By Pam Martens and Russ Martens: April 15, 2016
Hillary Clinton Tells Senator Bernie Sanders That There’s No Evidence She Can Be Swayed by Wall Street Money During CNN Debate, April 14, 2016
During the series of Democratic debates, including the one last night hosted by CNN, Hillary Clinton has repeatedly trumpeted the record of President Obama in signing tough legislation to rein in Wall Street abuses when questioned on her money spigot flowing from Wall Street. According to her logic, since Obama’s campaign and his Super Pacs took plenty of money from Wall Street and went ahead and enacted tough Dodd-Frank reform legislation, why should her integrity be questioned.
Early in last night’s debate, when Sanders raised the fact that she and a Super Pac supporting her have taken $15 million from Wall Street, Clinton had this to say:
“Well, make — make no mistake about it, this is not just an attack on me, it’s an attack on President Obama. President Obama…You know, let me tell you why. You may not like the answer, but I’ll tell you why. President Obama had a super PAC when he ran. President Obama took tens of millions of dollars from contributors. And President Obama was not at all influenced when he made the decision to pass and sign Dodd-Frank, the toughest regulations on Wall Street in many a year. So this is — this is a phony — this is a phony attack that is designed to raise questions when there is no evidence or support, to undergird the continuation that he is putting forward in these attacks.”
This is a highly dangerous quagmire of quicksand for Hillary Clinton to stand on. It will only work if she can turn out millions of low information voters in the remaining state primaries. Unfortunately for her, Senator Bernie Sanders is drawing tens of thousands of newly engaged voters to his high information rallies and speeches and millions more to his high information campaign web site.
What has remained unsaid in this debate cycle is that Dodd-Frank is the antithesis of financial reform with teeth and provided no real cops on the beat. Dodd-Frank is, in fact, the very evidence that Hillary says doesn’t exist to show that Wall Street bought itself a boatload of cozy deals from Obama in exchange for its cash windfall to his campaign.
When Obama took office in January 2009, Democrats controlled both houses of Congress. At that point, Obama had two years to use his bully pulpit to enact meaningful legislation and put real cops on the beat. What did Dodd-Frank do instead? It gave increased authority to the Federal Reserve, the very regulator whose crony ties to Wall Street had prevented it from reining in the abuses that led to the 2008 crash. Just how ludicrous that structure was came into focus in 2012 when Jamie Dimon, Chairman and CEO of JPMorgan Chase, was sitting on the Board of Directors of the Federal Reserve Bank of New York as his bank was being investigated by the Fed for gambling in derivatives with depositor funds and losing $6.2 billion.
While all of this was happening at JPMorgan, Bill Dudley was serving as the President of the New York Fed and his wife, Ann Darby, a former Vice President at JPMorgan,was receiving approximately $190,000 per year in deferred compensation from JPMorgan.
The Federal Reserve cares so little about its role as the regulator of the mega Wall Street bank holding companies that it has ignored the 2010 Dodd-Frank legislation that required it to hire a Vice Chair for Supervision of the banks. It’s almost six years since Obama signed the legislation into law and yet this position remains unfilled – with not a word of objection from the President of the United States.
Not only did Dodd-Frank fail to end future taxpayer bailouts of the mega banks, as stated just this week by the Vice Chair of the Federal Deposit Insurance Corporation Thomas Hoenig on the occasion of three of the five largest banks in the country flunking their regulatory plans to unwind in a crisis without taxpayer assistance, but the largest banks have moved beyond the frauds perpetrated during the crisis to serial new frauds — like rigging the interest rate benchmark known as Libor, and manipulating physical commodities markets and electric markets. In May of last year, for the first time in U.S. history, two of the nation’s largest banks, JPMorgan Chase and Citigroup, admitted to felony counts related to rigging the foreign currency markets.
And exactly what was it that President Obama ended with the Dodd-Frank law that Hillary finds so inspiring? The Wall Street mega banks have gotten materially bigger since the crash. Wall Street’s former lawyers sit in the top seats at the SEC and only recently exited the Justice Department’s top posts, ensuring that no bank executives went to jail over their role in the crash.
The rating agencies are still taking Wall Street’s dough and handing out ratings. Wall Street CEO pay and bonuses are still obscene: For the year 2015, in which JPMorgan received its third criminal felony count in two years time and settled more multi-billion-dollar charges with regulators, costing shareholders $35 billion over the prior four years, the bank’s CEO, Jamie Dimon, who had been at the helm during this crime spree received a pay boost of 35 percent or $27 million in total compensation. It’s not just that the business model of Wall Street is fraud, as Senator Sanders is prone to say, it’s that fraud is now incentivized openly on Wall Street by the Board of Directors of the country’s largest banks.
No caring American or engaged citizen should view this election casually.
