Hillary’s Wall Street Trust Gap

DEM 2016 Debate
To date, only one of these two candidates has progressive cred on financial reforms. Photo: David Becker/AP Photo/Corbis

Hillary Clinton has an opinion piece in the New York Times on her plans to rein in Wall Street and protect the public from excessive risk-taking. And the most interesting line in it has nothing to do with tax loopholes or Wall Street or inequality or financial regulation at all. “My comprehensive plan has already won praise from progressives like Sherrod Brown and Barney Frank,” she writes, before delving into “what it would do.”

Why all the progressive shout-outs? I do not think it is because Clinton seems to be moving to the left on financial regulation. The plan that she put out in October was already pretty lefty: It imposes a “risk fee” on the largest financial institutions, creates a new high-frequency trading tax, beefs up the Volcker Rule, and on and on. All of that is on top of the existing Dodd-Frank legislation, by the way, which she promises to defend and strengthen.  

Rather, it seems to be an attempt to convince the left that she is really on their side. This is a candidate who has racked up millions of dollars in speaking fees from financial firms, along with millions more in campaign contributions. That is to say nothing of the money raked in by her husband. (Or the culpability-by-osmosis many progressives assign to her for the regulatory policy decisions made by Bill’s administration.) All those dollars have left her open to skepticism from progressives and to repeated broadsides from Bernie Sanders, among others. “The truth is, you can’t change a corrupt system by taking its money,” Sanders says in one advertisement, even if he refrains from saying Clinton’s name.

Clinton has thus far not always responded elegantly or convincingly to the charge that she’s on Wall Street’s side. During the Democratic debate in Iowa, Sanders lambasted her over her Wall Street cash: “Let’s not be naive about it,” he said. “Over her political career, why has Wall Street been a major, the major campaign contributor to Hillary Clinton? Now, maybe they’re dumb and they don’t know what they’re going to get, but I don’t think so.”

Clinton pointed to her policies, but then turned — quixotically — to the terrorist attack on the World Trade Center in response. “Not only do I have hundreds of thousands of donors, most of them small, and I’m very proud that for the first time a majority of my donors are women, 60 percent,” she said. “I represented New York on 9/11 when we were attacked. Where were we attacked? We were attacked in downtown Manhattan where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy, and it was a way to rebuke the terrorists who had attacked our country.” Oh, dear.

But then she went on: “My proposal is tougher, more effective, and more comprehensive because I go after all of Wall Street, not just the big banks,” she told Sanders. That’s the thing: On the policy merits, Clinton is actually on pretty sound footing here. She just hasn’t found a way to convince the left to believe her.

That brings us back to Barney Frank and Sherrod Brown: No need to believe Clinton’s camp, lefties! Believe your own! And it just might be a strategy that works. “Secretary Clinton is right to fight back against Republicans trying to sneak Wall Street giveaways into the must-pass government funding bill,” no other than Elizabeth Warren wrote in a Facebook post praising Clinton’s op-ed. “Whether it’s attacking the CFPB, undermining new rules to rein in unscrupulous retirement advisers, or rolling back any part of the hard-fought progress we’ve made on financial reform, she and I agree” that Democrats should “do everything they can.”

Hillary’s Wall Street Trust Gap