Top 5 Reasons Why Hillary Will Not Reform Wall Street
-by j. darcy
In the most recent Democratic debate of what is quickly degenerating into the political counterpart of bare-knuckle boxing, Hillary Rodham Clinton and Bernie Sanders went at it toe-to-toe, all snippy like, to the delight of the assembled audience and anybody else not in the punditry business who happened to be watching. Which, if the ratings are to be believed, weren't quite as many as MSNBC probably would have liked. That said, there was one part that stuck out rather curiously.
It was the part where Hillary took apparent umbrage at the notion (oh, just floating around out there, somewhere...) that she could be, for all intents and purposes, some sort of Wall Street shill! Far be it from me to even suggest such an uncouth thing, and maybe Hillary had every right to steam a little (it is her political life she's fighting for, after all), and she could have couched her response in the kind of typically vapid political doublespeak that experienced pols of her ilk are known (and reviled) for, but she goofed (in my opinion, the political equivalent of the baserunner who gets picked off stealing). She took a step too far and got nipped before she could dive back in.
I mean, to wit, when Secretary Clinton said this: "...time and time again, by innuendo, by insinuation, there is this attack that he is putting forth, which really comes down to-- you know, anybody who ever took donations or speaking fees from any interest group has to be bought... I think it’s time to end the very artful smear that you and your campaign have been carrying out in recent weeks, and let’s talk… about the issues. Let’s talk about the issues that divide us."
Uh, come again?
Unless the Senator from Vermont has been speaking in tongues this whole time (yes, his accent is kinda New York-y, but not that New York-y), I don't think he's been using innuendo to insinuate much of anything. He's made his position about her Wall Street ties pretty plain, I think, as well as his ideas about Wall Street excess and what needs to be done about it. But her use of the term "artful smear" is where she let herself be picked off. If Hillary is claiming that Bernie telling the truth about her generous Wall Street backing is a "smear," isn't she pretty much saying he's lying? And if Bernie's whole platform is built around the need for Wall Street reform and that he's the guy to do it, by hinting he's fibbing on her, (misleading people, mischaracterizing her...take your pick) then she's really saying his whole platform is a lie. He's not the guy who will fix Wall Street, she is! How will she do it? In nice, easy-to-swallow bits and pieces, of course. Slow and steady...
Or so it would seem. With that in mind, here are, in no particular order, a few reasons why we would be unwise to hold our breath waiting:
BILL CLINTON SIGNED THE GLASS-STEAGALL REPEAL
Among the crowning achievements of the New Deal was the Banking Act of 1933 (commonly known as the Glass-Steagall Act). In plain English it legally separated commercial banking from investment banking. Because it was understood that type of shenanigans was directly responsible for the Crash of '29 and its aftermath, this was considered sound public policy for at least the next thirty years or so, until Wall Street went to work on it. President Clinton signed the repellent piece of legislation repealing that law in 1999. Hillary was elected to the U.S. Senate in 2000. I'm not suggesting a quid pro quo here, quite the contrary. It's fair to say that when she took the oath of office, she did so knowing the guys on the Street owed her and her husband a favor-- a BIG one.
LARRY SUMMERS IS STILL AVAILABLE
I remember when Barack Obama got elected with all the hope-y, change-y stuff back in 2008. I was as pumped up as anybody until I heard that he was bringing back...Larry Summers. Much of the bad economics advice President Clinton listened to came from him (and others like him), and the economic policies of both Presidents Clinton and Obama showcase his misguided influence. (He was this close to becoming Fed Chairman in '13 until rank-and-file lefties-- pretty much anybody who reads this blog-- collectively pitched a fit). If Hillary makes it, do not be surprised to see this guy make yet another comeback. (Hint: dude is very Wall Street-friendly)
REMEMBER BROOKSLEY BORN?
For a few years during the Clinton Administration, she was the chairperson of the Commodity Futures Trading Commission (CFTC). She had misgivings about some exotic financial products called over-the-counter derivatives, and attempted to sound what in retrospect seems like a fairly mild alarm... but that was all Deputy Treasury Secretary Larry Summers, among other government bigshots friendly to Wall Street, needed to hear. He threw his not inconsiderable weight around, and didn't stop until he had essentially rendered her and her office meaningless. Born all but prophesied what would wind up happening in 2008 if those little buggers remained unregulated, but Larry was having none of that. Getting rid of her was ultimately one more thing Wall Street owed the Clintons for.
GLASS-STEAGALL AIN'T COMIN' BACK NO WAY NO HOW
So said, more or less, one of the Clinton campaign's economics advisors back in June. (Doesn't last summer seem so...quaint compared to where this campaign is now?) This is a big deal for obvious reasons, and the fact that Hillary seems to regard that pesky old Depression-era law like something akin to Bubonic plague, is telling in and of itself. Repeal of that law opened the floodgates to much of the irresponsible behavior that characterized the early 2000s in the world of high-finance. While Hillary to her credit (?) is on record as supporting Dodd-Frank, critics charge that this new law was not enough to prevent another financial crisis or more bailouts. A common sense solution would be to bring back Glass-Steagall, but that is something Wall Street specifically does not want and which, to date, Hillary will not get out in front of.
THE BIGGEST WALL-STREET OUTFITS ARE SOME OF HER BIGGEST CAMPAIGN SUPPORTERS
Some critics argue that Bernie Sanders is a one-trick pony for hammering away at this, but since Wall street folderol is the centerpiece of his campaign (and his opponent's greatest weakness), why shouldn't he? It's literally the one thing that Hillary can't say much, if anything of substance, about-- namely, what to do about the guys (and their interests) who have helped make it possible (at least financially) for her to be in the position she is in right now? It's like her Achilles heel, her glass jaw, that problem. At least two noteworthy bloggers on this very site have reeled off all sorts of ginormous dollar amounts with respect to Wall Street's largesse to the Clintons over the years. I won't rehash any of that because it makes my head hurt, but take my word for it-- it's a LOT. I'll give you a hint-- it rhymes with Goldman Sachs.
While we all understand that Bernie Sanders and his devoted minions are making it next to impossible for Hillary to run the laid back, feelgood campaign she wishes like hell she could run, there's no getting around the fact that this is fair game for Bernie to question her on, and not merely to score cheap political points. A lot of people in the long run felt pain as a result of the economic policies of the Clinton Administration, to which Hillary, whether she likes it or not, is terminally joined at the hip. Sanders has repeatedly asserted in so many words that he represents that faction of the electorate, and unless somebody should surreptitiously catch him somewhere acting out scenes from John Waters' Pink Flamingos (or something equally disturbing), she's going to have to continue deflecting those questions for the foreseeable future. Her bona fides as a "progressive" Democrat ring hollow to most people, politically savvy and otherwise, and the everybody-does-it defense will never explain away her ties to big campaign donors, especially running against an opponent who clearly does not and presumably will not play ball.
Who's up for some hippie punching?