In his big debut at the Republican National Convention on Wednesday night, vice presidential nominee J.D. Vance pitched the convention crowd on the faux-populist schtick he’s been honing since leaving his venture capital job in Silicon Valley to run for Senate in the Rust Belt.
“Wall Street barons crashed the economy and American builders went out of business,” Vance said. “As tradesmen scrambled for jobs, houses stopped being built.” He went on: “We’re done, ladies and gentlemen, catering to Wall Street. We’ll commit to the working man.”
Who, exactly, is the “we” Vance is talking about here? Because not only is the 2024 Trump-Vance campaign being underwritten by financial executives who made more money than anyone in America in the wake of the 2008 housing crisis, Trump is being lobbied to install — and has said he is considering installing — as his next treasury secretary, the head of one of the Big Banks that sold the type of toxic securities that were at the heart of the crisis.
If he does, it would be consistent with his history: The last time Trump was president, he placed two of the housing crisis’ biggest villains in key cabinet positions — a decade after he said he was looking forward to a market crash.
Let’s go back to the tape, shall we? Asked in 2006 about the potential for a “spectacular crash” in the housing market, a real estate developer named Donald Trump said: “I sort of hope that happens because then people like me would go in and buy.” He gave that answer during an interview that was included in “How to Build a Fortune,” a Trump University audiobook.
“If there is a bubble burst, as they call it, you know you can make a lot of money,” Trump said at the time. “If you’re in a good cash position — which I’m in a good cash position today — then people like me would go in and buy like crazy.”
A decade later, as president, Trump chose to install two of two housing crash’s biggest profiteers — Steve Mnuchin and Wilbur Ross — as members of his cabinet. Mnuchin, who served as Trump’s Treasury Secretary, was among a group of investors who purchased the subprime lender IndyMac Federal Bank after it went belly-up in July 2008.
Under their stewardship, IndyMac became OneWest Bank, and though the Federal Deposit Insurance Corporation covered most of the bank’s mortgage losses, it went on to execute 36,000 foreclosures in California alone before Mnuchin’s group sold it for $3.4 billion in 2015. (Among homeowners’ OneWest horror stories is the time it tried to take a 90-year-old Florida woman’s home away because she owed the bank exactly 27 cents.)
Ross was Secretary of Commerce in Trump’s first administration. In 2007, he bought American Home Mortgage Servicing Inc. — the second-largest servicer of subprime loans in America — shortly after the company entered bankruptcy. According to the Nation, while owned by Ross, the company brought in a subcontractor called DocX, “which forged millions of mortgage assignments, claiming to be the officers of dozens of different banks. These documents were fraudulently signed after the fact to recreate a chain of title that lenders broke; they were a document clean-up shop.”
You might say: That’s the old Trump — haven’t you heard? After his brush with death, he’s a “changed man.” One that might even be poised to strike a new tone.
Why don’t we take a look at the list of donors underwriting this year’s campaign? We’ve got Stephen Schwarzman, who has boasted his private equity firm, the Blackstone Group, “was a huge winner coming out of the global financial crisis.” Following the crisis, a Blackstone portfolio company purchased tens of thousands of foreclosed single-family homes to rent them out; Blackstone made billions unloading that company before buying a new single-family home rental firm.
The United Nations has accused Schwarzman of being one of the single largest factors fueling the housing crisis not just in the U.S., but around the globe. In 2020, Reuters identified Schwarzman as Wall Street’s top political donor; Schwarzman gave $3 million to Trump that year. Schwarzman cut ties with Trump over the Jan. 6 insurrection at the U.S. Capitol, only to come crawling back this spring.
There’s hedge fund manager John Paulson, who made $20 billion dollars shorting the U.S. housing market in 2008. Paulson held an event this spring that raised an estimated $43 million for the Trump campaign. Since then, Trump has mentioned Paulson as a potential pick for Treasury Secretary, should he win a second term as president.
Paulson, though, will have competition for the role: Hedge fund chief Bill Ackman, who endorsed Trump on Saturday, is already agitating for Trump to nominate Jamie Dimon. As CEO of JPMorgan Chase, Dimon oversaw the acquisition of both Bear Stearns and Washington Mutual during the crisis — purchases made for pennies on the dollar. JPMorgan ended up paying $9 billion to resolve claims regarding how the company, Bear Stearns, and Washington Mutual packaged, marketed, sold, and issued toxic mortgage-backed securities to investors in the lead-up to the financial crisis.
Is Trump, as Vance declared so earnestly up on stage in Milwaukee, done catering to Wall Street? Not a chance.
