Hillary Clinton’s Lame Wall Street “Reform” “Plan”

By James Kwak

Hillary Clinton is competing for the nomination of a party whose progressive base thinks, with considerable justification, that her husband is to blame for letting Wall Street run amok—and that Barack Obama, under whom she served, did too little to rein in the bankers who torpedoed the global economy. On top of that, she faces a competitor who says what the people actually think: that the system is rigged, that big banks should be restrained, and that people should go to jail.

So she has no choice but to try to appear tough on Wall Street—but she has to do that without simply jettisoning twenty-five years of “New Democrat” friendliness to business and without alienating the financial industry donors she is counting on. So the “plan” she announced yesterday has two messages. On the one hand, she wants to show that she has the right approach to taming Wall Street. Unfortunately, it’s just more of the same: another two dozen or so regulatory tweaks, mainly of the arcane variety, that will produce more of the massive, loophole-ridden rules that Dodd-Frank gave us.

Or, that could be the point. Her second message is a promise to the financial industry that, instead of real structural reforms, she will continue the technocratic incrementalism of the Geithner era—which has left the megabanks more or less the way they were on the eve of the financial crisis. Maybe, for her base, that’s a feature, not a bug.

For more, see my latest column for The Atlantic.

31 thoughts on “Hillary Clinton’s Lame Wall Street “Reform” “Plan””

  1. Technocratic incrementalism may be the order of the day, but in your view how radical is structural enough? Are we talking about taking the role of issuing the money supply away from commercial banks, in some sort of full reserve or limited purpose banking? Or is it about smaller banks, a better resolution authority, etc. Some would call the latter technocratic incrementalism.

  4. http://michael-hudson.com/
    http://michael-hudson.com/2015/09/killing-the-host-the-book/
    The Table of Contents is as follows:

    Killing the Host: How Financial Parasites and Debt Destroy the Global Economy

    Introduction: The Twelve Themes of this Book

    The Parasite, the Host, and Control of the Economy’s Brain

    I. From the Enlightenment to Neo-Rentier Economies

    1. The Financial Sector’s Rise to Power

    2. The Long Fight to Free Economies from Feudalism’s Rentier Legacy

    3. The Critique and Defense of Economic Rent, from Locke to Mill

    4. The All-Devouring “Miracle of Compound Interest”

    5. How the 1% holds the 99% in Exponentially Deepening Debt

    6. Rentiers Sponsor Rent-Free National Income Statistics

    7. The Failed Attempt to Industrialize Banking

    II. Wall Street as Central Planner

    8. The Stock Market as a Predatory Arena

    9. From the Stock Market’s Origins to Junk Bonding

    10. Finance vs. Industry: Two Opposite Sides of the Balance Sheet

    11. The Bubble Sequence: From Asset-Price Inflation to Debt Deflation

    12. The Bankers Saw It Coming, but Economists averted their Eyes

    13. The Bailout Coup of 2008: Saving Wall Street instead of the Economy

    14. The Giveaways get More Deeply Politicized and Corrupt

    15. Wall Street Pretends to Insure against the Crash

    16. Bailing out of Goldman via AIG

    17. Wall Street Takes Control and Blocks Debt Writedowns

    18. From Democracy to Oligarchy

    III. Austerity as a Privatization Grab

    19. Europe’s Self-imposed Austerity

    20. The Neoliberal Conquest of Post-Soviet Latvia

    21. Creation of the Troika and its pro-Rentier Agenda

    22. High Finance turns Greek Democracy to “Junk”

    23. Installing Technocrats as Proconsuls

    24. The Troika’s Road to Debt Serfdom

    25. Creditor Colonialism: U.S. Courts Block Debt Writedowns

    26. Financial Austerity or a Clean Slate?

    27. Finance as War

    28. Is the Mode of Parasitism overshadowing the Mode of Production?

    IV. There Is An Alternative

    29. The Fight for the 21st Century

  10. THE above interview shows that Hilary’s idea of American privacy and the idea of individual rights is not synonymous with support of seeing Snowden as a potential Nobel Prize candidate…in fact it seems she would railroad him direct to jail (…do not collect $100 …go directly to Jail). In this interview, Hillary’s elastic political nature comes in question when it comes to giving big money their “get out of jail free card…” What to expect from Hillary Clinton on Wall Street?
    Big talk…no action. Universal Wealth Care will be the agenda, and in the end it will prove one big fallacy.

  11. Bankers Warn Dems To Shut Elizabeth Warren Down

    Published on Mar 29, 2015

    Since taking office in January of 2013, Senator Elizabeth Warren (D-MA) has made a name for herself with her fiery takedowns of big banks and the regulators who failed to keep those big banks in check. For example, back in 2013 she asked a panel of bank regulators whether or not ‘too big to fail’ has become ‘too big for trial.’ Comments like that have made many Wall Street enemies for the senator, but that is certainly a sign that she’s on the right track.

    As it turns out, some banksters are actually thinking of boycotting the Democratic party because of her. All of this comes as progressives attempt to line up a liberal alternative to Hillary Clinton in the 2016 presidential elections.

    What kind of impact will Wall Street’s boycott have on the 2016 race, and what should it tell us about politics in a post Citizens United world? America’s Lawyer, Mike Papantonio, discusses this with Richard Eskow, senior fellow at the Campaign for America’s Future and host of The Zero Hour.

  12. Clinton Outdoes Tsipras in Kolotoumbas with Her Reversals on TPP, Bank Regulations – 10/09/2015 – Yves Smith
    http://www.nakedcapitalism.com/2015/10/clinton-outdoes-tsipras-in-kolotoumbas-with-her-reversals-on-tpp-bank-regulations.html
    (excerpt on issue):
    “On the banking front, even though Clinton has just served up a not-too-bad menu of bank reforms, it’s inconceivable to see her as doing more than head-fakery. The Clintons have ridden to success on the back of the fundraising of the powerful Robert Rubin faction in the Democratic party. And Obama, who has been similarly dependent on Big Finance as donors, has also made crowd-pleasing gestures to go after the banksters and never followed through in any serious way. Remember how the Administration kept talking up its plans to close the carried interest loophole in 2011 and 2013? Yet Obama held big fundraisers in New York City and the homes of private equity barons whose lucre had come from that ruse.”

  13. Yves Smith’s Naked Capitalism article includes this link to a review of the “reform” plan.
    Thu Oct 8, 2015 6:52pm EDT
    Clinton courts left with promise to break up risky banks
    NEW YORK/WASHINGTON | By John McCrank and Amanda Becker
    http://www.reuters.com/article/2015/10/08/us-usa-election-clinton-bank-idUSKCN0S22KA20151008
    ———————————————-
    while there, serious browsers might review these:
    http://www.reuters.com/people/elizabeth-warren

  14. Finally; hat tip to naked capital again for posting;
    http://triplecrisis.com/the-financial-sector-is-too-big/
    The Financial Sector is Too Big
    Philip Arestis and Malcolm Sawyer
    A serious critical perspective that comprehensively sets aside the idea that simple risk regulation will satisfy the restraints necessary to truly correct the disjointed and disconnected dependent pathology of
    too big to fail finance sectors. This is a serious read, and well worth the look. Yves Smith also posted it here:
    http://www.nakedcapitalism.com/2015/10/the-financial-sector-is-too-big.html
    The authors’ summary statement:
    “The effects of financial development on growth and stability show that there are tradeoffs, since at some point the costs outweigh the benefits.”
    There are many reasons for thinking that the financial sector has become too large. Its growth in recent decades has not been associated with facilitating savings and encouraging investment. It has absorbed valuable resources which are largely engaged in the trading in casino-like activities. The lax systems of regulation have made financial crises more likely. Indeed, and following the international financial crisis of 2007/2008 and the great recession a number of proposals have been put forward to avoid similar crises. To this day, nonetheless, the implementation of these proposals is very slow indeed (see, also, Arestis, “Main and Contributory Causes of the Recent Financial Crisis and Economic Policy Implications,” for more details).”
    ===================
    MEANWHILE:: http://www.marketwatch.com/story/why-99-of-trading-is-pointless-john-bogle-2015-07-30?mod=mw_share_twitter
    Market Watch posts:
    Why 99% of trading is pointless By Mitch Tuchman
    Published: Aug 1, 2015 8:32 a.m. ET
    stating:
    “An astonishing $32 trillion in securities changes hands every year with no net positive impact for investors, charges Vanguard Group Founder John Bogle.
    Meanwhile, corporate finance — the reason Wall Street exists — is just a tiny slice of the total business. The nation’s big investment banks probably could work for less than a week and take the rest of the year off with no real effect on the economy.”
    ———————————————————————

    SO IN THE END RISK AVERSION IS MORE POLITICAL EVASION THAN REAL REFORM. Democracy is at Risk…Speak to THAT!

  15. Hillary claims there is a war on women, and she is correct, but the war is mostly caused by people of her like minded ideals. Much like cocaine is good because of the energy delivered and the sex is better, in her mind two wrongs make a right and if it makes you feel good, it must be right.

    Not necessary Hillary, just like a wound that doesn’t kill you so you shall make a full recovery and all is good, we forget that once the pain of the wound goes away, a tiny dancer in your head remains to bug you until you die. Trying to hide the suffering behind drugs and alcohol is no way to run a country. Publicly all is fun and games on a Saturday night, privately she beats Bill because he supposedly comes up short in bed. The war began when she was a kid, and doesn’t end until she meets her reward. Speak to this….. everybody!!

  16. @Anonymouse : Personally compromised,…compromise has become a doctrine at our highest levels (at least as it is sold to the democratic public and absolves the republic’s representatives from taking direct action). After 2007-2008 there was a coherent uproar from middle class sectors that have become comfortably numb with what amounts to a eyes wide shut liberalism or a mouth wide open popular conservatism that currently screams what can my country do for me.

    We have dropped the ball and most blog currency has narrowed down on serious exposures and stayed within the mainstream boundaries of a scattered dream with periodic meaning from selective events. We just bombed Doctor’s without borders, and M. Obama has just sat down with the middle management of the global cartel (see:
    Michelle Obama Helps Legitimate Private Equity Camo-Washing @
    http://www.nakedcapitalism.com/2015/10/michelle-obama-helps-legitimate-private-equitycamo-washing.html?utm_source=feedburner&utm_medium=emailutm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29… where that seems to be just a questionable “business” oriented ethical question not a transfer of power using Obama as the next catalyst. We have dropped the ball. Like a dream that we can’t get back to our political media consciousness has drifted into cognitive dissonance and lost track of the arterial pulse.

    Baseline itself is meandering. Yves Smith’s Naked Capitalism seems to be the only information portal that is still arguing the case. As James indicated in his last blog concerning Larry Lessig, the “voice” is being processed before it reaches the public and the message that really matters is too “marginal” to the mainstream propagation of the faithful …devil in the details better left to the professionals…pool of swamp rats that are central power puppets. Serious open discussion has faded and the news media has us all jaded with one atrocity after another as if they were flavors of the week. The truth is that the trail has gone cold and following the money is not popular anymore because the war economy has fogged up our senses.
    Unfortunately Hillary is too compromised a “champion” to warrant support, and anyone that is on issue and message is seen as an upstart if not an unpatriotic socialist. We are dead in the water and drifting and frankly a good wind does not seem likely before the next storm. I hope I am wrong.

  17. https://imprimis.hillsdale.edu/justice-and-the-obama-justice-department/?utm_source=facebook&utm_medium=social&utm_content=september15&utm_campaign=imprimis
    Justice and the Obama Justice Department
    September 2015 | Volume 44, Number 9
    by, Michael B. Mukasey Former U.S. Attorney General
    (quote)
    “How did we get to where we are today? Even before the 2008 election, the warning signs were there. The man who was to become U.S. Attorney General told an audience during the election campaign that the Bush administration had permitted abuses in fighting terrorism. He said there would have to be “a reckoning.” During his subsequent tenure, in a moment of unguarded candor, he described himself as the President’s “wingman.”….( Mukasey :2015).”

    …if the shoe fits…

  18. There is no question Bruce that we are outnumbered, that much I’ve known for quite some time, yet we are not outgunned morally, and it is those morals which shall prevail in the end. I would not lose sleep over today’s troubled politics, it is most certainly doomed beyond repair. The gems are in belief that tomorrow holds the keys to today’s nightmares. A reset, a new beginning which can not be seen except for a chosen few, the chosen few who can actually make a difference for America, and for the world as a whole. The end times are here, these things MUST occur, there is no escape from these facts, if you don’t believe in church, no problem, the church will come to you in due time, for time waits for no one, not even American politics.

    Best to you and yours during these troubled times. The Baseline Scenario is the cleanest dirty shirt among the bunch, follow it closely and religiously, it will pay off at the very end.

  22. One day after the statute of limitations on filing a criminal case ran out:

    http://www.theguardian.com/business/2015/oct/05/ben-bernanke-says-wall-street-executives-should-have-gone-to-jail

    We are outgunned morally and ethically because “religion” is the experientially earned RULE OF LAW that was trumped by operatives psychologically managing the people in the pews for decades to become masochists who do not DESERVE MORAL OR ETHICAL rights hence no access to justice and mercy through a SANE court system.

    Political philosophy:
    Nihilism, hedonism, anarchy = “What is torture when greed is good?”

    Rock solid “math”:
    More misery for others = More $$$$ for ME ME ME

    Every human being has the right to make their lives less miserable through honest work. Putin is reminding us that “honest work” includes the rough stuff of cleaning out the human gene pool of the depraved and there is nothing more depraved than that human being who uses “god” as an excuse for war mongering, slavery, theft, USURY, and unbridled perverted sadistic hedonistic selfishness. Welcome to the USA mega churchs…”you must forgive the predators (who, btw, do not ASK for forgiveness or show any remorse) otherwise you are not being a good christian…” bat sht crazy psych ops to the bitter end…

    ALL of D.C.’s sycophants signed on for the economic genocide of born and bred middle class USA. They are just PRETENDING that there is going to be another normal election….the “secret” plan – just like the details of the Pacific Trade deal – is the grand operatic culmination of revenge – THEY get to choose who will go into the “Work Will Turn You Into A Debt Slave” FEMA camps under Obambi’s “Marshall Law” powers….

    Predators ALWAYS take the pre-emptive strike. Psych 101.

  23. …………….WALL STREET ON PARADE…………………..
    Hillary’s Wall Street Plan:
    Worse Than Shuffling Deck Chairs on the Titanic
    2015
    http://wallstreetonparade.com/2015/10/hillarys-wall-street-plan-worse-than-shuffling-deck-chairs-on-the-titanic/
    “…Hillary hails not from the Democratic Party that genuinely cares about America’s staggering wealth and income inequality and the plight of the little guy, but from a grotesquely disfigured hybrid organization informally known as the “Wall Street Democrats.”
    …(and, financial conflicts of interest listed )…
    “In that hybrid organization, money trumps morals, duty to country and the public interest. It is a shrine to crony capitalism, infused with lawyers who believe “it’s legal if you can get away with it.” Just as Wall Street’s watchdogs suffer from regulatory capture, the Wall Street Democrats are afflicted with “cognitive capture,” a polite way of saying public officials covet the wealth they hang around with on Wall Street and expect equal earning power when they pass through the gold-plated revolving door.

    “Hillary’s transparently vapid proposals to tinker around the tattered edges of the Wall Street Democrats’ Dodd-Frank illusion of reforming Wall Street (after two of America’s largest banks became admitted felons just five months ago) rather than breaking up the banks and restoring the Glass-Steagall Act, should instantly disqualify her as a serious candidate for the Oval Office among Democrats who are not afflicted with cognitive capture or the cognitive dissonance of a bifurcated Democratic Party.”

    The article ends referencing Senator Bernie Sanders in the video below:

  29. Published on Jan 18, 2015 FRONYLINE (Part 1)
    Power, Money, and Wall Street : Documentary on The Problems of Wall Street and Big Money
    1. 2014 Education is a fundamental and integral part of our society .

  30. So judging from all the prima facie evidence all these long years since the book was published around which this internet blog gravitates

    there is no difference between the two political parties in regards to POLICY, because only the Federal Reserve Board manufactures the unemployment rate and inflation and interest rates and they are a “private” corporation that manufactures the politicians who write the “laws”

    and they crashed the world economy – “…ooops, my bad…you must forgive us….”.

    So what makes us believe there is going to be an election now that critical mass of awareness of the criminality has been reached among We the People?

    We have to proceed as if there won’t be an election if the FRB’s puppets are not the ones we choose to vote for….

    What are our options?

    When I look at the latest target of psyche ops – the “Millennials”, they will never “own” anything – they have no right to make their life less miserable through honest work. All of their dumbed down debt slave wages are funneled back into paying – for example – for internet and phone access only to be censored by the paid internet trolls and listened to by hidden Patriot Act spooks.

    So paying for a “service” (internet) that seems to exist now only to destroy your life with the flick of a delete button is insane, right? Plus you will NEVER have privacy!

    But, you are told, you MUST be ON the internet and be connected.

    WHY?! What is in it for me? At this point, it is just a dangerous and filthy life destroying path, a gauntlet, to trod through that is ruled by 1%ers who hate us and want to whittle the earth’s population down to – what number? – a population that is also shorn of all experientially earned culture and rule of law. Chauncey Gardeners….just Being There….

    We have no choice. And that leaves us with one choice.

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