Bernie Sanders on the Failures, and Successes, of Obama’s Wall Street Legacy

Where in political history do you rate Obama?
I think in looking at the Obama years, it has to be seen in the context of the world in which we were living when he came in. When he came into office, we were losing 800,000 jobs a month, we were in the process of running up a deficit of $1.4 trillion, and the world’s financial system was on the brink of collapse. Nobody except the most blatantly partisan person will deny that we are in much, much, much better shape today. The deficit has been cut by two-thirds. And needless to say, the world’s financial system — Wall Street — is not on the verge of collapse today. The number of people who are receiving some form of health insurance has increased significantly — those are real, concrete achievements that the president should be very, very proud of. I think the weakness is that while real progress was made on the economy, given the enormity of the crises that we face, and the incredible Republican obstructionism, we have not rallied the American people to take on the greed of corporate America.

This idea that he could communicate more effectively to the American people to push for a more ambitious ­agenda — could you point to a specific moment in the last eight years where that could have actually achieved something despite all the Republican obstruction?
Absolutely. As of today, Wall Street firms have paid hundred of billions of dollars in fines and settlements to the United States government, and yet, somehow, amazingly enough, not one executive has been prosecuted. [Ed. note: There has been at least one, Kareem Serageldin of Credit Suisse, who was sentenced to 30 months in prison for his role in the financial crisis. The judge in the case called his crime “a small piece of an overall evil climate within the bank and with many other banks.”]

But that’s a decision made by prosecutors, not the …
No, the president of the United States could have been much more insistent in demanding that the Department of Justice take a hard look at that issue. What you had was greed and illegal behavior on Wall Street that destroyed the economy and the lives of millions and millions of people, and he should have said, “We are gonna hold those people accountable, it ain’t gonna happen again, I am on the side of the people who lost their jobs …”

If you were president of the United States, how would you have gone about doing that differently?
I would have done what happened in the 1930s. You would have gotten together the best people in the country that would be knowledgeable to investigate the causes of it and go from there. It should have been done immediately. Now there was a commission that took place, but it was three or four years later. They did a fairly good job. In other words, you should have seized that moment. The American people were furious. They were ripped off. They had every legitimate reason to feel ripped off. They’d bailed out these people, and what has Wall Street done for them?

Dodd-Frank — it was clearly a sincere effort to try to reform the system in a way to at least stop a repeat of the last—
I wouldn’t say “reform the system.” I would say put some checks and balances into a system, which had been deregulated where Wall Street could do anything.

Why isn’t that reform? Is that too strong a word for you?
Yeah. Reform would be to say that it is bad public policy when six financial institutions have assets equivalent to 58 percent of the GDP of the United States. That would be reform.

There’s no reform without really breaking them up, you’re saying?
I’m not saying no reform, but you have a situation where six major financial institutions are writing two-thirds of the credit cards and issuing one-third of the mortgages. The major banks are larger today than they were before Dodd-Frank.

It’s almost as if you’re saying, at least on the question of financial — we’ll do air quotes — “reform,” there was really never any hope for it because the president’s analysis of the system was just not up to the problem.
All right, let me just say one more time —

Okay, you like Obama.
This country is a lot better as a result of Obama and he had to do that against fierce opposition. On the other hand, the great issue of our time is the movement toward oligarchy. And that means the power of Wall Street, the power of corporate America, the power of the billionaire class to own the politics of this country. So we have made progress, but the fundamental issue of taking on the one percent and the greed of the billionaire class, that has not occurred.

There’s this analysis you often hear that the reason we didn’t have more robust financial reform is that there was a set of the Democratic Party that was closer to Wall Street and they ended up cycling back through the administration. Do you think that that misses the point?
The president appoints people. President Obama, in a big mistake, basically did what Republicans wanted and appointed Erskine Bowles and Alan Simpson to chair a commission on the deficit crisis. Simpson is a right-wing Republican who had been very clear about his hatred for Social Security, and Bowles is a Wall Street Democrat. Those are the people he asked to come up with a solution to the deficit crisis. You could have appointed Robert Reich. You could have appointed even a moderate Republican. You didn’t have to appoint the right-wing Republican and a conservative Democrat. So that tells you something. Still, the bottom line is: The economy is in much better shape than when Obama first came in. He deserves credit. On the other hand, the angst of the moment is that people see this country moving into an oligarchic form of society — where we have a grotesque level of income and wealth inequality where the political system is being bought by Sheldon Adelson and the Koch brothers. Now, he can’t be blamed for that …

But you’re saying that he could have set a different tone.

Did you push him ever?
Yes. Way back when, not long after he came in, a half a dozen of us senators went to the White House to say, “Mr. President, you gotta be tougher on Wall Street.”

What was his response?
When I meet with the president, I’m not gonna tell you what we said in the meeting, but the proof is in the pudding. Trade, right now, in the midst of a very difficult presidential campaign, he is still pushing fervently for a disastrous TPP policy, and sits at a table with corporate leaders. I mean, it’s always easy, when I sit here as a United States senator, so as I’ve said three times, I think a lot has been accomplished under his administration, so I’m not here to …

No, I understand.
All right, the crisis of the moment is the drift towards oligarchy. You do not sit down at a table with leaders of the oligarchic movement and work with them on a trade agreement, which the trade-union movement, which the environmental community, which the public-health people are all in opposition to. Not to mention your candidate for president of the United States. That is bad politics, not to mention he’s wrong on the issue. I think what the president had to do, which he chose not to do, is to make it clear that we have got to deal with the greed of the one percent of corporate America and Wall Street, that their practices cannot continue. That is an approach he has chosen not to take. I think a lot of this has to do with his inner decency — he happens to be a very decent guy. And when he came in, he honestly believed that he could sit down with people like Tom Coburn and extreme-right-wing Republicans and say, “Look, I can’t get it all, you’re not gonna get it all, let’s work out a compromise.” What he didn’t catch onto for years, for his entire first term, is these people had zero intention of compromising.

But what you’re saying is actually more specific than that. In order to have real leverage going forward, he needed to scare the crap out of these guys on some level.
Well, two things were the failure, and they’re related. In 2008, he ran one of the great campaigns in the history of the United States. Brilliant campaign. Did he utilize the energy and the coalition that he put together and help mobilize that into a powerful political force which would have helped him fight for the change that this country needed? The answer is no. Now, he will tell you, “Well, yeah, that’s kinda right, but you know what? It’s a little bit harder than you think.”

And you’re saying that too?
Yeah, it is harder than you think to mobilize people. It’s one thing in an election, it’s another thing to maintain that momentum. That is a true point. Did he do everything that he could have? I think the answer is no, he did not. Second of all, Rather than making the Republicans an offer they could not refuse because millions of people were standing behind him, he chose to sit down with Republicans and negotiate. I think his politics are not the politics of taking on these people. Every one of these institutions paid billions of dollars. Goldman Sachs, they were one of the smaller ones. They paid $5 billion in an agreement to the federal government for the role that they played in the financial collapse. But they never accepted guilt, and nobody has ever been punished.

Would it have been both morally correct and politically appropriate for the president to have singled out Goldman Sachs or one of these institutions?
I don’t know that you have to single out one. What happened yesterday, all right? Wells Fargo. Here you have an institution which fired 5,000 employees, but the person who was in charge of the division got a $120 million severance package. The CEO was touting the fact that they were selling more accounts, creating more accounts, stocks went up, his own personal wealth increased by $200 million. You think that’s an issue that a president should be speaking out on?

That leads you to the deeper issue: Do you want an economy in which six financial institutions have assets equivalent of $10 trillion, equivalent to about 60 percent of the GDP of the United States? Is that an issue? Do we feel comfortable with that? I don’t.

Given what WikiLeaks published about the DNC, a lot of your supporters say that at least some people there were trying to put their thumb on the scale of the election. Do you feel like Obama was a straight shooter and a neutral player in the primary?
It’s complicated. Look, on one hand, Hillary Clinton was the secretary of State for four years. Hillary Clinton’s politics — you know, he is more progressive, I think, than Hillary Clinton is. He’s more conservative than I am. But, I think, as the president of the United States, would I have been surprised if he’d made it clearer to the American people he was supporting Hillary? He could have done that from day one.

And you would have been okay with that?
No, I would not have been okay with it. But, I think, you know, you’ve got to deal with the media every day and things are sometimes taken out of context. I think the president himself played it pretty evenhanded. Sometimes media twisted things, but I don’t think the average American would have been surprised if six months ago Obama had said, “Well, you know, Bernie’s a nice guy, but I really think Hillary has the experience and the background to be a great president.” Mr. President, are you supporting Hillary? “Well, look, if I had to cast a vote, yeah, I’d cast it for Hillary.” He didn’t do that. He did not do that. And I respect that. I’m sure there was a lot of pressure on him to do that. But he chose not to.

Do you think there’s any chance that Hillary Clinton could end up becoming a more progressive president than Barack Obama?
I think that when you’re a president — even when you’re a senator — there are enormous pressures on you. Sheldon Adelson just chipped in $25 million the other day to the Republican party. He will get paid back in terms of policy. So for any president, there’s gonna be enormous pressure from Wall Street, from Silicon Valley, from all these people. I believe that if we can martial the American people, if we can create what I call the “political revolution” and millions of people are prepared to stand up and fight, do I think that we can move Hillary Clinton to being a progressive president? Yeah, I do. I do. Now, I don’t want to compare her to Obama, that’s—

Is there a president you consider the all-time great from your perspective?
Well, I think what you have to say about FDR, which differentiates him from Obama, in 1936, as you may recall, when he said, “The economic royalists” — I would call them today the billionaire class — “never before in history has there been someone they hated as much as they hate me. I accept their hatred.” Roughly, that’s a paraphrase. You think that’s the speech that Barack Obama would give?

Probably not.
Right. What Roosevelt understood was there was a class war going on, and these people despise him. The point that I’m making, when you get up there and say, in so many words, the people who own America hate my guys because I am standing with the working people and I accept their hatred because I’m gonna fight for you, that sets a tone. He was elected four times. Barack Obama would not get up there and say “Look, Wall Street hates me, corporate American hates me, but you know what, I understand that.”

Where I disagree with you is, “economic royalist” is a good term.
It’s a good term.

It’s colorful, it sticks to the ribs.
It’s not bad, that’s right.

*A version of this article appears in the October 3, 2016, issue of New York Magazine.

Bernie Sanders on Obama’s Wall Street Legacy