Yves here. We’re delighted to see that that financial jihadist Bill Black is still allowed to be on the airwaves. And if you watch Real News Network, please include them in your Christmas list of donations (yes, I need to do that too….this Santa is a bit behind the eight ball).
JAISAL NOOR, PRODUCER, TRNN: Welcome to the Real News Network. I’m Jaisal Noor in Baltimore.
The question of who can best regulate corporations, prevent another economic collapse, and rein in Wall Street is one of the major issues being discussed this election season, at least on the Democratic side. During Saturday’s debate, Hillary Clinton responded to critics saying that she’s too close to Wall Street. Here’s a clip.
HILLARY CLINTON: I think it’s important to point out that about 3 percent of my donations come from people in the finance and investment world. You can go to OpenSecrets.org and check that. I have more donations from students and teachers than I do from people associated with Wall Street.
NOOR: Well, we’re going to take Ms. Clinton up on that and go to OpenSecrets.org reporter Will Tucker. So Will, you are on with us today to respond to what Hillary Clinton said. So you–and you looked at her claim. Tell us what you found.
WILL TUCKER: Well, I did. So I found that Hillary used–essentially she’s correct. She is right, technically. But there’s some conditions with being right. For instance, when she looked at her data she used a pretty bad equation to arrive at the 3 percent number from what we can tell.
So for instance, you know, to put it simply, there’s a breakdown between itemized contributions and unitemized contributions that are reported to the Federal Election Commission by campaigns. And so there’s a big chunk of Hillary’s money, particularly about $15 million, rather, that we don’t have any data on. And she included that in her equation for finding how many contributions she had from the securities and investment industry as well as the commercial banking or [inaud.] commercial banking industry. And that led to a slightly lower percentage than if she had just used the itemized contributions.
NOOR: And so talk about where her donations do come from. She also talked about the fact she says she gets more money from teachers and the education world than from Wall Street.
TUCKER: Well, she does. We’ve actually written here before about teachers and other members of the education industry, their affinity for Hillary Clinton. They give to her at a far greater rate than any other candidate. She gets a lot of money from them. She gets a lot of money from law firms and lawyers. According to our data those are kind of traditional Democratic donor bases.
NOOR: And so talk about how super PACs changed that math that you just discussed.
TUCKER: Well, that’s our big finding. I mean, the real issue is Hillary Clinton’s statement on Saturday was that she was kind of discounting how important super PACs have become to the campaign finance picture. I mean, the securities and investment industry has given about $5.5 million to her super PAC and campaign combined in our data. When you add commercial banks to that, banks like JP Morgan, banks like Bank of America, they’ve given another $450,000 to her campaign.
But including the super PAC contributions raises that, because fewer donors give more money to the super PAC, Priorities USA. Priorities USA that backs Hillary Clinton. We arrive at a higher percentage of contributions from Wall Street, essentially.
NOOR: And you also talk about how Clinton stacks up with her competition. You know, for example, you write that Bernie Sanders gets about $47,000 from the securities and investment industry. Talk about how the Republicans line up, as well.
TUCKER: Well, the Republicans far outpace that. I mean, when you consider super PACs, let’s remember the fact that Jeb Bush has a super PAC out there backing him that raised $103 million in the first half of this year. That’s a ton. The–I can’t remember exact figures on what he’s received from securities and investment in commercial banking, i.e. what we consider to be Wall Street. But I can tell you that it’s far, far higher, we wrote about this in the piece that we wrote yesterday, than what Hillary Clinton received.
NOOR: All right. Well, Tucker, OpenSecrets.org. Thanks so much for joining us.
TUCKER: Thank you.
NOOR: So we’re also joined by Bill Black. He’s a regular for us, associate professor of economics and law at the University of Missouri, Kansas City, white-collar criminologist, and former financial regulator, author of The Best Way to Rob a Bank Is To Own One.
So Bill, we wanted to get your take on this. And we’ll start off by playing some clips from the debate. Hillary Clinton and Bernie Sanders were asked if corporate America would like their presidency.
MODERATOR: Secretary Clinton, I did want to ask you the last time you ran for president, Fortune magazine put you on its cover with the headline Business Loves Hillary, pointing out your support for many CEOs in corporate America. I’m curious. Eight years later, should corporate America love Hillary Clinton?
CLINTON: Everybody should. I have said, I want to be the president for the struggling, the striving, and the successful. I want to make sure the wealthy pay their fair share, which they have not been doing. I want the Buffet rule to be in effect, where millionaires have to pay 30 percent tax rates instead of 10 percent to nothing, in some cases. I want to make sure we rein in the excessive use of political power to feather the nest and support the super-wealthy.
But I also want to create jobs. And I want to be a partner with the private sector. I’m particularly keen on creating jobs in small business. My dad was a small businessman, a really small business. I want to do more to help incentivize and create more small businesses. So if people who are in the private sector know what I stand for, it’s what I fought for as a senator, it’s what I will do as president, and they want to be part of once again building our economy so it works for everybody, more power to them. Because they are the kind of business leaders who understand that if we don’t get the American economy moving and growing, we’re not going to recognize our country, and we’re not going to give our kids the same opportunities that we had.
MODERATOR: Thank you. Senator Sanders, I want to stay on this and ask you, how big a role does corporate America play in a health economy, and will corporate America love a President Sanders?
BERNIE SANDERS: No, I think they won’t. So Hillary and I have a difference. CEOs of large multinationals may like Hillary. They ain’t going to like me. And Wall Street is going to like me even less. And the reason for that is we’ve got to deal with the elephant in the room, which is the greed, recklessness, and illegal behavior on Wall Street.
NOOR: So Bill Black, we heard two visions of how to take on Wall Street, how to fix the economy. What’s your response? Hillary Clinton did say she wants to increase taxes on Wall Street, wants some more regulation, but she wants to partner with Wall Street. You know, you heard Bernie Sanders. He said, you know, Wall Street, the big firms are not going to like his presidency.
BILL BLACK: Right. So the mainstream press and the financial press has been quite clear that Senator Clinton’s play on dealing with Wall Street was received with a very complacent yawn by Wall Street. They don’t find it threatening at all. And it’s nice to say that you’re there for the successful and the struggling, but the people are–and that you’re there for jobs. But the supposedly-successful are the ones who are causing most of America to struggle and are causing, have caused, the largest loss of jobs. Well over 10 million jobs. As a result of the Great Recession.
So you’re going to have to take on Wall Street if you want to restore the American economy. And as you heard from Will, except I would phrase his a little more accurately on, based on his findings, Senator Clinton’s numbers were technically inaccurate and inaccurate in every conceivable way. They were on multiple grounds deliberately designed to understate the influence of Wall Street in terms of finance for her campaign.
NOOR: And before the interview we talked about how Hillary Clinton’s at least donations from Wall Street have, have changed. She gets far less money from Wall Street than she has in the past.
BLACK: That’s true. So now she is in the range of about 7 percent of her total funds that we know about. We’ll explain that there’s some funds we simply can’t allocate at all. About 7 percent comes from finance. More generally, 17 percent of her money is in small contributions of $200 and less. The comparable number for Senator Sanders is 77 percent. So his campaign is almost entirely–well, overwhelmingly funded by small donors. Hers is overwhelmingly funded by larger donors. And by the way, Governor O’Malley is far worse on that. He and Jeb Bush are in the 90-95 percent range of their money coming from large donors.
If you look at the arc of history, where Hillary has been running for major office as senator of New York and for the presidential nomination of the Democratic party previously and this time, her donors were overwhelmingly Wall Street and large commercial banks. And to the extent they weren’t they were the very large law firms who were heavily associated with finance. So she was clearly the candidate of Wall Street. But here’s the amazing thing. After a history that goes back decades of the Clintons being very, very favorable to finance, in particular big finance, for all the money she got, which was huge from finance, in her prior presidential run, she was actually dwarfed by Senator Obama.
Indeed, Senator Obama in the first presidential race accomplished something we didn’t think was possible. He outraised money on Wall Street compared to the Republicans. In other words, the supposedly very liberal Democratic candidate got more money from Wall Street than the Republicans did.
NOOR: And Bill, we’ve had you on over the Obama years. Would you say that money’s paid off? And I also wanted to, I also wanted you to address the plans that Sanders and Clinton has put forward, a little bit more on that, as well.
BLACK: Right. So our joke as regulators, which incorporated a bitter truth, was the highest return on assets for a bank was always a political contribution. And yes, it’s paid off extraordinarily. After all, you’ve had the three greatest most destructive fraud epidemics in history, as I’ve said, the largest cartels by three orders of magnitude in history, by the largest banks. And absolutely nothing fundamental has happened. And indeed none of the senior people, none were removed by the government as regulator, or the government as prosecutor. Just an astonishing thing with no precedent in modern U.S. history.
So yes, the contributions have been very successful. I’ve already mentioned that we had the reaction from Wall Street in the mainstream press, which is that the Hillary plan for finance is exactly what they would love. You know, detailed and completely non-fundamental. So again, it is a continuation of what’s going on.
So the two huge divergences at this juncture–and you know, more may come over the course of the, of the campaign between Senator Clinton and Senator Sanders, have to do with what do you do with the systemically dangerous banks, and what do you do with restoring Glass-Steagall? So Glass-Steagall is simple. You can go very quick, because Glass-Steagall was the law that came out of the Great Depression, that came from the lessons of the frauds and abuses in the Great Depression, that separated what’s called commercial banking, which is when banks make loans, from investment banking, which is when banks take an ownership position. And we both realized investment banking was much more dangerous and we recognized there was a conflict of interest, and we recognized if we’re going to give deposit insurance, which is a federal subsidy, it was insane to subsidize some commercial businesses. Remember, you can own a business and you can have a federal subsidy to compete with other places. Well, that made no sense.
So we adopted Glass-Steagall, and it worked brilliantly for 50 years, and then the Clinton administration, in league with the Republicans, at the behest of CitiCorp in particular, but you know, just as the leading force among the banks, got rid of Glass-Steagall. And you would have thought that given how well Glass-Steagall had worked, given this massive crisis we’ve gone through, that the Dodd-Frank bill would have had, you know, twelve words in it, that said Glass-Steagall is hereby restored. Instead they did no such thing, and Bernie Sanders says bring back Glass-Steagall, and Hillary Clinton and Bill Clinton are still saying no, no, no, no. We’ve got to get rid of Glass-Steagall, because our banks have to be able to compete with the German and the UK banks that can do all these things, even though doing all these things led the German and the UK banks to suffer massive losses.
So this is the same thing that your mother taught you when you said that you did it because Johnny did it. And she says, and if Johnny jumped off, you know, a building, would you jump off a building? Well, Senator Clinton says yep, we’ve got to jump off the building again.
NOOR: And Bill, I wanted to ask you one last quick question. You know, one of the criticisms that the Sanders campaign has received is that with a Republican-controlled Congress, you know, what he’s–even if he’s elected, how much of this, how much of these policies can he push, you know, how much of these policies can he get passed? And it’s likely that if Obama can’t pass, won’t pass Glass-Steagall through this Congress–or I guess he didn’t even want to. But the question is, what unilateral action can Sanders take to rein the banks in?
BLACK: Okay. So there’s a 100 percent failure rate if you don’t try.
NOOR: Right. Exactly.
BLACK: And that’s what Obama did, and that’s what Hillary Clinton [is] promising to do. You can bring back much of Glass-Steagall by regulation. And Bernie Sanders is the only candidate, period, from any party that is pledged to do that. The other thing is simply the too big to fail banks and Hillary Clinton wants to keep them, and Senator Sanders says this is insane. We are rolling dice. I mean, the definition of one of these banks is when, not if, when the next one fails, it will likely cause a global financial crisis.
So why not shrink them to the point where they no longer pose a global crisis when they fail? We know that when you make them this big they get another implicit federal subsidy, which makes life bad, and we know that they make true democracy impossible for the reasons we’ve talked about earlier, in terms of the inevitable political power when you allow entities to become this large. So that’s the other major difference.
NOOR: Bill Black, we want to thank you for joining us. Bill Black is a white-collar criminologist, former financial regulator, author of The Best Way to Rob a Bank Is To Own One. Thanks so much, Bill. Appreciate it.
BLACK: Thank you.
NOOR: Thank you for joining us at the Real News Network.
“Give me control of a nation’s money supply, and I care not who makes its laws.” –Rothschild in 1744.
Good thing the control lies with Congress then.
The BoE may have something to say about that.
I don’t know the unique particulars of how the British fiat system operates, but banks in the US first have money added to their accounts by the Federal Reserve before giving it out as loans. And the setting of Federal budgets is entirely under Congressional control. The Federal Reserve is ultimately accountable to Congress (which delegates it its power) and the Senate (which approves the board members). The Treasury is supposed to have a lot of say in what the Fed does as well. In practice none of this means much because the Fed is pretty much allowed to do whatever it wants, but still.
“Hillary Clinton and Bill Clinton are still saying no, no, no, no. We’ve got to get rid of Glass-Steagall, because our banks have to be able to compete with the German and the UK banks that can do all these things, even though doing all these things led the German and the UK banks to suffer massive losses.”
And as I recall at least deutsche bank got bailed out by the u.s. or the fed somehow…
Of course no discussion of Hillary’s influences would be complete without mentioning all those bribes, er, speaking fees that she has received from corporations and trade groups.It’s dubious you could learn anything from a speech that wasn’t already in her poorly selling book. So even if campaign finance were reformed there are other forms of legal graft that our public officials (and for that matter some journalists) have latched onto.
+1 for bringing up speaking fees. HRC raked in tons of speaking fee cash for her role promoting the TPP.
“What Influence Does Wall Street Have Over Candidates Clinton and Sanders?”
In order, the answers are: “complete” and “negligible”, respectively.
If it seems as sure as the sun will shine, a systemically dangerous TBTF bank will fail causing an equal if not greater global economic calamity, then not so much the government authorities, but even more so, alternative political factions, The Green Party and a shadow policy groups should be formulating emergency recovery policies now.
It seems that many of the discussions that go on here about finance, regulations and structural reforms to the Fed and the US Treasury can be in that category. Not to mention the cross postings from INET, Occupy work groups, among others. Not being a major math dude, my assessment of valid modeling for policies may fall short, but not the overall need for a Glass-Steagall redux, and other policies to replace the disaster prone ones we have now. A political platform of specific policies, written up like lobbyist have written model legislation handed over to legislators to enact with some boiler plate changes. I’ve seen the S&L crisis and the Wall St collapse of 2008 and know with capitalism at this stage of instability, as the Real News said and others here agree, it is just a matter of time, and we don’t mean 20 or 30 years from now.
What is the model platform of political legislation for banking and finance as well political finance that is necessary to enact when the next crisis offers an open window to do so?
I’m not exactly sure I’d want occupy working groups to write model legislation for banking regulations (can anyone say ‘color revolution’?), but something coming from a coalition of heterodox economists in academia would probably have a little more credibility.
Occupy actually wrote up an excellent model for regulation. Better than any other I’ve seen yet.
“We’ve got to get rid of Glass-Steagall, because our banks have to be able to compete with the German and the UK banks that can do all these things” Yeah, to play the “global competitiveness” game you gotta be cheaper, dirtier, more reckless and more too big to fail that all the other kids on the block. Idiots win until idiots take everybody down.
Indeed. And yet, one must remember that campaign contributions are only a part of how big money buys corrupt politicians like Hillary Clinton. There are also:
1. Media spin. The Corporate press is a monolithic enterprise that reads from a single script – and if the rich and powerful like you, you get good press. So Hillary Clinton could probably instigate the deliberate destruction of a prosperous and stable nation, resulting in the immediate deaths of hundreds of thousands the the immiseration of many tens of millions more, and still get treated as a ‘liberal’ and a decent person. Wait, that’s already happened. Meanwhile the message of a Nader or Sanders gets buried and ignored… It would cost billions to buy this sort of coverage, consider it payment in kind.
2. Bribes. Politicians don’t just like contributions to their official campaigns – they like cash in their own personal pockets. All that speaking money that the Clintons have gotten paid for by Wall Street etc. should surely count as money that Wall Street is using to buy them…
Op-Ed by Bernie Sanders at the New York Times (December 23, 2015) To Rein In Wall Street, Fix the Fed
Larry Summers in response to Bernie Sanders’ Op-Ed (December 29, 2015)