2016 Postmortem

portlander23

(2,078 posts) Fri Oct 9, 2015, 04:03 PM Oct 2015

Time: Hillary Clinton’s Wall Street Reform Wins Mixed Support From the Left

Clinton’s new proposals are being closely watched by Wall Street and liberal banking reform advocates, who are skeptical of the former Secretary of State’s relationship with banking institutions. She has spoken often at events sponsored by Goldman Sachs, Citibank, and JPMorgan Chase, and she and Bill Clinton have accepted millions in speaking fees from major Wall Street institutions.

But even before the full details of Clinton’s plan had been announced, liberal critics were accusing her of backing away from a central issue: reinstating the Glass-Steagall Act, a Depression-era law that created a “firewall” between normal commercial banking and riskier investment banks.

The law was originally passed in 1933 and intended to protect taxpayer dollars and individual commercial bank deposits from high risk. Some economists argue that Glass-Steagall’s repeal under President Bill Clinton put the banking system at risk ahead of the 2007-2008 financial crisis.

“In a lot of ways it was stronger than what I expected from her given her close Wall Street ties,” economist Dean Baker said about Clinton’s plan. But, he added, “I would like to go back to Glass-Steagall to have the strict separation” between commercial and investment banking.

Vermont Sen. Bernie Sanders, the most serious threat to Clinton’s nomination, has voiced strong support for a bill introduced by Sens. Elizabeth Warren and John McCain to reinstate a version of Glass-Steagall.

“Given the image of big banks today, it is easy now to take on Wall Street. I was there when it was not so popular,” said Sanders, who opposed the push to repeal Glass-Steagall in 1999. “I was proud to lead the fight in the House against repealing the Glass-Steagall Act. I predicted then that such a massive deregulation of the financial services industry would seriously harm the economy.”

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