Saturday, October 03, 2015

Hillary Doesn't Blame Her Bankster Buddies For The 2008 Financial Meltdown (And A Little History Of Repealing Glass-Steagall)


I'm not sure how much money Hillary is raking in from Wall Street these days, but every report I've read indicates that the amounts are absolutely massive and that crooked players like Citibank are funding her campaign significantly. Before the campaign she had taken in $34,935,233 from the finance sector, the third highest of any member of Congress in history. In her 2006 Senate reelection bid, her top three contributors were Citigroup ($236,610), Goldman Sachs ($205,670) and MetLife ($156,060), and also in the Top 10 were Morgan Stanley ($123,560), JPMorgan Chase ($122,715) and Credit Suisse ($111,850). The financial sector was by far her top contributor ($7,338,748); the securities and investment industry alone gave her $2,744,933.

So the Bloomberg report Friday by Jesse Hamilton and Cheyenne Hopkins that she is excusing the big banks for the 2008 financial crisis shouldn't have come as a surprise to people who follow the flow of money in politics. In their report, Hamilton and Hopkins wrote:
Bankers and the lawyers who love them deserve some credit for Clinton’s considerable war chest, which took in $28 million in third-quarter donations, her campaign announced Wednesday. (Sanders was just $2 million behind, according to his own campaign announcement, though his cash tends to come in a stream of smaller, online donations. Wall Street isn’t a fan.)

... From her opening speech on economic policy in July, Clinton has maintained a delicate balance between talking tough on the financial industry and staying clear of detailed promises. She said she’d appoint regulators who understand that the biggest banks are still seen as too big to be allowed to fail, and she said that individuals should be prosecuted more when they go astray within their firms. Clinton argued that the government relies too much on slapping the banks with large fines while "the human beings responsible get off."

But nobody would mistake her views for those of Sanders or Warren-- who seems to relish her role as the scourge of Wall Street. Warren said in an April speech that "if the big banks keep calling the shots, they will own both our economy and our democracy."
Hamilton and Hopkins began their piece: "Hillary Clinton's explanation of what caused the 2008 financial crisis contains a notable omission."
Throughout the 2016 presidential primary campaign, Clinton has taken a markedly less critical view of large financial institutions like Citigroup Inc. than Democrats like Elizabeth Warren and presidential rival Bernie Sanders. Instead, Clinton has placed the blame on “shadow banking,” a term she has used to describe hedge funds and high-frequency traders.

“Her comments on their face are wrong,” said Christopher Whalen, senior managing director at Kroll Bond Rating Agency and author of Inflated: How Money and Debt Built the American Dream. “It is incorrect to blame the crisis on shadow banks. You can’t really differentiate between what they were doing and what Citi was doing.”

Unlike many in her party, when Clinton recounts the events that caused the global financial meltdown, she casts Lehman Brothers Holdings Inc. and American International Group Inc. as the primary villains.

“A lot of what caused the risk that led to the collapse came from institutions that were not big banks,” she told the Des Moines Register. And when actress/director/writer/cultural whirlwind Lena Dunham challenged her ties to Wall Street this week, Clinton said the problem with those who call for breaking up the giant lenders is “a lot of the problems were not from these traditional banks.”

In Clinton's hot-coals dash through financial topics, she's trying to criticize financial titans enough to satisfy her party while also taking campaign money from bankers. Any soft spot for big banks puts her at odds with the party's left flank. Sanders authored a bill in May to shrink such banks as JPMorgan Chase & Co. and Goldman Sachs Group Inc., and Warren remains the loudest critic of Wall Street, having introduced a bill to rebuild the Glass-Steagall wall between companies’ financial activities that Clinton’s husband breeched as president.

Deflecting blame from the banks also raises the question for Clinton: What about the crisis woes of firms such as Citigroup Inc., which has long been among her banking supporters? The lender and its employees have been the No. 1 contributor to her political career, giving more than $800,000--even during the period she told Dunham she “took on Wall Street” as a senator from New York. And two of Citigroup’s fellows in finance have stepped in as top-10 donors to the Democrat’s presidential run: Morgan Stanley and JPMorgan.

“If you don’t think Citibank was center to this crisis, it’s hard to imagine why we spent billions bailing them out,” said Robert Borosage, co-director of the liberal Campaign For America’s Future, who referred to Clinton as “Wall Street’s favorite Democrat.”

Senator Sherrod Brown, the top Democrat on the Banking Committee, has hammered the biggest banks from Capitol Hill and isn’t about to let them off the hook for the crisis, even as he said he’s “not going to get in a fight with Hillary.”

“There is plenty of responsibility to go around,” he said in an interview. “Big banks are part of it.”
Brown learned the hard way. He was a member of the House in 1999 when the Gramm-Leach-Bliley Act repealing Glass-Steagall came up for a vote, catastrophically removing barriers that kept banks, securities companies and insurance companies from combining. The banking industry had been agitating-- and bribing members of Congress-- for decades to repeal Glass-Steagall. The Republican-controlled House passed it July 1, 1999, with a huge bipartisan vote of 343–86 (Republicans 205-16, Democrats 138-69, Independent [Bernie Sanders] 0–1). Bill Clinton signed the disastrous bill November 12, 1999.

Among prominent politicians currently still active, here's how the votes broke down. First, House members who voted with the banksters to repeal Glass-Steagall:
Xavier Becerra (D-CA)
Roy Blunt (R-MO), now a senator
John Boehner (R-OH)
Richard Burr (R-NC), now a senator
Ben Cardin (D-MD), now a senator
Jim Clyburn (D-SC)
Eliot Engel (D-NY)
Harold Ford (D-TN), now an extremely corrupt bank lobbyist
Richard Gephardt (D-MO), now a lobbyist for Goldman Sachs
Lindsey Graham (R-SC), now a senator and a presidential candidate with 0% in the polls
Denny Hastert (R-IL), ex-Speaker currently plea-bargaining to stay out of prison

Baron Hill (D-IN), currently running for the Senate
Steny Hoyer (D-MD)
John Kasich (R-OH), now a governor and a failing presidential candidate
Ron Kind (D-WI), currently head of the Wall Street-owned New Dems
Rob Portman (R-OH), now a senator
Ileana Ros-Lehtinen (R-FL), still protected by Debbie Wasserman Schultz
Paul Ryan (R-WI)
Joe Scarborough (R-FL), retired after involvement in the death of staffer Lori Klausutis, now an MSNBC news personality
Debbie Stabenow (D-MI), now a senator
Ted Strickland (D-OH), currently running for Senate
Tom Udall (D-NM), now a senator
Fred Upton (R-MI)
David Vitter (R-LA), now a senator running for governor
Roger Wicker (R-MS), now a senator
And here are the still-active prominent brave souls who voted against the banksters that day:
Tammy Baldwin (D-WI), now a senator
Sherrod Brown (D-OH), now a senator
John Conyers (D-MI)
Elijah Cummings (D-MD)
Rosa DeLauro (D-CT)
Barbara Lee (D-CA)
John Lewis (D-GA)
Jim McDermott (D-WA)
Jerry Moran (R-KS), now a senator
Jerry Nadler (D-NY)
Ron Paul (R-TX)-- not Rand
BERNIE SANDERS (I-VT), now a senator and a presidential candidate
Jan Schakowsky (D-IL)
Maxine Waters (D-CA)
Hillary herself wasn't a senator until the year after the repeal, but there is no question that she would have supported the repeal, just as her husband did. Robert Reich, Bill Clinton's old school buddy and his labor secretary, wrote in July:
Hillary Clinton won’t propose reinstating a bank break-up law known as the Glass-Steagall Act-- at least according to Alan Blinder, an economist who has been advising Clinton’s campaign. "You’re not going to see Glass-Steagall," Blinder said after her economic speech Monday in which she failed to mention it. Blinder said he had spoken to Clinton directly about Glass-Steagall.

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At 8:21 AM, Blogger Thom OShaughnessy said...

Excellent commentary. A President Bernie Sanders is what the nation and the world needs today.


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