We are ten days away from Christmas Eve and all the holiday favorites are showing up on our tubes. Certainly at the top of that list is Jimmy Stewart’s tour de force in, It’s A Wonderful Life. That story happens at Christmas as you recall. But do you recall that it was set in a pre-FDIC world? Oh, yes. That’s why there’s a run on the bank. There’s a critical sum of money missing and that, plus real-life Depression Era fears of banks going under, fuel the plot. Prior to Franklin D. Roosevelt signing the FDIC into law in 1933, if the bank went under so did your savings.
And it looks like Donald Trump and company are happy to return us to that era. The rest of this article is reprinted in full from Common Dreams, under a 3.0 Creative Commons license.
President-elect Donald Trump and his advisers are reportedly considering plans to weaken—or abolish altogether—top bank regulators, including the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency.
The Wall Street Journalreported Thursday that members of Trump’s transition team and the new Elon Musk-led Department of Government Efficiency have asked nominees under consideration to head the FDIC and OCC if the bank watchdogs could be eliminated and have their functions absorbed by the Treasury Department, which is set to be run by a billionaire hedge fund manager and crypto enthusiast.
“Bank executives are optimistic President-elect Donald Trump will ease a host of regulations on capital cushions and consumer protections, as well as scrutiny of consolidation in the industry,” the Journal reported. “But FDIC deposit insurance is considered near sacred. Any move that threatened to undermine even the perception of deposit insurance could quickly ripple through banks and in a crisis might compound customer fears.”
The Trump team’s internal and fluid discussions about the fate of the key bank regulators broadly aligns with Project 2025’s proposal to “merge the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Federal Reserve’s non-monetary supervisory and regulatory functions.”
The FDIC, which is primarily funded by bank insurance premiums, was established during the Great Depression to restore public trust in the nation’s banking system, and the agency played a central role in navigating the 2023 bank failures that threatened a systemic crisis.
Observers warned that gutting the FDIC and OCC could catalyze another economic meltdown.
“The next recession starts here,” tech journalist Jacob Silverman warned in response to the Journal‘s reporting.
Eric Rauchway, a historian of the New Deal, wrote that “even Milton Friedman appreciated the FDIC,” underscoring the extreme nature of the incoming Trump administration’s deregulatory ambitions.
Musk, the world’s wealthiest man, is also pushing for the elimination of the Consumer Financial Protection Bureau, an agency established in the wake of the 2008 financial crisis.
The Journal noted Thursday that “Rep. Andy Barr, a Republican from Kentucky and Trump ally on the House Financial Services Committee, has backed the plan to eliminate or drastically alter the CFPB and said he wants to get rid of what he calls ‘one-size-fits-all’ regulation for banks.”
Barr has received millions of dollars in campaign donations from the financial sector and “introduced many pieces of pro-industry legislation, including significant rollbacks of protections stemming from the 2008 financial crisis,” according to the watchdog group Accountable.US.
The next recession starts here, at bare minimum. And it could make 2008 look like a picnic in the park by comparison. And let’s try not to even think about 1929 and the Great Depression years. Trump and his wealthy robber baron friends could pitch us into an abyss that dark. And don’t think Trump wouldn’t do it. He doesn’t need to stay popular to run again and he doesn’t care about the fortunes of the GOP. He’s been their worst foe, in many ways.
Lindsey Graham predicted that Trump would destroy the party and maybe this is how he’ll do it. But if the rest of us are collateral damage, what comfort will that be?
So this is how he gets the ‘price reductions’ he promised his moron supporters.
Just crash the economy back to 1929, prices for everything will drop because there will be no consumer demand, because no-one will have a job, because all the companies will have gone bust.
Well, not ALL the companies, the ones controlled by his friends will be doing just fine, funded by their fat government contracts, and buying up all those ‘stranded assets’ for pennies in the dollar.
Which was their aim all along.
Whoopee Ti Yi Yo (Git Along Little Dogies) With apologies to the Sons of the Pioneers, I see DoGE as the cow-puncher and the electorate as the dogies, rounded up, branded, tails bobbed off and thrown out on the long trail.
If the felon can find a way to end birthright citizenship, he will abolish the FDIC and just shred the Constitution. Why have it if it’s all a joke to him? He’ll do what he wants and the elected officials and press have enabled him and will not ever stand up and tell the truth. Truth is dead.