Matt Yglesias has a piece that compares Bernie vs. Hillary on financial reform that underscores a point I've made previously.
You can argue that Bernie is further Left than HRC but he is decidedly not on her level as a policy wonk, He doesn't so much get into the weeds as he just continues to repeat his stump speech.
He says the same thing again and again in exactly the same way. He only has a couple of big issues that really animate him-economic inequality and finance reform.
Yet even on finance reform, his proposals-and his main proposal is simply reinserting Glass Steagall and not letting banks get beyond a certain size-are less about reducing financial risk than about the feeling that banks have too much power in our economy and society; ie, finance reform is still really about inequality.
Check out for instance an exchange between his and Hilary's campaign last week:
"Hillary Clinton's presidential campaign did something a little unexpected early this week in advance of an expected Bernie Sanders speech on Wall Street reform — it tried to hit Sanders from the left by having campaign chief financial officer Gary Gensler accuse him of taking "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." Sanders fired back through a spokesperson, Michael Briggs, who sniffed that the Vermont senator "won't be taking advice on how to regulate Wall Street from a former Goldman Sachs partner."
Now notice something: this jibe on Gensler probably would be a crowdpleaser at a Bernie rally, but it's actually unresponsive to Gensler's actual argument-that to reduce financial risk like what we had in 2008, you have to go after the shadow banking system.
And Gensler was once a Goldman Sachs partner, it's true, but he also has done a lot of work in regulating bank risk:
"But while it's certainly true that Gensler used to work at Goldman Sachs, he's better known in policy circles for his more recent job chairing the Commodity Futures Regulatory Commission in the Obama administration, a vantage point from which he became a hero to many financial reformers by clashing with Tim Geithner and Larry Summers over a desire for stricter rules for Wall Street."
You can argue that Bernie is further Left than HRC but he is decidedly not on her level as a policy wonk, He doesn't so much get into the weeds as he just continues to repeat his stump speech.
He says the same thing again and again in exactly the same way. He only has a couple of big issues that really animate him-economic inequality and finance reform.
Yet even on finance reform, his proposals-and his main proposal is simply reinserting Glass Steagall and not letting banks get beyond a certain size-are less about reducing financial risk than about the feeling that banks have too much power in our economy and society; ie, finance reform is still really about inequality.
Check out for instance an exchange between his and Hilary's campaign last week:
"Hillary Clinton's presidential campaign did something a little unexpected early this week in advance of an expected Bernie Sanders speech on Wall Street reform — it tried to hit Sanders from the left by having campaign chief financial officer Gary Gensler accuse him of taking "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." Sanders fired back through a spokesperson, Michael Briggs, who sniffed that the Vermont senator "won't be taking advice on how to regulate Wall Street from a former Goldman Sachs partner."
http://www.vox.com/2016/1/7/10725422/clinton-sanders-shadow-bank
Now notice something: this jibe on Gensler probably would be a crowdpleaser at a Bernie rally, but it's actually unresponsive to Gensler's actual argument-that to reduce financial risk like what we had in 2008, you have to go after the shadow banking system.
And Gensler was once a Goldman Sachs partner, it's true, but he also has done a lot of work in regulating bank risk:
"But while it's certainly true that Gensler used to work at Goldman Sachs, he's better known in policy circles for his more recent job chairing the Commodity Futures Regulatory Commission in the Obama administration, a vantage point from which he became a hero to many financial reformers by clashing with Tim Geithner and Larry Summers over a desire for stricter rules for Wall Street."
At one of the debates when Hillary mentioned shadow banking, Bernie's answer was to ignore the point and instead point out that she has had this or that financial donor which is again not at all responsive. This is because Bernie has the pleasing stump speech slogans about 'breaking up the big banks' but Hillary as on most issues, has done more of the actual policy work to know what needs to be done.
"The way the Sanders-Clinton spat started was that months ago Sanders came out in favor of two very tough rules on traditional banks. First, he favors a return to an old part of a Depression-era banking law called Glass-Steagall, which was repealed in the 1990s and said that a bank can't be part of a company that offers non-bank financial services like insurance or investment banking. (If you're confused by the fact that investment banks are not banks, that is because the terminology is genuinely confusing — you're not missing anything.) Second, he favors a hard limit on the overall size to which a bank can grow."
"Hillary Clinton, fitting her more moderate persona, declined to endorse either of those proposals. But she is also more of a policy wonk than Sanders, and her campaign has a bigger policy apparatus, so her financial regulation plan is considerably more comprehensive than Sanders's and addresses issues — like shadow banking — that are outside the scope of Sanders's proposals. That became Clinton's opportunity to argue that her plan is actually tougher than his — that he would, in effect, let shadow banks off the hook."
"Sanders's regulatory proposals would have touched these institutions, but they wouldn't have necessarily solved the problem or eliminated the need for shadow banks to be regulated as such."
"All of this is to say that the Clinton camp's main argument against Sanders is that breaking up big banks is insufficient to the challenge of adequately regulating the financial system."
"The counterargument from Sanders's camp really rests on another point entirely. He is focused, as he often is, less on specific points of policy implementation than on big questions of political economy. He says that large financial institutions "have acquired too much economic and political power, endangering our economy and our political process."
"In keeping with this focus on power rather than bank risk, Sanders also touts his co-sponsorship of a bill that would ban the current practice at many banks of paying executives a special exit bonus if they leave to take a job with the government. Sanders sees those bonuses as implicitly corrupt and as part of a problematic revolving door whereby wealthy financial interests exercise undue influence over the political process."
"But this particular bill aside, it's obviously difficult to piecemeal ban every possible way through which large banks can influence the political process. Better to smash them all at once, so that it's simply not possible for any one institution to wield the kind of influence a Goldman Sachs or a JP Morgan currently can."
"This in part reflects longstanding disagreements over the bank bailouts of 2008."
"One view — certainly Clinton's view and the Obama administration's view — is that distasteful as these bailouts were, they would also be necessary and correct actions to take given the circumstances. Their hope is that an improved regulatory framework will make future crises less likely and future bailouts unnecessary. Sanders, by contrast, voted against bailouts on several occasions — a clear indication that he never thought they were necessary."
"To Clinton, the bailouts were made necessary by inadequate bank regulation, so she is proposing to improve bank regulation."
"To Sanders, unnecessary bailouts were made possible by excessive bank political power, so he proposing to cut banks down to size."
"The way the Sanders-Clinton spat started was that months ago Sanders came out in favor of two very tough rules on traditional banks. First, he favors a return to an old part of a Depression-era banking law called Glass-Steagall, which was repealed in the 1990s and said that a bank can't be part of a company that offers non-bank financial services like insurance or investment banking. (If you're confused by the fact that investment banks are not banks, that is because the terminology is genuinely confusing — you're not missing anything.) Second, he favors a hard limit on the overall size to which a bank can grow."
"Hillary Clinton, fitting her more moderate persona, declined to endorse either of those proposals. But she is also more of a policy wonk than Sanders, and her campaign has a bigger policy apparatus, so her financial regulation plan is considerably more comprehensive than Sanders's and addresses issues — like shadow banking — that are outside the scope of Sanders's proposals. That became Clinton's opportunity to argue that her plan is actually tougher than his — that he would, in effect, let shadow banks off the hook."
Again, Bernie's plan is less about reducing financial risk and more about reducing the power of banks in society.
"All of this is to say that the Clinton camp's main argument against Sanders is that breaking up big banks is insufficient to the challenge of adequately regulating the financial system."
"The counterargument from Sanders's camp really rests on another point entirely. He is focused, as he often is, less on specific points of policy implementation than on big questions of political economy. He says that large financial institutions "have acquired too much economic and political power, endangering our economy and our political process."
"In keeping with this focus on power rather than bank risk, Sanders also touts his co-sponsorship of a bill that would ban the current practice at many banks of paying executives a special exit bonus if they leave to take a job with the government. Sanders sees those bonuses as implicitly corrupt and as part of a problematic revolving door whereby wealthy financial interests exercise undue influence over the political process."
So in a sense the focus of Bernie vs. Hillary's proposals are different. Her's is how to specifically decrease bank risk. His is more about the issue of reducing the political power of the banks than anything else.
Not surprising, Hillary is a liberal reformer while Bernie is a structuralist.
"This in part reflects longstanding disagreements over the bank bailouts of 2008."
"One view — certainly Clinton's view and the Obama administration's view — is that distasteful as these bailouts were, they would also be necessary and correct actions to take given the circumstances. Their hope is that an improved regulatory framework will make future crises less likely and future bailouts unnecessary. Sanders, by contrast, voted against bailouts on several occasions — a clear indication that he never thought they were necessary."
"To Clinton, the bailouts were made necessary by inadequate bank regulation, so she is proposing to improve bank regulation."
"To Sanders, unnecessary bailouts were made possible by excessive bank political power, so he proposing to cut banks down to size."
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