In an earlier post on this site, the case was made that the American public was outraged that no one went to jail for the systematic housing fraud that happened starting in 2005 and precipitated the worst recession since the Great Depression.
The resulting recession wiped out over a trillion dollars in housing wealth from individual investors, caused the federal government to bail out major corporations and financial institutions, many of which started and benefitted from the fraud, and created an unprecedented income re-distribution that wiped out the wealth of millions of Americans.
The impact of this historic financial debacle was not lost on the American public.
But based on the arrogance of American’s elected politicians of both parties and bureaucrats who had the power to prosecute, no culprits in this fraud were ever prosecuted.
This lesson became a core message that resonated with Bernie Sanders and the Progressive in their powerful grassroots presidential campaign.
But it also was a core belief of Steve Bannon, the controversial publisher of Breitbart News and now a senior Trump advisor, who injected that sad injustice into the Trump campaign. He then cleverly combined it with job losses to immigrants, bad trade deals, America first-ism, good-old American prejudices, and an inept federal government to feed the worst fears of a gullible public.
Here is how Bannon described the impact of the housing fraud:
“Particularly the fact — think about it — not one criminal charge has ever been brought to any bank executive associated with 2008 crisis. And in fact, it gets worse. No bonuses and none of their equity was taken. So part of the prime drivers of the wealth that they took in the 15 years leading up to the crisis was not hit at all, and I think that’s one of the fuels of this populist revolt that we’re seeing as the tea party.”
Then, Bannon, a former Wall Street banker, advocated in favor of the Glass-Steagall Act. This is not standard Republican policy and it made Bannon an outsider among Republicans who hate regulation, but his anti-Wall Street stance resonated with Trump supporters.
In short, he took the Progressive populism of Sanders and had the ability to link it to the ascending Republican candidate. At the same time, Hillary Clinton did not make this a more forceful position and then got bogged down in her own self-created problems related to bad decisions about e-mails and other nagging investigations.
Bannon then went further into Sanders’ message when he said hedge funds and banks “have never really been held accountable for what they did [and that] has fueled much of the anger in the Tea Party movement in the United States.”
So while the historic housing fraud and its unpunished culprits was a very early core message of Progressives Sanders and Elizabeth Warren, that same historical event was better used by right-wing Republicans to get the least qualified candidate in U.S. history elected to the White House.
Now, we have the odd situation that Bannon could push this anti-Wall Street message from the right with more power than the Progressives could do from the left. What a strange world.