Must Read Money Stories for Friday, Feb. 10

by February 10, 2017
President Donald Trump criticized the Federal Aviation Administration's role in handling air-traffic control, echoing industry advocates who favor placing that role in the hands of a nonprofit corporation. (Aviation photo courtesy of Pexels)

Trump criticized the Federal Aviation Administration’s role in handling air-traffic control, echoing industry advocates who favor placing that role in the hands of a nonprofit corporation. (Aviation photo courtesy of Pexels)

Taking aim at Dodd-Frank

Banking stocks have rallied since the election on the expectation that the Trump administration will roll back some of the most onerous aspects of Dodd-Frank. The Economist took a measured look at Trump’s eighth executive order for regulating America’s financial system and the likelihood that some, or all of the act may be repealed. Capital requirements for smaller banks may be eased, as may some of the procedures for liquidating big banks when the bankruptcy code cannot be applied. Still, the bar for changing the law is high. Although Republicans have control of Congress, they are shy of the 60 votes needed to break a filibuster. The Economist’s take is that the jury is still out as to whether banks will profit under lesser regulations during the Trump administration.

Trump talks taxes; stocks soar

Reuters reported Wall Street’s main three indexes soared to record highs on Thursday after President  Trump said he will be making a “phenomenal” tax announcement within a few weeks. Trump did not reveal any details about his tax-reform plan. Stocks have rallied to new highs since Trump’s election as businesses anticipate lower corporate taxes, fewer regulations and increased infrastructure spending. Reuters spoke to Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland. He cautioned that market returns are likely to be “more modest” as the details of the plan are rolled out.

Tech firms fear visa crackdown

Technology companies are distancing themselves from Indian outsourcing firms amid fear that President Donald Trump will crack down on the popular H-1B visa program for highly skilled workers. U.S.-based companies are hopeful that any new restrictions on the specialized visa program will be aimed at foreign firms, rather than American-based companies that rely on the program. The Wall Street Journal reported there is bipartisan criticism in Congress over the model used by Indian outsourcing firms, which win a large share of the H-1B visas offered through an annual government lottery. Critics have said companies bring in short-term Indian workers on low salaries without attempting to find skilled American workers.

Air traffic control future up in the air

Trump called the U.S. air-traffic system “obsolete” in comments that favored handing off the government’s role to a nonprofit corporation. Airlines cheered the comments, according to Bloomberg. The industry has favored splitting control from the Federal Aviation Administration. On the other side, opponents have argued the plan to place the air-traffic control system in the hands of a nonprofit corporation would give the airlines too much control and endanger national security, Bloomberg reported. Delta Air Lines has split with the airline industry over the issue, saying the U.S. system functions well.

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