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Hillary, Bernie, and the Banks


#1

Hillary, Bernie, and the Banks

Robert Reich

Giant Wall Street banks continue to threaten the wellbeing of millions of Americans, but what to do?

Bernie Sanders says break them up and resurrect the Glass-Steagall Act that once separated investment from commercial banking.

Hillary Clinton says charge them a bit more and oversee them more carefully.

Most Republicans say don’t worry.


#2

The whole financial system is so suffused in graft and corruption that it resembles a house of cards. If the typical bank only requires 10% of the assets it "rents out" in the form of loans, this particular form of corruption keeps the con going so long as ALL depositors (which are magically morphed into creditors once their $ is "given" to a bank to hold) don't ask for their money at the same time.

I've recently learned that a similar system prevails when it comes to the purchase of gold and silver stocks. The stocks are sold to far more persons than there are gold or silver supplies to pay... should all ask for "their" assets at the same time.

Those who used lobbyists' influence and money to pass the laws that eviscerated the Glass Steagall Act knew what they were doing. They gamed the system, threatened that if banks failed they would pull the entire economy down with them, and set a precedent that put taxpayers into the hot seat.

The fact that NOTHING was done to close the leaks IS criminal; and the criminality is apparent in the fact that now these same banks manage 45% of the economy. This is a FAKE economy based on bets on loans rather than on actual products, services, and natural resources. And this FAKE economy--which Catherine Austin Fitts properly defines as a tapeworm--has devoured its own host.

Talk among the financial cognoscenti is that this bubble has been made with the covert knowledge that the numbers ($) it's rung up can NEVER be repaid. What these savvy individuals see happening is a gigantic "reset." In this scenario, paper money will lose its assigned value and the whole system will be recalibrated. Some experts recommend paying off what debt one has--presuming that they can, while others think some kind of gigantic debt jubilee will occur wiping out what so many owe. However, this type of scenario favors the really big borrowers--including these lawless banks--who get away scot-free with the TRILLIONS funneled into them through games of casino-like economics that THEY themselves engineered.

It is a mess... and it will get worse.

Meanwhile, the greater treasure--that of balanced and operational ecosystems--is under graver threat. When water runs out, a pound of dollar bills means nothing.


#3

So true, and a repetition of history. Did anyone really think that Glass-Steagall, which was essential to correcting the bank failures of the Great Depression, was no longer relevant? "Those who do not learn the lessons of history...," anyone?

Good for you, Bernie, for the common sense and the courage to advocate the obvious!

I'm no historian, but even I have read that a "financialized" economy is a precursor of the systemic breakdown of a capitalist economy. Yet the inertia in Washington (and New York) is in the opposite direction. One way or another, that trend will end. It could be really ugly, it will certainly be unpredictable, or, if rational minds prevail, it could be reined-in. A financial transaction tax would be a good start.

Show of hands: Who is more likely to advocate a tax on speculative financial transactions - Bernie or Hillary?


#4

Mr Reich:

Credit default swaps are deeply related to the derivatives market, and that too needs regulation and the trades need to be public. Hiding derivatives trading is another sin of Bill Clinton's financial deregulation.

The point: This is entirely separate from a modern Glass-Steagall.

And it needs to be discussed.

Derivatives trading backed by fake insurance (credit default swaps) is what tanked the economy in 2008, not simply the fact that banks were too big and mixed trading with deposits.


#5

Also throw the criminal banksters in jail to deter future scams.


#6

Bill Clinton's idiot economic "ideas" brought the final gauntlet down on us. Resurrect Glass-Steagall. Nothing less is acceptable. What idiocy his whole decade cost us.


#7

Ben Bernanke - now needs to sell his book... time for a Keiser Report rant


#8

Just one of many reasons to make private contributions to political campaigns a class A felony. Not only do these corporate donors disenfranchise the electorate by making them second class citizens but almost every problem with any government can be traced to graft. It can only end when only the people pay their representatives.


#9

Beat your drum lightly there Walt. While it is quite true that Clinton was a financial disaster he shone on other levels. The same cannot be said for the shrubery that preceded and followed him.


#10

Whoops! There goes all the $30 average donations from private citizens to the campaign of Senator Sanders. Since he does not accept PAC money, where will he get the money needed to run his campaign?

Based on your comment, Senator Sanders has 600,000+ felons as supporters.


#11

No, I know. I quite like Bill Clinton. He freed us from the social straight jacket of 12 year of Republican repression. On civil rights, si. On following through with his promises, si. But the capitulation on welfare and most of his economic stuff was very, very bad.


#12

Siouxrose, Congress repealed Glass-Steagall because main street banks wanted a piece of the action. Wall Street banks were making a bundle investing in derivatives. The main street banks wanted to make money as well (this is how capitalism works).

The problem was that when the housing bubble burst, all those mortgage backed securities were worthless (the toxic assets that caused Congress to pass TARP). The mainstream banks were not bailed out because they were not too big to fail.

The local bank that held my mortgage failed. The mortgage was simply purchased by another bank and I still had to make my house payments. Some of the managers of my local bank did go to jail, but nobody on Wall Street has gone to jail.

This is socialism for the rich.


#13

Mixing trading with deposits is what Glass-Steagall prevented. It was the repeal of Glass-Steagall that allowed main street banks to go hog wild investing in the derivatives market.

The housing bubble was created by the Fed. The Fed kept interest rates very low. This meant banks could borrow money from the Fed at basically no interest. They then loaned this money at higher interest rates to people who were convinced houses would never go down in value (the main street banks made money by borrowing from the Fed and making loans to people who had no business taking out mortgages). When the housing bubble burst, so did the main street banks.

Congress in all its infinite wisdom bailed out the Wall Street banks but not the main street banks. Socialism for the rich.


#14

My IRA increased in value 700% when Clinton was president. You may think he was an idiot, but I sure don't

Congress repealed Glass-Steagall, not Clinton. Clinton stupidly signed the repeal.


#15

For the life of me I can't think of a level on which Clinton shone, other than accomplishing Reagan-agenda goals - and bullshit. The record: NAFTA, Telecom Act of '96, Welfare "Reform," repeal of Glass-Steagall, etc. I used to be able to rattle-off more, but it's been a while. If you care to, look it up and you can find more.

The guy was a sleaze-ball par excellence. His infamous "triangulation" strategy marginalized the left in the Democratic Party while throwing the "center" into the clutches of the corporate money machine. In a word, it was the death of the party.


#16

"I've Got Mine" (Glen Frey, 1980's)

Why the fuck are you here?


#17

People have been calling out for "breaking up the banks" for years. The bottom line is that there's nothing we can do about it. It's a tremendously complex issue, but keep in mind that every step of the way, from Reagan's deregulation mania onward, our middle class have supported the agenda that brought us to this point. In the process, we threw away the tools necessary to rebuild. Democrats will continue to assure you that they "feel your pain," and nothing will change. If whatever remains of the middle class disagrees, good, contradict me -- find a way to change the course we're on. It will take a hell of a lot more than periodically shouting, "Stand in Solidarity with the middle class!"


#18

Liberals have been disturbingly indifferent toward the work Clinton, Inc. already did to reverse the New Deal -- the agenda that actually took the US to its height of wealth and productivity. In fact, the liberal bourgeoisie seem utterly oblivious to America's poverty crisis, much less the consequences to the country. It's not a fashionable subject.

Yes, Clinton's "Third Way" agenda has been toxic to the US. Clinton gave a nationally televised speech in which he declared his allegiance to the "New Democrat" (neoliberal) agenda, and this seemed to fly right over the heads of media and the public. Hillary Clinton has maintained her strong support for the "free trade" agenda, from Bill Clinton's NAFTA up through promoting the TPP.

It would be fun to have a public discussion sharing ideas about why so much of the media marketed to libs went all-out to sell Hillary Clinton. Indeed, many get angry if you point out that Hillary Clinton, before launching her pre-campaign speaking tour, was working hard on selling the TPP -- something that has been a matter of public record (via mainstream news) for a long time. On core socioeconomic issues, the public record makes it impossible to dispute the fact that both Clintons were and are well to the right of former Republican presidents Eisenhower, Nixon, and even Reagan. And yet, THIS is what lib media keeps trying to sell.


#19

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#20

You use the term 'liberal' in an amazingly loose fashion. You call the media liberal.
Considering who owns the 'media' that seems stunningly incongruous. You stated “...(Bill) Clinton gave a nationally televised speech in which he declared his allegiance to the "New Democrat" (neoliberal) agenda, and this seemed to fly right over the heads of media and the public.” Did it occur to you that the lack of response by the media was due not to liberal indifference but that the media indeed are decidedly not 'liberal'.

Does a 'liberal' media back every military intervention, do next to nothing when international 'trade' agreements, or in more honest terms 'wealth investor rights agreements', are proposed and enacted, virtually never even hinting at a single payer health system, avoiding it like a plague, as if taking advantage of economy of scale for a country with the biggest economy since the beginning of the 20th century was as you put it “...not a fashionable subject”?

Showing a strong bent towards Hillary Clinton, a very non-liberal, demonstrates how 'liberal' the MSM are not. You even say as much, “On core socioeconomic issues, the public record makes it impossible to dispute the fact that both Clintons were and are well to the right of former Republican presidents Eisenhower, Nixon, and even Reagan.” But then you follow with, “And yet, THIS is what lib media keeps trying to sell.” The 'lib' media is/has been promoting the Clintons, despite the Clintons being very unliberal? Why??? Does Fox News promote Code PinK? So what gives, is this a Sherlock Holmes type of puzzle?

DHFabian, in case this hasn't been brought to your attention before, please, allow
me if you will. THE....MEDIA....ARE....NOT....LIBERAL. Their institutional purpose is to sell a product, namely us, the public, to advertisers. Your comment about “...why so much of the media marketed to libs...” is conflating 'libs' with upscale markets. They are demonstrating to advertisers that their advertisements are being directed to wealthier sources and can thus justify higher advertisement fees.

Now be honest, DHFabian, you knew that you'd be asked this question. Just between you and me...and the CD commentary section....and the NSA...and the liberal media...and a few UFOs....what is you purpose? High stake wagers could be riding on this...even speculators and bankers, you know, regular folks like ourselves, could be involved. Come on now, we did our part. Imagine if no one paid attention. Don't be a tease. Is this a cry for help? Hey, we can get 50 people with “Free DHFabian” signs and bullhorns in an hour. Is that what you want? Talk to us DHFabian.