The Atlantic: Hillary Clinton’s Weak Plans for Changing Wall Street

[portlander23]

The Atlantic: Hillary Clinton’s Weak Plans for Changing Wall Street

The 2008 financial crisis handed Barack Obama a clear mandate to fix a broken system. But Obama and his key economic advisers, Tim Geithner and Larry Summers, didn’t opt to go that route. Instead of undertaking structural reform, they proposed a long list of incremental improvements that eventually became the Dodd-Frank Act.

Seven years later, with her new proposals to reform Wall Street, Hillary Clinton is sticking with that strategy. There is plenty to feel vaguely positive about in Clinton’s plan: Tax high-frequency trading! Close the Volcker Rule loophole! Require firms to admit wrongdoing when agreeing to sweetheart settlements! Increase the maximum penalties that regulators can impose! What’s not to like?

Let’s start with what the Clinton plan isn’t. In less than two years, Franklin Delano Roosevelt passed the Glass-Steagall Act, the Securities Act, the Securities Exchange Act, and the Federal Housing Act—defining pieces of legislation that overhauled the regulatory framework for mortgage lending, banking, and the securities markets.

It sure sounds good, though—which is the whole point. Clinton is losing ground to Bernie Sanders, of all people, whose biggest political asset is his willingness to say what he actually believes.

In the end, the Clinton plan looks like a laundry list of marginally better-than-nothing reforms that are likely to vanish into an abyss of rule-writing and regulatory dithering. If she wanted to position herself as the heir to President Obama—who talked a good game while leaving Wall Street largely as he found it—she couldn’t have done a better job.

Related:

Paula Dwyer: Clinton's plan on Wall Street protects husband's legacy

Sirota and Perez: Hillary Clinton's Wall Street Policy Being Shaped By Two Bankers

Yahoo Politics: Hillary Clinton doesn’t support revival of Glass-Steagall Act

Democracy Now!: Robert Reich on Glass-Steagall and Bernie Sanders

Clinton: Cooperation, not speeches, is needed to regulate Wall Street

[JaneyVee]

1. Bernie's non-existent plan will show Wall Street who's boss!

[djean111]

2. Here ya go!

http://feelthebern.org/bernie-sanders-on-financial-regulation/

[99Forever]

4. Ut oh!

Well that didn't go quite like Janey had planned.

[JaneyVee]

6. That impressed you?

Weak. Glass Steagall and tax transactions. How "revolutionary". Hillary has a 15 point plan.

[99Forever]

9. ...

Yeah sure.

Hillary is gonna give a severe beatdown to her BFFs and biggest backers!


Bwahahahahahahhahahhaha...

... please stop...

....you're fucking cracking me up!!!!!

[JaneyVee]

14. Hillary's biggest donors are unions.

[Exilednight]

19. No they're not. Here's her biggest donors.

Akin, Gump et al $125,598
Blackstone Group $57,700
Centene Corp $67,150
Creative Artists Agency $88,501
DLA Piper $72,500
Google Inc $58,021
Harvard University $61,080
JPMorgan Chase & Co $75,537
Latham & Watkins $94,580
Morgan & Morgan $274,767
Morgan Stanley $90,799
Munger, Tolles & Olson $72,850
Paul, Weiss et al $60,500
Simpson, Thacher & Bartlett $69,550
Skadden, Arps et al $62,650
Sullivan & Cromwell $148,100
Time Warner $87,835
University of California

[JaneyVee]

22. Here's a better analysis:

http://m.dailykos.com/story/2015/08/07/1409515/-Setting-the-Record-Straight-Hillary-Clinton-s-Campaign-Donors

[Exilednight]

23. So your argument to refute my posting is a blog post from a supporter?

Bless your heart.

[JaneyVee]

28. It uses FEC filings. Doesn't get much more transparent than actual FEC filings.

[Exilednight]

31. It's a link to DailyKos blog with no link to support data.

[99Forever]

25. Another fucking lie.

Cripes, you must think you're dealing with idiots.

[JaneyVee]

29. Which is the lie?

[840high]

32. No.

[hifiguy]

13. The writing and implementation of which

will be outsourced to Goldman and Citi.

[JaneyVee]

15. It has already been released and was written by Wall Street watchdogs.

[Uncle Joe]

18. "Wall Street Watchdogs?"

This is technocratic incrementalism, the idea that the best way to approach a very big problem—a complex, interconnected financial system anchored by large banks that are so poorly managed they are not even aware of the risks they are taking on—is with better disclosure here and stronger incentives there. That was the philosophy of Dodd-Frank, which, with the exception of the Consumer Financial Protection Bureau, largely amounted to giving existing regulators a handful of complicated new tools (living wills, hedge fund registration, the Office of Financial Research, derivatives clearinghouse regulation, and so on). Now Clinton is offering more of the same.

But what about the large, highly interconnected banks whose failure cost 8 million jobs and trillions of dollars of lost output? Here Clinton offers two promising-sounding ideas. One is to charge a “risk fee” on large banks that rely on volatile short-term funding, which could evaporate in a crisis. The other is to give regulators the power to force large financial institutions to “reorganize, downsize, or break apart” if they cannot manage themselves effectively.


Unfortunately, there’s less here than meets the eye. The Federal Reserve and the Financial Stability Oversight Council can already force a large financial institution to scale back its operations if it poses a grave risk to the financial system. (That’s the Kanjorski Amendment, or Section 121 of the Dodd-Frank Act). And per Dodd-Frank, regulators also have the power to make life difficult for systemically important financial institutions in all sorts of ways—they can impose capital requirements, leverage limits, liquidity requirements, disclosures, or short-term debt limits. (For the most part, though, these tools haven’t been widely used.) In short, when it comes to too-big-to-fail banks, Clinton is proposing very little beyond what currently exists—nor does she explain how she will get regulators to use the powers they already have.

http://www.theatlantic.com/business/archive/2015/10/hillary-clintons-wall-street-plan/409873/

As for "details," you can paint a house, put new carpeting in, install a new roof, new heat and air conditioning, landscape it to the tenth degree, put granite counter tops in a newly remodeled kitchen, new hardwood floors, energy efficient windows, and put a nice hot tub on an over sized deck but if your house is sitting on a sink hole it's all for nothing.

[JaneyVee]

5. Hillary's plan seems far more detailed.

Reinstate Glass-Steagall and tax transactions and I'm supposed to take it serious? And the site is not from the campaign, so it's just speculation. Has he released a bold plan yet or not?

[djean111]

7. And Hillary's plan is seen as weaker. Go figure.

In any event, I suspect you would have the same opinion if Bernie's plan had 500 points. Since you seem to think that "number of points" is the real important thing.
And, really, no one is asking you to take it seriously, since you are a Hillary supporter anyway. You just moved the goalposts from the place where you said his plan was "non-existent", which is par for the course.

[JaneyVee]

10. Actually, I haven't moved the goalposts.

I asked for a detailed policy proposal and no one seems to find one. A link to 2 items from a site not affiliated with the campaign seems a bit lacking. Like I said below, as someone who does economics for a living, I like to see actual numbers and policy.

We're on each others team.

[djean111]

17. ""Bernie's non-existent plan will show Wall Street who's boss!""

Aaaand - we are done with this.

[daleanime]

3. Well, let's face it, you just can't count on Bernie....

to provide detail plans about what he wants to do......


Have a great night anyways!

[JaneyVee]

8. I'm a fan of comparing and contrasting policy proposals.

I do economics for a living, so I like seeing actual numbers. Looking forward to one day reading Sanders' policy proposal on this. It's pretty shocking that for all his talk about Wall Street he has still yet to offer any concrete proposals.

[daleanime]

11. Compared to?

[JaneyVee]

12. All candidates who release policy proposals.

[daleanime]

21. Yea for more 'incentives'.....

[Exilednight]

20. If you're an economist then please explain

In detail how you believe that Glass-Stiegel would not prevent another fiasco like the Great Recession.

From one economist to another, this should be easy.

[JaneyVee]

24. Example: How many small banks tanked? Thousands.

Example 2: Bear Stearns, an investment bank that did not do commercial banking.

This is not to say reinstating GS wouldn't help limit risk, it would, but hardly a silver bullet, and certainly would not have prevented the 2008 meltdown.

[Exilednight]

26. Thanks for the generic answer that can be found

On any non-economics website.

It's proof that many really don't understand what happened or which forces were at work. If you did understand it, then you would know that BS was involved in commercial banking, albeit under a subsidiary, which if GS were not repealed then it would not have been allowed.

Thoughts? Explanations?

[JaneyVee]

27. "Under a subsidiary" is exactly why it wouldn't have prevented a meltdown.

Bear Stearns broke up their own bank. I'm not arguing against a reinstatement of GS, I'm saying it's not a silver bullet. Market regulation would have to go further. I'm just looking for candidate proposals to compare/contrast.

[Exilednight]

30. I can't debate someone who claims to be an economist, but doesn't

even understand what happened, or for that matter basic laws that govern economic policy and banks.

Pleasure talking with you.

[JaneyVee]

33. There's really nothing to debate.

I am not arguing against reinstating GS, I am saying it would not have prevented the financial crash of 2008, and certainly not a silver bullet. There were numerous factors and red flags.

You have yet to add anything to this "debate", lets hear your side.

[Uncle Joe]

16. Kicked and recommended.

Thanks for the thread, portlander.

[magical thyme]

34. K&R