Eugene Grygo, Chief Content Editor, FTF News
The Democratic front-runner for the presidential nomination Hillary Clinton has hit a big political snag because of her connections to Wall Street.
This became painfully clear during the televised debate on Thursday, Feb. 4, on the eve of the New Hampshire primary on Tuesday, Feb. 9.
To recap, Clinton’s opponent (former?) socialist/independent and now-Democrat-shouter U.S. Sen. Bernie Sanders from Vermont hammered away at the former first lady-U.S. senator-secretary of state about the donations and speaking fees that have come her way via some major Wall Street players.
It has been widely reported that she got a $675,000 speaking fee from Goldman Sachs, and CNN reported on Feb. 4 that she has received $2.9 million for her presidential bid from Wall Street concerns – more than even the Republican candidates for the GOP nomination.
In addition, during the debate, Sanders called (as he has many times) for a return to the separation of commercial and investment banking via a 21st Century version of the Glass-Steagall provision of Great Depression-era reforms. He is also pushing for a new tax on “Wall Street speculation” to help Millennial-age and other college students pay off their big student loan debts.
By the way, Sanders, who is very specific about his effort in 1999 to keep Glass-Steagall intact, offers no specifics on the new tax.
“We pay for [student debt relief], in my view, by a tax on Wall Street speculation,” Sanders said during the debate televised by MSNBC. “The middle class bailed out Wall Street in their time of need. Now, it is Wall Street’s time to help the middle class,” Sanders crowed.
Does Wall Street then raise its fees, etc. — which will hit the middle class — in order to pay for the tax?
Ultimately, with hands waving, white hairs flying and eyes rolling, Sanders implied that Clinton has been bought and sold by Wall Street. This didn’t sit well with her.
“I think it’s fair to really ask what’s behind that comment,” Clinton said. “You know, Senator Sanders has said he wants to run a positive campaign. I’ve tried to keep my disagreements over issues, as it should be. But 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.
“And I just absolutely reject that, Senator,” Clinton said. “And I really don’t think these kinds of attacks by insinuation are worthy of you. And enough is enough. If you’ve got something to say, say it directly. But you will not find that I ever changed a view or a vote because of any donation that I ever received. … So I think it’s time to end the very artful smear that you and your campaign have been carrying out … in recent weeks.”
Clinton’s anger was booed apparently by the “Feel the Bern” supporters in the audience of the Durham, N.H. venue. Ironically, these are the same people who criticize Clinton for never showing emotion.
Sanders countered that the deregulation of Wall Street that occurred during the 1990’s was fueled by the lobbying, campaign contributions and influence of the financial titans that rule the world and keep everyone down. (Would that be similar to the ruthless repression of socialist states such as China, North Korea, Cuba and the former Soviet Union?)
Clinton responded in two ways.
She argued again that her plan for reining in Wall Street has gotten positive reviews from Nobel Prize winning economist and columnist Paul Krugman and former U.S. Congressman Barney Frank for being a more comprehensive approach.
Her other moves were more visceral.
First she charged that hedge fund billionaires and veteran GOP strategist Karl Rove are “running ads against me to try to get Democrats to vote for you. I know this game. I’m going to stop this game.”
Clinton also noted Sanders’ vote “to deregulate swaps and derivatives in 2000, which contributed to the overleveraging of Lehman Brothers, which was one of the culprits that brought down the economy. … I’m not impugning your motive because you voted to deregulate swaps and derivatives. People make mistakes and I’m certainly not saying you did it for any kind of financial advantage.”
The Wall Street Tango continued as one of the debate moderators MSNBC’s Rachel Maddow, host of her own show and a commentator, zeroed in on Wall Street again, making it clear that the Wall Street connections are a drag on her Progressive credentials among voters.
“Last night, when you were asked about speaking fees and the amount of speaking fees you got from Goldman Sachs speeches, you said that’s what they offered. Have you been too dismissive of voters’ concerns about this issue in your own campaign and your own career?” asked Maddow.
“Well you know, Rachel, I think I may not have done the job I should in explaining my record,” Clinton finally acknowledged. “You know, I did — when I left the secretary of State’s office, like so many former officials, military leaders, journalists, others, I did go on the speaking circuit. … But what I want people to know is I went to Wall Street before the crash.”
Clinton recounted her claim that she warned Wall Street before the Great Recession about “these shenanigans with mortgages,” pushed for an end the carried interest loophole for hedge fund managers, wanted “changes in CEO compensation,” and supported the creation of a consumer protection financial bureau.
So, Clinton was pointing to her ability to propose solutions. However, no one asked why she was unable to get Wall Street to stop the shenanigans that spurred the Great Recession.
Sanders, too, also failed in his bids to take on Wall Street.
These failures underscore Sanders’ point (which Clinton agrees with) that Wall Street firms have the power and they know how to use it.
The tougher questions, which were not asked at the debate, are whether this entrenched dynamic is permanent, and how much have current regulatory reforms and investors’ demands for more transparency changed the situation for the better.
After the smoke has cleared and the major parties have picked their nominees, there should be a good, old fashioned debate focused solely on the U.S. financial services industry. There should be an honest assessment of the progress that has been made and what regulatory reforms are still needed, if any.
Given that Wall Street has become a sexy campaign issue that spurs shouting matches, it could happen.
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