Flynn’s consulting company, Flynn Intel Group, had a contract at the time with a Turkish business association loosely affiliated with the Erdogan government.
Mr. Erdogan, who has jailed more journalists than any other leader in the past year, was almost gleeful after Mr. Trump shouted down the CNN reporterJim Acosta at a news conference in January, responding to CNN and BuzzFeed reports on intelligence briefings regarding unsubstantiated allegations of Russian efforts to blackmail Mr. Trump.
“Those who carried out that game back then in Turkey have done him wrong again during the news conference,” Mr. Erdogan said after the event, referring to CNN. “And Mr. Trump put the reporter of that group in his place.”
Even with all the friendly words, it is unclear whether Mr. Trump and thin-skinned leaders like Mr. Erdogan and Mr. Duterte will be able to maintain their warm relationships.
In Manila, for example, Mr. Duterte’s appreciation of Mr. Trump’s support was qualified. He said he sent a reply to Mr. Trump, via Miss Universe organizers, complaining about his apparent exclusion from Mr. Trump’s inauguration. “I said tell him, ‘Friend, I didn’t go to the inauguration because I wasn’t invited.’”
New York Times
Friday, February 3, 2017
Donald Trump Plans to Undo Dodd-Frank Law, Fiduciary Rule - Wall Street Journal
Donald Trump Plans to Undo Dodd-Frank Law, Fiduciary Rule
MICHAEL C. BENDER and DAMIAN PALETTA
Feb. 3, 2017 1:00 a.m. ET
WASHINGTON—President Donald Trump on Friday plans to sign an executive action to scale back the 2010 Dodd-Frank financial-overhaul law, in a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis.
Mr. Trump also plans another executive action aimed at rolling back a controversial regulation scheduled to take effect in April that critics have said would upend the retirement-account advisory business.
“Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year,” White House National Economic Council Director Gary Cohn said in an interview with The Wall Street Journal. “The banks are going to be able to price product more efficiently and more effectively to consumers.”
Mr. Trump will use a memorandum to ask the labor secretary to consider rescinding a rule set to go into effect in April that orders retirement advisers, overseeing about $3 trillion in assets, to act in the best interest of their clients, Mr. Cohn said in the White House interview. He said the rule limits consumer choice.
Mr. Trump also will sign an executive order that directs the Treasury secretary and financial regulators to come up with a plan to revise rules the Dodd-Frank law put in place.
Mr. Cohn said the actions are intended to pave the way for additional orders that would affect the postcrisis Financial Stability Oversight Council, the mechanism for winding down a giant faltering financial company, and the way the government supervises big financial firms that aren’t traditional banks, often referred to as systemically important financial institutions.
“This is a table setter for a bunch of stuff that is coming,” he said.
The changes Mr. Cohn described are sure to face a fight from consumer groups and Democrats, who say postcrisis regulations are protecting average borrowers and investors from abusive practices, while making the financial system more resilient and bailouts less likely.
This path also may create political problems for Mr. Trump, whose populist campaign was successful in swaths of the Midwest where homeowners were hit hardest by the housing crash sparked by the financial crisis.
Mr. Trump blamed the political establishment and Wall Street banks for leaving behind many Americans and vowed to break up both. Those promises have already been called into question as he has filled his administration with members of Congress and Wall Street executives, including Mr. Cohn, who retired as president of Goldman Sachs GroupInc. to join the Trump administration.
Adding to the potentially difficult optics for Mr. Trump, he will sign the actions on the same day he meets with a group of business executives, including J.P. Morgan Chase & Co. Chief Executive James Dimon and BlackRock Inc. CEO Laurence Fink.
Asked about the potential political pushback because of his Wall Street past, Mr. Cohn said the administration’s goal of deregulating financial markets “has nothing to do with Goldman Sachs.”
“It has nothing to do with J.P. Morgan,” he said. “It has nothing to do with Citigroup. It has nothing to do with Bank of America. It has to do with being a player in a global market where we should, could and will have a dominant position as long as we don’t regulate ourselves out of that.”
Mr. Cohn said existing regulations put in place by Dodd-Frank are so sweeping that it is too hard for banks to lend, and consumers’ choice of financial products is too limited.
Democrats and consumer groups have pushed for tighter controls on banks and other lenders, particularly after the subprime mortgage crisis that helped fuel the global financial crisis.
But Mr. Cohn said that many of the postcrisis rules haven’t solved the problems they were supposed to be addressing. He said, for example, that there still isn’t a solid process to safely wind down the collapse of a giant faltering financial company or to ensure that those firms have access to short-term liquidity.
“I’m not sitting here saying we want to go back to the good old days,” Mr. Cohn said.
“We have the best, most highly capitalized banks in the world, and we should use that to our competitive advantage,” he added. “But on the flip side, we also have the most highly regulated, overburdened banks in the world.”
Mr. Cohn laid out a road map for how the Trump administration plans to target new financial rules. He said the Treasury Department would lead an effort to overhaul mortgage-finance giants Fannie Mae and Freddie Mac, which were put into government conservatorship after the crisis.
He also said that the White House wouldn’t need a change in the law to redirect the mission of the Consumer Financial Protection Bureau, created by the 2010 law and which governs things like mortgage and credit-card rules.
He suggested the White House could influence the mission of the bureau, set up as an independent agency, by putting a new person at its helm to replace Richard Cordray, the agency’s director.
Asked about potential changes at the agency, he said, “Personnel is policy.”
Mr. Cordray has declined to say what he might do if Mr. Trump attempts to remove him. He told The Wall Street Journal in January the arrival of the Trump administration “shouldn’t change the job at all.”
Mr. Cohn has emerged as one of the top economic and strategic thinkers within the White House, as the Senate hasn’t yet confirmed Mr. Trump’s pick for Treasury secretary, Steven Mnuchin, and the Trump administration also hasn’t named any members of the Council of Economic Advisers.
Mr. Cohn did say, though, that a Federal Reserve post, the vice chairman of supervision, is “a very important job to be filled.” This slot was created by the Dodd-Frank law but has been left vacant.
On the fiduciary rule change, the Friday memorandum will ask the Labor Department to revise or rescind the rule.
Mr. Trump has nominated Andrew Puzder to run the department, but he hasn’t been confirmed by the Senate.
Asked if the rule would be eliminated, Mr. Cohn nodded his head. “It’s a bad rule for consumers,” he said.
The fiduciary rule, unveiled last spring and set to go into effect in April, would restrict how brokers can provide retirement advice by forcing them to work in the best interest of their clients and generally avoid conflicts, which can come about with commission-based compensation. It stands to affect about $3 trillion of retirement assets in the U.S., according to research firm Morningstar Inc.
Mr. Cohn said to comply with the rule, companies would be forced to offer retirement products with the lowest fees even if it isn’t best for their client.
Mr. Trump said repeatedly during the presidential campaign that the Dodd-Frank overhaul law was preventing banks from lending, which he said made it harder for consumers to access credit and get the economy to grow. Financial analysts have had mixed views on this assessment.
Some believe that low demand from consumers has hurt the ability of banks to lend, and low interest rates have hurt the returns banks make on these loans. But smaller banks have said they are dealing with a crush of new regulations spurred by Dodd-Frank, something regulators have struggled to address.
Mr. Cohn didn’t specify how all of these regulations should be rewritten, but he said that financial markets have made their own corrections and that the environment that fueled the financial crisis no longer existed. He said, for example, that even if mortgage restrictions are rolled back, it doesn’t mean that there would be another boom in the subprime lending market. That is because, he said, those loans can’t be securitized and sold like they were before the financial crisis because the market for those products isn’t the same.
“We don’t want to do it an unregulated way,” he said. “We want to do it in a smart, regulated way.”
—Ryan Tracy and Lisa Beilfuss contributed to this article
Write to Michael C. Bender at Mike.Bender@wsj.com and Damian Paletta at damian.paletta@wsj.com
Wall Street Journal
MICHAEL C. BENDER and DAMIAN PALETTA
Feb. 3, 2017 1:00 a.m. ET
WASHINGTON—President Donald Trump on Friday plans to sign an executive action to scale back the 2010 Dodd-Frank financial-overhaul law, in a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis.
Mr. Trump also plans another executive action aimed at rolling back a controversial regulation scheduled to take effect in April that critics have said would upend the retirement-account advisory business.
“Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year,” White House National Economic Council Director Gary Cohn said in an interview with The Wall Street Journal. “The banks are going to be able to price product more efficiently and more effectively to consumers.”
Mr. Trump will use a memorandum to ask the labor secretary to consider rescinding a rule set to go into effect in April that orders retirement advisers, overseeing about $3 trillion in assets, to act in the best interest of their clients, Mr. Cohn said in the White House interview. He said the rule limits consumer choice.
Mr. Trump also will sign an executive order that directs the Treasury secretary and financial regulators to come up with a plan to revise rules the Dodd-Frank law put in place.
Mr. Cohn said the actions are intended to pave the way for additional orders that would affect the postcrisis Financial Stability Oversight Council, the mechanism for winding down a giant faltering financial company, and the way the government supervises big financial firms that aren’t traditional banks, often referred to as systemically important financial institutions.
“This is a table setter for a bunch of stuff that is coming,” he said.
The changes Mr. Cohn described are sure to face a fight from consumer groups and Democrats, who say postcrisis regulations are protecting average borrowers and investors from abusive practices, while making the financial system more resilient and bailouts less likely.
This path also may create political problems for Mr. Trump, whose populist campaign was successful in swaths of the Midwest where homeowners were hit hardest by the housing crash sparked by the financial crisis.
Mr. Trump blamed the political establishment and Wall Street banks for leaving behind many Americans and vowed to break up both. Those promises have already been called into question as he has filled his administration with members of Congress and Wall Street executives, including Mr. Cohn, who retired as president of Goldman Sachs GroupInc. to join the Trump administration.
Adding to the potentially difficult optics for Mr. Trump, he will sign the actions on the same day he meets with a group of business executives, including J.P. Morgan Chase & Co. Chief Executive James Dimon and BlackRock Inc. CEO Laurence Fink.
Asked about the potential political pushback because of his Wall Street past, Mr. Cohn said the administration’s goal of deregulating financial markets “has nothing to do with Goldman Sachs.”
“It has nothing to do with J.P. Morgan,” he said. “It has nothing to do with Citigroup. It has nothing to do with Bank of America. It has to do with being a player in a global market where we should, could and will have a dominant position as long as we don’t regulate ourselves out of that.”
Mr. Cohn said existing regulations put in place by Dodd-Frank are so sweeping that it is too hard for banks to lend, and consumers’ choice of financial products is too limited.
Democrats and consumer groups have pushed for tighter controls on banks and other lenders, particularly after the subprime mortgage crisis that helped fuel the global financial crisis.
But Mr. Cohn said that many of the postcrisis rules haven’t solved the problems they were supposed to be addressing. He said, for example, that there still isn’t a solid process to safely wind down the collapse of a giant faltering financial company or to ensure that those firms have access to short-term liquidity.
“I’m not sitting here saying we want to go back to the good old days,” Mr. Cohn said.
“We have the best, most highly capitalized banks in the world, and we should use that to our competitive advantage,” he added. “But on the flip side, we also have the most highly regulated, overburdened banks in the world.”
Mr. Cohn laid out a road map for how the Trump administration plans to target new financial rules. He said the Treasury Department would lead an effort to overhaul mortgage-finance giants Fannie Mae and Freddie Mac, which were put into government conservatorship after the crisis.
He also said that the White House wouldn’t need a change in the law to redirect the mission of the Consumer Financial Protection Bureau, created by the 2010 law and which governs things like mortgage and credit-card rules.
He suggested the White House could influence the mission of the bureau, set up as an independent agency, by putting a new person at its helm to replace Richard Cordray, the agency’s director.
Asked about potential changes at the agency, he said, “Personnel is policy.”
Mr. Cordray has declined to say what he might do if Mr. Trump attempts to remove him. He told The Wall Street Journal in January the arrival of the Trump administration “shouldn’t change the job at all.”
Mr. Cohn has emerged as one of the top economic and strategic thinkers within the White House, as the Senate hasn’t yet confirmed Mr. Trump’s pick for Treasury secretary, Steven Mnuchin, and the Trump administration also hasn’t named any members of the Council of Economic Advisers.
Mr. Cohn did say, though, that a Federal Reserve post, the vice chairman of supervision, is “a very important job to be filled.” This slot was created by the Dodd-Frank law but has been left vacant.
On the fiduciary rule change, the Friday memorandum will ask the Labor Department to revise or rescind the rule.
Mr. Trump has nominated Andrew Puzder to run the department, but he hasn’t been confirmed by the Senate.
Asked if the rule would be eliminated, Mr. Cohn nodded his head. “It’s a bad rule for consumers,” he said.
The fiduciary rule, unveiled last spring and set to go into effect in April, would restrict how brokers can provide retirement advice by forcing them to work in the best interest of their clients and generally avoid conflicts, which can come about with commission-based compensation. It stands to affect about $3 trillion of retirement assets in the U.S., according to research firm Morningstar Inc.
Mr. Cohn said to comply with the rule, companies would be forced to offer retirement products with the lowest fees even if it isn’t best for their client.
Mr. Trump said repeatedly during the presidential campaign that the Dodd-Frank overhaul law was preventing banks from lending, which he said made it harder for consumers to access credit and get the economy to grow. Financial analysts have had mixed views on this assessment.
Some believe that low demand from consumers has hurt the ability of banks to lend, and low interest rates have hurt the returns banks make on these loans. But smaller banks have said they are dealing with a crush of new regulations spurred by Dodd-Frank, something regulators have struggled to address.
Mr. Cohn didn’t specify how all of these regulations should be rewritten, but he said that financial markets have made their own corrections and that the environment that fueled the financial crisis no longer existed. He said, for example, that even if mortgage restrictions are rolled back, it doesn’t mean that there would be another boom in the subprime lending market. That is because, he said, those loans can’t be securitized and sold like they were before the financial crisis because the market for those products isn’t the same.
“We don’t want to do it an unregulated way,” he said. “We want to do it in a smart, regulated way.”
—Ryan Tracy and Lisa Beilfuss contributed to this article
Write to Michael C. Bender at Mike.Bender@wsj.com and Damian Paletta at damian.paletta@wsj.com
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