CNBC’s Jim Cramer has raised significant concerns regarding the Trump administration’s approach to regulation, questioning the efficacy of its choices and their impact on economic growth. In a recent segment, Cramer went after existing rules as regulatory “hodgepodge.” He referred to them as “needless red tape” that prevents the great things still possible in our financial sector.
Cramer’s comments come as the market experiences buoyancy, primarily driven by strong earnings results from six major banks: JPMorgan, Morgan Stanley, Goldman Sachs, Bank of America, Citigroup, and Wells Fargo. Analysts had predicted that President Donald Trump would take the lead on deregulation. Most people thought this was designed to prop up the big banks. There were hopes pinned on their backs on a new wave of IPOs and exits that would pump life into the market.
Aside from a few noteworthy exceptions, the Trump administration has lagged on some key areas for deregulation. Most critically, it has failed to get the asset cap placed on Wells Fargo lifted. This arbitrary limitation stunts the bank’s development and competitiveness in the marketplace.
The Trump administration has pursued export regulations in order to safeguard U.S. artificial intelligence technology. These steps would help defend one of the nation’s most vital industries. Industry titans such as Nvidia lambast them for suppressing economic development and curbing billions of dollars of access to U.S. chips for dozens of other nations.
In doing so, Cramer underscored the chasm that exists between regulatory intention and economic reality. Secondly, he pointed out that the administration’s strategy appears more oriented towards punishment than aid. As it stands, this administration is all big stick, no carrot. This sense of outrage is indicative of an increasing anger within the market at those who were expecting an improved regulatory atmosphere under the Trump administration.
Despite these challenges, the CNBC Investing Club Charitable Trust continues to hold shares in Goldman Sachs, Wells Fargo, and Nvidia. Cramer offered some regulatory replacements that can free up even more economic opportunity and promote greater innovation. So he challenged policymakers to reconsider their approaches.
The White House has so far not answered queries about Cramer’s objection. Secondly, they haven’t touched the broader downstream implications of the regulatory status quo.