Beyond assailing the existence of too-big-to-fail banks, Clinton and Sanders have each proposed a type of financial transaction tax, meant to bring in billions of dollars in revenue from stock-market trading while putting the brakes on controversial high-frequency trading.
Although he didn’t say so directly, O’Malley suggested several times that consolidation in the banking business was a big factor in the 2008 financial crash and that the US economy remains vulnerable because of it. “Wall Street regulates Congress”, Sanders said, a line that garnered big applause.
“With respect to her past few weeks, ever since Majority Leader McCarthey admitted that the Bengazi Commission was a partisan ploy to go after the Secretary’s Presidential poll numbers, she has exuded more confidence and been able to go back to discussing the issues that really matter to the general public”, Wolf said, referring to comments made by the House majority leaderrecently about the Select Committee.
“And frankly, it’s tougher”, she said at the debate, adding: “If only you look at the big banks, you may be missing the forest for the trees”.
“Her closeness with big banks on Wall Street is honest, it’s heart-felt, long-established and well known”, former Maryland Governor Martin O’Malley has said on the campaign trail.
Tabulating campaign contributions for her entire senate political career shows that four of the top five her contributors are Wall Street banks (Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley). “If it’s too big to fail, it’s too big to exist”.
“I have often posed the following question to critics who claim that repealing Glass-Steagall was a major cause of the financial crisis: What bad practices would have been prevented if Glass-Steagall was still on the books?” wrote former Federal Reserve Vice Chairman Alan Blinder. Sanders has sponsored legislation that would curb corporate bonuses to executives who leave to work in government. During the darkest days of the financial crisis, Bank of America acquired two troubled financial companies – Countrywide Financial Services and Merrill Lynch, deals that wouldn’t have been possible before 1999.
Next to these more radical measures, Clinton’s tweaks fall short of any meaningful Wall Street reform.
The following year, we all saw how much good that did. The Act gave additional powers to the President to act during the banking crisis.
“My plan is more comprehensive”.
Still, her ties to big banks could be a problem in the Democratic primary, making it more hard for her to appeal to the far left of her party. Nonetheless, as well-intentioned as she may be, Clinton is still unwilling to attack the problem at its root.
Hillary Clinton advocates implementation of Dodd-Frank, which arguably has done a few good, as well as strengthening the Consumer Financial Protection Board. There are also hedge funds and other players that wouldn’t fall under Glass-Steagall. “That’s where the experts tell me the next potential problem could come from”, Clinton told the debate audience. “People don’t know all the wonky banking stuff, but they do know that the biggest banks got bailed out”.