America’s new commander-in-chief is once again under attack for following through on a controversial campaign promise. President Trump’s executive recent executive order ordered a full review of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a move which has triggered angry reactions across the United States from consumer protection organizations and liberals more generally.

Senator Elizabeth Warren, a fierce advocate for stronger regulations on Wall Street, expressed outrage: ‘Giveaways to giant banks so they can cheat people and blow up our economy again?’ On the other hand, organizations such as the US Chamber of Commerce applauded the move to start deregulation.

The executive order itself changes no regulations, but it is the first action taken by the new administration to pursue the heavily deregulatory policies Mr Trump has repeatedly promised. Mr Trump has previously stated that “we expect to be cutting a lot out of Dodd-Frank because frankly, I have so many people, friends of mine that had nice businesses, they can’t borrow money.”

Up to now, Mr Trump’s base supporters have been thrilled by his previous executive orders, ranging from the controversial travel ban, to the order to construct the Mexican border wall, to restrictions on administration officials working as lobbyists after they leave office.

However, unlike some of his previous actions which were well-received either generally or within his base, recent soundings of public opinion suggest that a broad deregulation of the financial industry would be widely unpopular among Americans as a whole. According to a new Quinnipiac survey, half of all Americans support increased financial regulation, while only 37% support the idea that such regulations damage the economy.

This is in contrast to the proposed border wall, which is also unpopular among a majority of Americans according to the same survey. However, the wall has strong support among his base; chants of “build the wall” and “ten feet higher” were ubiquitous at his rallies.

Mr Trump harnessed a wave of right-wing nationalism to win the presidency, a nationalism hostile to businesses perceived as acting against the national interest.

During the election this anger was mostly directed towards companies that outsource to foreign countries, but it could very easily turn towards financial institutions which have have been perceived as consistently choosing profit to the detriment of the public good.

On a broader level, the order presents a dissonance between Mr Trump’s populist rhetoric and what may be perceived as actions designed to benefit the elite.

Exactly how deregulation would affect public perception of Trump, and more importantly, how it would affect the public, is unknown. Much depends on when (not if) the next stock market crash and/or economic downturn occurs. The world economy has recovered to a large extent from the Great Recession, but there are still many visible (and many more invisible) triggers for a collapse.

A trade war with China, an option Mr Trump has not ruled out, could certainly damage the US economy to a point at which financial institutions face difficulty. So could a breakup of the EU, which remains a troubling possibility with the so-far impressive performance of Eurosceptic Marine Le Pen in the French elections.

In the aftermath of the worldwide economic recession of 2007-2010,  an investigation into its causes, the Levin-Coburn Report, concluded that the collapse was a result of  “high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

Previous deregulation, most notably the repeal of the Depression-era  Glass-Steagall Act, had resulted in what amounted to a ‘Wild West’ for financial institutions, and in the eyes of many led to the 2008 crash.

Repealed under the Clinton administration, the law was designed to separate commercial banking from investment banking, and so restrict the amount of risky trading that could be conducted in banks that held customers’ savings. This measure was itself a reaction to the Great Crash of 1929, in which irresponsible investments by such banks jeopardised the savings of millions of Americans.

The Dodd-Frank Act was meant to lessen the chances of such a collapse occuring again in the future by banning certain investments deemed excessively risky and establishing increased oversight of financial practices.

Among many other provisions, the 848-page law created a number of new regulatory bodies, including the Consumer Financial Protection Bureau and the Financial Stability Oversight Council. The act also set out standards for tranparency in the form of mandatory reporting from financial agencies

Whether the Act would have prevented a crash is unknown; with its removal imminent, we will never know for sure. However, its repeal, alongside other Obama-era regulations likely increase the potential of a 2008 style crash if the Levin-Coburn Report is to be believed.

Should an economic collapse take place during his time in office, President Trump may be faced with tough questions not just from liberals, but from his own base as to why they were not protected by the federal government. Elected as a populist, Mr. Trump is vulnerable to a potential populist backlash should his reforms go awry. On the other hand, if the American economy maintains stability for the next four years, the efforts being taken to deregulate Wall Street may end up as little more than a footnote to his administration. Only time will tell.

For students in St. Andrews and around the world, the efforts of the Trump administration to deregulate financial institutions ought to be worrying. While any changes to regulations obviously only impact the United States, the economic fallout of a recession in the country would be deeply felt worldwide, including in the United Kingdom, which will soon be weathering storms outside the comparatively safe harbour of the EU common market.

Young people are often the most vulnerable in the workplace, and therefore often suffer the most during economic downswings. Such a downswing has not occurred for nearly ten years, adding to the already existing economic anxiety of students who worry that they could graduate into a job market strangled by an economic collapse.

A collapse may possibly be hastened or magnified by a lack of financial regulation. Students can only hope that such a collapse does not occur until they enter a stable position in the workforce.

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