It is a story oft-repeated and, at first, quite moving. It is the story of Marty Bannon, father of the White House chief strategist, Stephen K. Bannon, and how he lost much of his nest egg when the financial system cratered in 2008. He had worked for AT&T for 50 years, buying the stock when it was as safe as gold (only gold paid no dividend) and was now watching it go south at such an alarming rate that he decided to sell it. In a flash, the system turned on Marty and a lifetime of savings was gone. For his son Steve, it was an unforgettable lesson. It made him the revolutionary he is today.
The story reappeared last week in the Wall Street Journal. “The only net worth my father had beside his tiny little house was that AT&T stock,” Steve Bannon was quoted as saying. “And nobody is held accountable? All these firms get bailed out. There’s no equity taken from anybody. There’s no one in jail.”
That day, that October day when Marty Bannon panicked and took Jim Cramer’s advice from the TV and sold his AT&T stock, was when Steve Bannon had an epiphany: “Everything since then has come from there,” he said.
This could be Sen. Bernie Sanders speaking. This could be the indignant writers of the 2015 movie “The Big Short,” which ended by noting that almost no one went to jail for the giant scam. I also think of New York City cab drivers, many of them immigrants, who leveraged themselves for three generations to buy a cab and now have had their investment gutted by Uber. This is the human cost of disruption, which, if you don’t happen to be poor and drive a cab, is supposedly a wonderful thing.
At some point in the Steve Bannon story I started wondering: If his father got fleeced, if “nobody [was] held accountable,” how can the remedy be less regulation? If Wall Street picked his old man’s pocket, why has President Trump appointed tycoon after tycoon who think the fairest tax is none at all and, in some cases, got immensely rich by collapsing companies and squeezing employees?
Where is the Trump appointee who cares about Bannon’s father? Why don’t they go down the halls of the White House to reassure Bannon and tell him it will never happen again? Why don’t they name an executive action after his father: The Martin Bannon, You Will Never Lose Your Nest Egg Act of 2017? The government will see to it.
Maybe Steve Bannon is right. Maybe someone should have gone to jail for selling junk wrapped in the American Dream to people who only wanted to buy a home like his father’s. But that would have taken some new laws. As it happened, the reason almost no one went to jail is that no laws were broken. “Sometimes there’s frustration, because the things that have happened don’t rise to the level of criminal conduct,” Preet Bharara, the just-fired U.S. attorney for Manhattan, said back in 2014. “People are being jerks and stupid and greedy and negligent, but you can’t pin a criminal case on them.”
But the Trump administration is not for new laws and tighter regulation. It wants to roll back the Dodd-Frank financial reform, which, among other things, created the Consumer Financial Protection Bureau, whose name tells you all you need to know about its purpose. The president wants to hack nearly one-third out of the Environmental Protection Agency’s budget, and he appointed an administrator, Scott Pruitt, who hates the very agency he’s supposed to run.
Why cut the EPA budget? Is our water too pure? Is the air too clean? Shall we go back to where we once were? Look what Volkswagen did. It cheated on emissions standards and allegedly lied about it until the EPA outed it. Shall we leave these matters to the private sector?
Let them breathe nitrogen oxides.
I have heard too many people in business and finance complain about excessive regulation not to think there is something of a problem there. Maybe Dodd-Frank is too burdensome. Maybe class-action suits need to be limited. Maybe Obamacare really was a fiasco. Maybe. Maybe. Maybe.
But Bannon’s “administrative state” boogeyman is not what flattened his father’s nest egg. It was not excessive regulation that fleeced his father or, for that matter, changed AT&T from Ma Bell into just another business behemoth. Go home, Steve. You need to think.
Read more from Richard Cohen’s archive.