Kudos to Vox’s Matthew Iglesias for his integrity in reporting Hillary Clinton’s prescription to regulate big banks’ risky behavior. Iglesias notes that while the press is likely to ignore it (most have), Clinton’s policy addresses “a question of urgent importance to the economic welfare of everyone in the country.” In pertinent part, her plan is to “charge a graduated risk fee every year on the liabilities of banks with more than $50 billion in assets and other financial institutions that are designed by regulators for enhanced oversight.” What does that mean? Iglesias explains, and champions, Hillary Clinton’s idea:
“[W]hen a big bank goes bankrupt, it creates huge problems for the broader economy. Because of that, governments have a tendency to prevent big banks from going bankrupt. And because of that, big banks have a tendency to engage in a riskier pattern of business than you see from other kinds of companies. …Clinton is proposing to clamp down on those risks by imposing a tax on bank debt. That compensates the public for the financial cost of bailouts and the social cost of bank failures, while also creating new incentives for banks to manage their affairs in a less risky manner….”
“…The key pillars are:
The fee would be assessed on banks with more than $50 billion in assets (34 banks fit the bill as of today, though two of them are very close to the line) as well as on a handful of other institutions that the government has already flagged for extra regulatory scrutiny.
The fee rate would be higher on short-term debt than on long-term debt.
The fee rate would be higher on banks with more debt in their financing structure.
FDIC-insured bank deposits would be exempt from the fee.”
I strongly suggest you read Mr. Igleslias’ article in its entirety. He concludes her plan targets “risk plus size” and notes:
“This is just one element of a broader Clinton plan for Wall Street regulation, but it shows her at her wonkish best. She is addressing the core concern of populist bank bashers without being a slave to their preferred methods and slogans.”
The thoughtfulness of her plan is not unlike the craft she applied to making college more affordable, or her explanation of why and how she is backing President Obama’s plan on Iran. Across the board, Hillary Clinton offers policies evidencing wisdom gleaned from her eight years in the White House, eight in the Senate and four at State, her ability to work across the aisle, and a willingness to consult with experts in a variety of fields before offering plans that have a prayer of success.
A false talking point pushed by punditry is that Hillary has been pushed left by Sen. Bernie Sanders. She has always been a progressive and warned against the economic melt-down, proposing policies to mitigate it. Her fight on this issue while a U.S. Senator is known to her New York constituents. Politifact verified the truth of Hillary’s claim that:
“…[S]he “called for addressing risks of derivatives, cracking down on subprime mortgages and improving financial oversight” early on in the financial crisis.
The crisis hit a peak in summer 2008, though it started to gain traction in 2007. Clinton began addressing the subprime mortgage issue in her appearances in March 2007. Later that year, she took on derivatives. She also proposed specific plans for solving these problems and increasing oversight of financial institutions.”
Further, Andrei Cherny noted in The Daily Beast that in 2007, Wall Street “hated the idea of a Financial Product Safety Commission,” by little-known Harvard Law professor Elizabeth Warren. Senator Hillary Clinton put it at the heart of her “Fair Credit for Families Agenda.” Cherny shared that both Bill and Hillary Clinton had long pushed “a problem solving populism” that produced results. In 2008, Hillary campaigned on ending outsourcing and said the following:
“With all due respect, America was not made great by rich people. It was people who worked hard every day who made America great. We’ll take on Wall Street and tell them: ‘You’re going to finally pay your fair share in taxes, because it’s outrageous that a teacher making $50,000 pays a higher tax rate than some Wall Street investment managers making $50 million.’”
Most reporters have ignored her advocacy on these fronts. The corporate-owned media, addicted to click bait, would rather report on the vagaries of poll numbers, and continue their obsession with trashing Clinton, with an eye toward inventing a horse race, though she is miles ahead of other candidates.
But frustration is mounting at news organizations that feed us junk food rather than substance. Proponents of the current populist wave yearn to hear details of exactly the type of issues Clinton is discussing. As Mr. Iglesias notes, her policies do not lend themselves to 15 second sound bites and for that reason may be “politically thankless.” Though she can effectively explain her policies since she is what Jimmy Fallon called a “Tough Mother” and a policy wonk, the responsibility is also on the American people to investigate these ideas thoroughly, rather than settling for fist pumping phrases that lack substance.
This Tuesday will be Democrats’ first opportunity to see the Democratic contestants side by side (with the exception of the elusive Joe Biden, who intentions still are unknown). Secretary Clinton has been doing this a long time and knows that while a good sound bite is helpful, it is crucial to tell American people how you plan to execute your campaign promises – and pay for them. I suspect generalized rhetoric or one size fits all populism may look thin next to more sophisticated proposals.
Going forward, it’s the grassroots who will have to force media coverage on substantive issues. Corporate owned news networks are not going to give up reporting nonsense without a fight. Only when we challenge them to contrast policy for policy and each candidate’s record of accomplishment will it be obvious who our best choice for President will be.
My bet – Hillary delivers.
Anita Finlay is the bestselling author of Dirty Words on Clean Skin — exposing media bias in a society not as evolved as advertised. #1 on Amazon’s Women in Politics books for 16 weeks.
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