In spite of being Wall Street’s favorite candidate, Hillary Clinton has received the support of many prominent liberal individuals and groups. Naturally, these endorsements boost Clinton’s progressive credibility. But should they? Let’s take a closer look at Hillary’s so-called “progressive” surrogates, starting with the man who has been stumping for her the longest:
Barney Frank has been a stalwart of progressivism. As the chairman of the House Financial Services Committee, he co-authored the Dodd-Frank banking regulation. In many ways, the legacy of his time in office was fighting to re-regulate Wall Street.
That’s why it came as a big shock to many when he endorsed Hillary Clinton over Bernie Sanders. It was an even bigger shock when he vocally attacked the Vermont Senator for wanting to break up the big banks by bringing back the New Deal Era Glass-Steagall law banning commercial and investment banks from merging.
In a recent interview with PBS, the former Congressman explained his position:
“It’s not their overall size. It’s the indebtedness that’s the threat. You could not now have an AIG, which got itself $170 billion beyond what it could pay off in derivatives, because we do not allow institutions under the law now to get so indebted without the capital to back it up.”
Let’s step back for a moment and clarify a few things:
The Senate’s Permanent Subcommittee on Investigations cited the size of the banks as a major contributing factor to the Subprime Mortgage Crisis in its 2011 report titled “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse.” Even the crowd that denies the banks need to be broken up, insisting that Dodd-Frank’s regulations are sufficient — including Paul Krugman — cite the aspects of that law which, if enforced, inevitably lead to a government break up of the banks.
Senator Elizabeth Warren (D-MA) recently responded to these claims that the size of the banks had nothing to do with the crash:
“There would have been no crisis without these giant banks…They encouraged reckless mortgage lending both by gobbling up an endless stream of mortgages to securitize and by funding the slimy subprime lenders who peddled their miserable products to millions of American families. The giant banks spread that risk throughout the financial system by misleading investors about the quality of the mortgages in the securities they were offering.”
This statement comes on the heels of an announcement by federal regulators that the banks are still too-big-to-fail, meaning that even one failure could cripple our economy. What Warren doesn’t outright explain is that the megabanks were able to set industry standards thanks to their influence.
The rating agencies were especially susceptible to this influence because they were (and still are) paid per rating. Competition for the business from the megabanks caused a race to the bottom — who would give the highest ratings with the least amount of scrutiny. The ratings became completely meaningless.
And this is how indebtedness got so out of control — especially for AIG.
AIG relied on the compromised ratings when it decided to insure products. The appearance of low risk made the decision easy: The amount of money to be made doing business with the large financial institutions outweighed any concerns about risk.
Of course, when delinquency rates for mortgages began to skyrocket, it caused confusion and panic. Nobody was really sure of the value of the products they were holding on to. Lenders stopped lending, hurting small and medium-size businesses which rely on annual loans.
In light of all of this background, Frank’s argument about indebtedness, and the provisions of Dodd-Frank which address the issue, seems myopic. Separating commercial and investment banks would have the effect of eliminating the problem of companies taking too much debt from derivatives while simultaneously eliminating the root causes of the crash.
So why is Mr. Bank Reformer so opposed to this plan?
Maybe it is because these days, Barney Frank sits on the board of Signature Bank, which has $28.6 billion in assets, and provides both commercial and investment services. In other words, maybe the reason he does not want the banks to be broken up by reimplementing Glass-Steagall, is that he works for a bank which would be subject to said break up.
The former Governor and current Vermont Superdelegate who was once a famous progressive has raised eyebrows with his opposition to Bernie Sanders. He once called single-payer health care “the most economically efficient system.” However, now, he is vocal in his criticism of Bernie Sanders’ proposal for a single-payer system.
Why would a famed progressive like Dean suddenly oppose the policy he once so vocally supported?
Well, it may have something to do with the fact that he now works as a health industry lobbyist. As The Intercept reports:
“After Dean began working in the lobbying industry, he gave a talk about how to navigate the post-Citizens United campaign finance world. “I’ve advised a lot of clients in the industries that I usually end up working with, which are mostly health care industries, not to give any money to either side, or if you do, give it to both sides because politicians really don’t know much about the issues,” Dean said. “But they remember the ads, and they remember who was on whose side and who wasn’t, and it makes a big difference.”
At the very least, it is appropriate to say that Mr. Dean has a conflict of interest now in opposing single-payer health care.
CBCPAC (Congressional Black Caucus PAC)
Many progressives were baffled by the Congressional Black Caucus’ endorsement of Hillary Clinton over Bernie Sanders. This confusion is understandable considering the former’s roots as a Goldwater Girl, her past remarks about “super-predators,” her support for the ‘94 omnibus crime bill and the ‘96 welfare reform bill, and her racially charged 2008 campaign against Barack Obama.
It may come as no surprise to learn that many of CBCPAC’s donors have significant ties to Hillary Clinton including the Podesta Group, co-founded by John Podesta, Hillary Clinton’s campaign chair, JP Morgan Chase, UBS, Citigroup, and more.
While there is no evidence of quid pro quo dealings, there is definitely the appearance of them. This is politics, after all…
MSNBC host Chris Matthews has been a vocal — albeit irritatingly loud — liberal voice in the media since 1994. His show Hardball is known for bold left wing commentary. However, while his support for Hillary Clinton in the 2016 primary may not be surprising, his antipathy towards Bernie Sanders is. Matthews recently came under fire for giving Clinton a fawning interview, which prompted a petition calling for MSNBC to suspend him.
It may not come as a surprise to learn that Matthews’ wife, Kathleen Matthews, is running for Congress, and, to that end, is receiving financial assistance from Hillary Clinton.
Sherrod Brown (D-OH)
Sherrod Brown has been described as Bernie Sanders’ “closest ally in the Senate.” When he endorsed Hillary Clinton, it caused a bit of a media stir. However, a quick look at his OpenSecrets page may provide some insight. As it turns out, Senator Brown is a major recipient of PAC assistance. Sanders has openly opposed, criticized, and shunned PACs. This difference in their approaches might be telling. Exploring the PACs page is also where we find something interesting: America Works.
America Works is a leadership PAC that supports Senator Brown, Hillary Clinton, and a number of other pro-Clinton candidates and elected officials, including:
Patrick Leahy (D-VT)
Tammy Duckworth (D-IL)
Richard Blumenthal (D-CT)
Bob Casey (D-PA)
Harry Reid (D-NV)
Kamala Harris (D-CA)
Gov. Maggie Hassan (D-NH)
Katie McGinty (D-PA)
Jason Kander (D-MO)
Rep. Ann Kirkpatrick (D-AZ)
Catherine Cortez Masto (D-NV)
Patrick Murphy (D-FL)
Patty Murray (D-WA)
Brian Schatz (D-HI)
Chuck Schumer (D-NY)
Ted Strickland (D-OH)
Ron Wyden (D-OR)
Even though America Works is just one PAC, and is not a huge spender, there is something of import to be gleaned here: Endorsing Hillary Clinton comes with benefits. There are many PACs and super PACs out there that are ready to aid Clinton and her allies. At a time in our history when elected officials spend a significant amount of their time fundraising, Hillary’s political network gives her both power and influence.
But what does it say about Hillary Clinton the candidate, or her policies, that so many of the “progressives” supporting her are financially tied to Wall Street and the big industries she claims she will regulate, or have vested interests in her, personally? What does it say about our political system that so many individuals and groups have aligned themselves with the candidate who wields political influence over the candidate who represents their espoused principles? Perhaps it is time we accept that money is inherently compromising in politics.