Friday Reads: Hillary Clinton Takes On Wall Street
Posted: October 9, 2015 Filed under: morning reads, U.S. Economy, U.S. Politics | Tags: Barney Frank, Hillary Clinton, Wall Street 36 CommentsIt’s Friday!!!
Things continue to be a little crazy around the kathouse but every time I read political news I feel as though the crazy contagion started from politicians and the media that obsess on them. We’re getting close to 
the first Democratic Presidential Debate so candidates and their proxies are dialing it up to 11.
Former Congressman Barney Frank is on the trail for Hillary Clinton. He penned an op-ed at Politico at Politico in July in which he said progressives supporting Sanders are basically helping the GOP win. He also questioned a return to Glass Steagall, as supported by Elizabeth Warren.
In the post, titled “Why Progressives Shouldn’t Support Bernie,” the former Massachusetts congressman urged Democratic primary voters to steer clear of his fellow New Englander, warning “wishful thinking won’t win the White House.”
Frank pointed to the gleeful cheerleading of Sanders’ challenge to Hillary Clinton from neoconservatives like Bill Kristol to argue that Sanders only serves to weaken Clinton before her general election match-up. According to Frank, a Sanders candidacy — with his poll number steadily gaining on Clinton’s lead — would only distract from the circus that is the 15-person Republican primary.
You can find this quote and the rest of the article at Politico.
I believe strongly that the most effective thing liberals and progressives can do to advance our public policy goals — on health care, immigration, financial regulation, reducing income inequality, completing the fight against anti-LGBT discrimination, protecting women’s autonomy in choices about reproduction and other critical matters on which the Democratic and Republican candidates for president will be sharply divided — is to help Clinton win our nomination early in the year. That way, she can focus on what we know will be a tough job: combating the flood of post- Citizens United right-wing money, in an atmosphere in which public skepticism about the effectiveness of public policy is high.
I realize that before explaining why I am convinced that a prolonged prenomination debate about the authenticity of Clinton’s support for progressive policy stances will do us more harm than good, that very point must be addressed. Without any substance, some argue that she has been insufficiently committed to economic and social reform — for example, that she is too close to Wall Street, and consequently soft on financial regulation, and unwilling to support higher taxation on the super-rich. This is wholly without basis. Well before the Sanders candidacy began to draw attention, she spoke out promptly in criticism of the appropriations rider that responded to the big banks’ wish list on derivative trading. She has spoken thoughtfully about further steps against abuses and in favor of taxing hedge funds at a fairer, i.e., higher, rate.
This is reflective of her role in the 1990s, when she was a consistent force for progressive policies in her husband’s administration. And as Paul Krugman documented throughout the 2008 nomination campaign, she was, on the whole, to Barack Obama’s left on domestic issues.
On Wednesday, Politico published an article by Zachary Warmbrodt that describes how Frank is advising Hillary on her plan for dealing with Wall Street.
Frank told POLITICO on Wednesday that he has been working with campaign staff including Gary Gensler — a key ally in the eyes of Dodd-Frank supporters and often a foe of big banks during his time as chairman of the Commodity Futures Trading Commission, which regulates derivatives markets.
“He was a major formulator in this plan,” Frank said of Gensler, a former Goldman Sachs partner and a Treasury Department official during Bill Clinton’s presidency.
The input of Frank and Gensler could help Clinton’s standing among Democrats aligned with Wall Street critic Elizabeth Warren, the Massachusetts senator, and allay any lingering concerns that Clinton would go easy on a sector that her husband helped deregulate before the 2007-09 crisis that prompted the passage of Dodd-Frank.
Frank had more to say about the notion of bringing back Glass-Steagall.
In Iowa on Tuesday, Clinton gave a brief preview of the direction of the plan, which she said would be released “in the next week.” Clinton was responding to a question about whether she would try to reinstate the Depression-era Glass-Steagall Act that separated commercial and investment banking activities — an idea backed by Warren and Clinton’s Democratic primary competitor Sen. Bernie Sanders.
Clinton said, “Big banks are not the only things we have to worry about.” She said she also wants to target risks among insurance companies, hedge funds and other entities in the so-called shadow banking sector. Clinton added that she was willing to work to change the law to make sure individuals are held accountable for financial wrongdoing.
“What she has proposed is in the spirit of Glass-Steagall but in contemporary terms,” Frank said. “The Glass-Steagall debate is an artificial debate at this point. It’s 85 years old. Most people can see if we had it in effect, it wouldn’t have stopped AIG. It wouldn’t stop subprime mortgages that shouldn’t have been granted.”
Hillary Clinton has often stood accused of pandering or shaping policy proposals for political purposes, but her proposals for improving regulation of the financial system show her doing exactly the opposite — tackling the issue of mega-bank risk in a thoughtful way that is likely to prove politically thankless.
Her idea — not exactly optimized for a 15-second television spot — is to “charge a graduated risk fee every year on the liabilities of banks with more than $50 billion in assets and other financial institutions that are designed by regulators for enhanced oversight,” with fees scaled to be “higher for firms with greater amounts of debt and riskier, short-term forms of debt.”
It’s a mouthful. Banks will hate it. It doesn’t feature a crowd-pleasing, populist applause line. And it’s a pretty great idea.
Hillary Clinton’s risk fee, explained
The problem Clinton is trying to address here is that when a big bank goes bankrupt, it creates huge problems for the broader economy. Because of that, governments have a tendency to prevent big banks from going bankrupt.
And because of that, big banks have a tendency to engage in a riskier pattern of business than you see from other kinds of companies. All companies spend money to make money, but banks finance a much larger share of their spending with borrowed money (as opposed to retained profits) than you see from non-banks. And many banks rely very heavily on short-term borrowing, and fund ongoing operations by counting on their ability to get new short-term loans tomorrow. Financing investments with debt magnifies profits when your bets pay off, but it also magnifies losses when they don’t. Using short-term debt rather than long-term debt lets you pay lower interest rates, but also exposes you to the possibility of unexpectedly finding yourself unable to get the money you need in an emergency situation. Both tendencies magnify risk.
Clinton is proposing to clamp down on those risks by imposing a tax on bank debt.
That compensates the public for the financial cost of bailouts and the social cost of bank failures, while also creating new incentives for banks to manage their affairs in a less risky manner.
Read the rest at the link for more wonky goodness.
Hillary’s plans for Wall Street demonstrate the progressive values she has always had. If you watched TV last night, you probably saw the talking heads carrying on about Hillary’s so-called flip-flops on the Keystone Pipeline and the TPP. The problems these folks have is that they have assume that Hillary and Bill are basically the same person with the same political views. They also refuse to understand that when Hillary was Secretary of State she was working for Obama and had to carry out his policies. Now she’s on her own, and she’s expressing her own views–not Bill Clinton’s or Obama’s.
There’s a great post by Peter Daou at Hillary Men about this: TPP to KXL to WTF! Heads Explode as Hillary Goes Progressive. I hope you’ll read the whole thing. It is a wonderful reflection on how Daou came to be such a strong Hillary supporter and how he came to understand that she is a true progressive. Here’s the conclusion:
In the years I worked for her and in the time since, nothing I saw or heard dissuaded me from my first impression: Hillary is a progressive at heart. I’m perfectly aware that anything she does and any position she takes will get savaged by her detractors, but as a lifelong progressive, I know I’m supporting the candidate who is the most capable of anyone in America to advance the things I care most deeply about. Not Bernie Sanders, who I admire greatly; not Joe Biden, who I also like and respect. Certainly none of the out-of-touch and dangerously narrow-minded Republicans. For that matter, not Barack Obama or Bill Clinton.
Hillary will make an exceptional president. On women’s rights alone, her impact will be history-changing. As the father of a young girl (born during the 2008 campaign), nothing matters more to me.
I’ll conclude with a pithy observation from Lane Hudson, another blogger friend from the early days:
The same people criticizing Hillary for taking a position opposing Keystone XL pipeline and the Trans Pacific Partnership trade deal are the same people who wanted a Warren or Sanders challenge to pull her to the Left.
It’s going to be fun watching the Villagers’ heads explode as Hillary reveals more and more of her true, liberal self.
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If you notice inconsistencies of style, it’s because I finished this up under Dakinikat’s instructions. Her computer went down for the count in the middle of the post. I sneaked in the Hillary Men article, because I liked it so much. If we’re lucky, and the Geek Squad is successful, Dak will be back tomorrow with another post.
Thx BB!!!
How is your computer?
I took it there and it was perfectly well behaved. I found out that the only way you can restore off of windows 10 is in windows 10. It’s not an option without out a disc outside of windows. I had it up here at home and it was okay for the time I had it up. It was weird. Maybe I actually fixed it at one point and just needed to stay off of it. No idea but I brought it home. Sat there 20 minutes with the guy and the screen didn’t go black once. If it does it again I’ll do the reset.
So many have found issues with Windows 10. I’m waiting for all the ‘bugs’ to be sorted out.
I haven’t had any trouble yet.
Room over 90 or under 60 degrees? Too many tabs open in web, and older computer? Motherboard going out? Screen going out? Web browser older? I have this problem periodically with my older computer and wonder if its a virus, though the technicians said it was the motherboard. I really have to watch the heat and how many web windows I have open. Like, right now I have 4 Firefox windows open and a Safari. Also, it really helps when I prune the bookmarks. I am budgeting for new, however.
The tens of thousands who’ve died in Libya (and hundreds of thousands in Iraq) since she played instrumental roles in the destruction of both countries would probably beg to differ. There aren’t enough press conferences, spin doctors, and weaselly syncophants in the universe to wash the blood off of her hands. But they’re just foreigners.
So Hillary Clinton is personally responsible for hundreds of thousands of deaths in Iraq? And Libya too? All by herself she did this? Does George W. Bush bear any responsibility for Iraq, Ben? Does Obama bear any responsibility for Libya?
Naaaahhhh. It’s all the bitch’s fault, right?
The bitch’s fault? Lol. If you weren’t putting words in my mouth – words I never implied in any form – I would have to laugh at someone who doubts a candidate so much that unthinking hostility is the only response to anyone who doesn’t like her (and that goes for the comment about an alternate reality below.)
As for being personally responsible… Well, lets see. She was a senator who not only did nothing to oppose the Iraq War, who not only voted for it, but who was in favor of it until at least 2007. So you ask me why I shouldn’t blame Bush instead. Why can’t I blame them both? She was an enabler for the neo-cons when she should have known better or cared about innocent lives in Iraq more than her political career. Same thing for Libya. Sure, I blame Obama, but I blame her too. “We came, we saw, we died” she said, and so did several tens of thousands of civilians as a result of her short-sightedness and hubris. These are, incidentally, qualities which make her totally unfitted to oversee anything more important than a school board and even then I, along with lots and lots of people (who aren’t motivated by some irrational hate despite what people in the grip of reactionary defensiveness might care to tell themselves), would have some doubts. This, of course, is to say nothing of the fact that all of these newly-found progressive positions are quite newly-found indeed and most people remember a few short years ago when she was against marriage equality, had no problems with spiralling rates of incarceration, and was only concerned with income inequality insofar as it made it ever-so-slightly more difficult for her to buy her 37th (or however many-th) house.
Hell, I don’t even hate, or dislike, her. She’s a lot less scary than a lot of the Republicans. But pretending like she’s anything but a relatively right-wing Democrat (at least on international issues and issues of criminal justice) who will deliver anything other than more of the same.
http://www.presidency.ucsb.edu/ws/?pid=77045
Much to her credit, she gave that speech. But in a disaster of such scale, I believe that the only honorable response for anyone involved, given the millions of ruined lives resulting, would be to retire completely from public life, even if only as an acknowledgement of the fact that anyone who voted to allow such a thing to happen had failed to foresee the horrible consequences that would come from it. There are some things that we can move on from, forgive and forget, but not these wars, not so long as the people responsible still hold power and have speaking engagements and book deals while those who died are mostly buried forgotten.
And as for the neo-cons who orchestrated it – Bush, Cheney, Yoo, Rumsfeld, Wolfowitz, Feith, Bolton, all of them – as Peter Tosh put it, I wouldn’t want to be so much as a flea under their collars when they get what’s coming to them.
I mistyped. The quote is, “We came, we saw, he died.” There’s something disgraceful about cawing over a triumph against a tiny, half-armed military in a small, sparsely-populated country. It’s like being proud of killing a cat or something.
Ah. Sure sign they’re losing when the ostensibly liberal concern trolls show up 🙂
He’s a libertarian.
He’s a libertarian, like RAND? Brghahahahaha!
You’re not “motivated by some irrational hate”? Yeah, right. It’s clear from this comment alone.
Thanks for the laugh.
He’s in the party of Rand, there’s nothing rational about that!!!!!!!!!!!!!!!!
Here is her speech at the time of the resolution vote http://www.hillaryhq.com/2015/02/flashback-that-famous-2002-antiwar.html?m=1
I remember this. Thanks for posting the link.
You can’t vote for war and then be surprised when there is a war.
Being the Democratic Senator from NY you can vote to demonstrate Unity your fellow member of Congress, the people of New York who lost so much on 911, and your NY constituency. It’s basic protocol to give the POTUS a thumbs up to defend the USA “IF” he/she should need to do it.
http://www.politifact.com/truth-o-meter/article/2015/may/12/jeb-bush-hillary-clinton-and-authorizing-war-iraq/
What alternate version of reality did you come from? I invite you to go back there.
It is a very good post, however it got there!
Of course Hillary is liberal, she always was. Her voting record in NY is comparable to Sanders’. Actually, she is more courageous than most, as she has actually dared to blast Republicans, individually and collectively. Democrats have seemed so afraid of Republicans since 1980, that they bend over backwards to avoid actually attacking the party. But Hillary is willing to fight them, which is what our party desperately needs. We have to weed enough of these insane radical rightists out of the government, so that we can actually move in a positive direction. And though of course they will always flourish in certain states, and make up a dangerous minority, they have to be exposed for the anti-rational people they are. Dancing around them does not work.
People on the so-called Left who never liked Bill Clinton, just wanted an excuse to attack Hillary, so they picked the Iraq Resolution, which 77 or so Senators voted for, not including Obama, who was of course not in the Senate then. Then there is all this “Hillary is too close to Wall Street” nonsense. Hillary is so dedicated to improving the lot of the middle class as opposed to the wealthy corporations, that they will spend trillions of dollars trying to defeat her. The Left, in their self-righteous disdain for anything not of their own choosing, is actually helping the powers that they claim to hate. You will never get them to realize or admit it, though.
William, you are a wonderful Hillary Man. I’m proud to “know” you.
Ditto Sweet Sue……….It’s quite nice to have like minded men onboard with Hillary. I am so frigging sick of the media coming on with the Hillary/Wall Street are one and same bullshit.
Frigging wall stick is in panic mode over the republicans, that ought to speak loudly to all of us.
I am loving every damn thing Hillary is coming out with and against, she’s one brilliant woman, and love her bravery and humanity.
You comfort us all William, keep up your devotion.
Love the post. Yes, it was obvious back in 2008 that Hillary was more progressive than Obama — if you bothered to look at the record. I think the brogressive Obots of 2008 have turned into the “feel the Bern” fans of this year. Look at Sanders’ stance on guns.
I think all the Hillary supporters of the last many years will not be fooled by the MSM. She did, after all, win the most votes in ’08. I think she will again in the primary season, and in November ’16. Then she can nail Trump’s hair to the wall of the Oval Office.
Thanks, ladies. I can’t wait to read the Frank article, although I’m still mad at him for urging Ruth Bader Ginsburg to retire!
Here I am the bride of 39 years, rich in affection for my husband who has occupied my life unto this fall of age, steadfast, and ever lasting love.
You’re quite blessed!
May your contentment increase!
Fannie, may you and your husband have many more years of love together!
Best wishes to you and your husband, Fannie. I’m glad you have your soul mate. Peace to you both
Thank you all……Joan Baez, yeah.