Yesterday Hillary Clinton’s camp attacked Bernie Sanders’ ideas for progressive banking reform, claiming that Clinton’s approach to reform is actually more progressive and more thorough than Sanders’.
Senator Sanders should go beyond his existing plans for reforming Wall Street and endorse Hillary Clinton’s tough, comprehensive proposals to rein in risky behavior within the shadow banking sector.
Salon reported on the audacity of this, calling the claim “bold, brash and wholly false.”
The comments came as a shock and raised many eyebrows. Sanders’ “break up the banks” rhetoric is central to his campaign and one of the key reasons many Sanders supporters back the Vermont senator so passionately. As a long time Independent who has no ties to Wall Street, and who funded his campaign by seeking donations from ordinary voters, Sanders is seen as a once-in-a-blue-moon — perhaps once in a lifetime — chance for the American people to elect a president who will not enter the White House with a big back-catalog of favors he needs to do for corporate donors.
Forbes reports that, far from outdoing Sanders, Clinton has come up with a set of policy ideas that totally “miss the mark.”
Clinton has repeatedly told her supporters and the media that her ideas are superior to Sanders’ because she intends to fight the “shadow banking” industry — all those institutions that do not call themselves “banks” but play a critical role in the financial sector, like hedge funds, investment banks and insurance companies. Clinton’s goal here is to paint Sanders as “soft” — to suggest that, for all his soaring rhetoric, Sanders’ ideas will not lead to real change because his definition of “bank” is too narrow and he is blind to a whole sector of financial activity where the real problems fester.
According to Huffington Post, Clinton’s people told reporters that:
“Any plan to further reform our financial system must include strong provisions to tackle risks in the ‘shadow banking’ sector, which remains a critical source of potential instability in our economy. This includes certain activities of hedge funds, investment banks like the now-defunct Lehman Brothers, and insurance companies like AIG. Unfortunately, Senator Sanders has so far taken a hands-off approach to some of the riskiest institutions and activities in our economy, which were among the biggest culprits during the 2008 crisis.”
Salon claims this is false, saying that “no one seriously believes that [Sanders’] call to break up “banks” would exclude massive insurance or investment houses.”
Clinton often cites insurance company AIG and Lehman Brothers as potentially-destabilizing institutions that would not be broken up under Bernie Sanders’ plan, thus rendering his plan weak and taking away the progressive merit Bernie supporters look for.
In other words, Clinton thinks AIG and Lehman are “cases where break-the-banks-up reform won’t work.”
Clinton is missing something, though. Huffington Post has pointed out that, in fact, “Sanders’ plan would have forced the companies to split up their activities” because both AIG and Lehman run traditional banking units, and this fit Sanders’ definition.
Bernie Sanders’ line is clear, simple, and sweeping: “break up the banks.” The slogan was coined and used by Sanders and his campaign because it is short and sharp (like the “Yes we can!” slogan Obama used when he bested Hillary to ride to the White House in 2008) but that does not mean his policy stance is simplistic.
In public parlance, “banks” means financial institutions, and Clinton is probably aware of this. Salon accuses Clinton of trying to fool the American people:
With a plan ten times the length of Sanders’, Clinton is plainly and simply attempting to fool the American people with “a long list of ‘regulatory enhancements.” In reality, Clinton does not have a “tough” plan for reigning in Wall Street, but “a laundry list of marginally better-than-nothing reforms..”
Is Hillary Clinton trying to fool the American people? Will Bernie Sanders be president?
(Image by AP Photo/Mary Schwalm)