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Bernie Sanders: To Rein In Wall Street, Fix the Fed

By BERNIE SANDERS
DEC. 23, 2015

WALL STREET is still out of control. Seven years ago, the Federal Reserve and the Treasury Department bailed out the largest financial institutions in this country because they were considered too big to fail. But almost every one is bigger today than it was before the bailout. If any were to fail again, taxpayers could be on the hook for another bailout, perhaps a larger one this time.

To rein in Wall Street, we should begin by reforming the Federal Reserve, which oversees financial institutions and which uses monetary policy to maintain price stability and full employment. Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates.

CreditSpencer Platt/Getty Images

The recent decision by the Fed to raise interest rates is the latest example of the rigged economic system. Big bankers and their supporters in Congress have been telling us for years that runaway inflation is just around the corner. They have been dead wrong each time. Raising interest rates now is a disaster for small business owners who need loans to hire more workers and Americans who need more jobs and higher wages. As a rule, the Fed should not raise interest rates until unemployment is lower than 4 percent. Raising rates must be done only as a last resort — not to fight phantom inflation.

What went wrong at the Fed? The chief executives of some of the largest banks in America are allowed to serve on its boards. During the Wall Street crisis of 2007, Jamie Dimon, the chief executive and chairman of JPMorgan Chase, served on the New York Fed’s board of directors while his bank received more than $390 billion in financial assistance from the Fed. Next year, four of the 12 presidents at the regional Federal Reserve Banks will be former executives from one firm: Goldman Sachs.

These are clear conflicts of interest, the kind that would not be allowed at other agencies. We would not tolerate the head of Exxon Mobil running the Environmental Protection Agency. We don’t allow the Federal Communications Commission to be dominated by Verizon executives. And we should not allow big bank executives to serve on the boards of the main agency in charge of regulating financial institutions.

If I were elected president, the foxes would no longer guard the henhouse. To ensure the safety and soundness of our banking system, we need to fundamentally restructure the Fed’s governance system to eliminate conflicts of interest. Board members should be nominated by the president and chosen by the Senate. Banking industry executives must no longer be allowed to serve on the Fed’s boards and to handpick its members and staff. Board positions should instead include representatives from all walks of life — including labor, consumers, homeowners, urban residents, farmers and small businesses.

The Fed must also make sure that financial institutions are investing in the productive economy by providing affordable loans to small businesses and consumers that create good jobs. How? First, we should prohibit commercial banks from gambling with the bank deposits of the American people. Second, the Fed must stop providing incentives for banks to keep money out of the economy. Since 2008, the Fed has been paying financial institutions interest on excess reserves parked at the central bank — reserves that have grown to an unprecedented $2.4 trillion. That is insane. Instead of paying banks interest on these reserves, the Fed should charge them a fee that would be used to provide direct loans to small businesses.

Third, as a condition of receiving financial assistance from the Fed, large banks must commit to increasing lending to creditworthy small businesses and consumers, reducing credit card interest rates and fees, and providing help to underwater and struggling homeowners.

We also need transparency. Too much of the Fed’s business is conducted in secret, known only to the bankers on its various boards and committees. Full and unredacted transcripts of the Federal Open Market Committee must be released to the public within six months, not five years, which is the custom now. If we had made this reform in 2004, the American people would have learned about the housing bubble well in advance of the financial crisis.

In 2010, I inserted an amendment in Dodd-Frank to audit the emergency lending by the Fed during the financial crisis. We need to go further and require the Government Accountability Office to conduct a full and independent audit of the Fed each and every year.

Financial reforms must not stop with the central bank. We must reinstate Glass-Steagall and break up the too-big-to-fail financial institutions that threaten our economy. But we need to start with fundamental change. The sad reality is that the Federal Reserve doesn’t regulate Wall Street; Wall Street regulates the Fed. It’s time to make banking work for the productive economy and for all Americans, not just a handful of wealthy speculators. And it begins by making the Federal Reserve a more democratic institution, one that is responsive to the needs of ordinary Americans rather than the billionaires on Wall Street.


http://www.nytimes.com/2015/12/23/opinion/bernie-sanders-to-rein-in-wall-street-fix-the-fed.html?_r=1

Senator Bernie Sanders: ENDING TOO-BIG-TO-JAIL, THE BUSINESS MODEL ON WALL STREET IS FRAUD,

PREPARED REMARKS

Wall Street and the Economy

JANUARY 5, 2016

| BY BERNIE SANDERS

 

Speaking a few subway stops away from the epicenter of the global financial crisis, U.S. Sen. Bernie Sanders promised to remake the financial system to serve America’s working families. Below are his prepared remarks. Watch the live stream here.

The American people are catching on. They understand that something is profoundly wrong when, in our country today, the top one-tenth of 1 percent own almost as much wealth as the bottom 90 percent and when the 20 richest people own more wealth than the bottom 150 million Americans – half of our population. They know that the system is rigged when the average person is working longer hours for lower wages, while 58 percent of all new income goes to the top 1 percent.

They also know that a handful of people on Wall Street have extraordinary power over the economic and political life of our country. As most people know, in the 1990s and later, the financial interests spent billions of dollars in lobbying and campaign contributions to force through Congress the deregulation of Wall Street, the repeal of the Glass-Steagall Act and the weakening of consumer protection laws in states.

They spent this money in order to get the government off their backs and to show the American people what they could do with that new-won freedom. Well, they sure showed the American people. In 2008, the greed, recklessness and illegal behavior on Wall Street nearly destroyed the U.S. and global economy.

Millions of Americans lost their jobs, their homes and their life savings.

While Wall Street received the largest taxpayer bailout in the history of the world with no strings attached, the American middle class continues to disappear, poverty is increasing and the gap between the very rich and everyone else is growing wider and wider. And Wall Street executives still receive huge compensation packages as if the financial crisis they created never happened.

Greed, fraud, dishonesty and arrogance, these are the words that best describe the reality of Wall Street today.
So, to those on Wall Street who may be listening today, let me be very clear. Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the fabric of our nation. And, here is a New Year’s Resolution that I will keep if elected president. If you do not end your greed, we will end it for you.

We will no longer tolerate an economy and a political system that has been rigged by Wall Street to benefit the wealthiest Americans in this country at the expense of everyone else.

While President Obama deserves credit for improving this economy after the Wall Street crash, the reality is that a lot of unfinished business remains to be done.

Our goal must be to create a financial system and an economy that works for all Americans, not just a handful of billionaires

ENDING “TOO BIG TO FAIL”

That means we have got to end, once and for all, the scheme that is nothing more than a free insurance policy for Wall Street, the policy of “too big to fail.”

We need a banking system that is part of the productive economy – making loans at affordable rates to small- and medium-sized businesses so that we create decent-paying jobs. Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments, making huge profits and assured that, if their schemes fail, the taxpayers will be there to bail them out.

In 2008, the taxpayers of this country bailed out Wall Street because we were told they were “too big to fail.” Yet, today, 3 out of the 4 largest financial institutions (JP Morgan Chase, Bank of America and Wells Fargo) are nearly 80 percent bigger than before we bailed them out. Incredibly, the six largest banks in this country issue more than two-thirds of all credit cards and more than 35 percent of all mortgages. They control more than 95 percent of all financial derivatives and hold more than 40 percent of all bank deposits. Their assets are equivalent to nearly 60 percent of our GDP. Enough is enough.

If a bank is too big to fail, it is too big to exist. When it comes to Wall Street reform that must be our bottom line. This is true not just from a risk perspective and the fear of another bailout. It is also true from the reality that a handful of huge financial institutions simply have too much economic and political power over this country.

If Teddy Roosevelt, the Republican trust-buster, were alive today, he would say “break ‘em up.” And he would be right.

And, here’s how I will accomplish that.

Within the first 100 days of my administration, I will require the secretary of the Treasury Department to establish a “Too-Big-to Fail” list of commercial banks, shadow banks and insurance companies whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout.

Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy as authorized under Section 121 of the Dodd-Frank Act.

And, I will fight to reinstate a 21st Century Glass-Steagall Act to clearly separate commercial banking, investment banking and insurance services. Let’s be clear: this legislation, introduced by my colleague Senator Elizabeth Warren, aims at the heart of the shadow banking system.

In my view, Senator Warren, is right. Dodd-Frank should have broken up Citigroup and other “too- big-to-fail” banks into pieces. And that’s exactly what we need to do. And that’s what I commit to do as president.

Now, my opponent, Secretary Clinton says that Glass-Steagall would not have prevented the financial crisis because shadow banks like AIG and Lehman Brothers, not big commercial banks, were the real culprits.

Secretary Clinton is wrong.

Shadow banks did gamble recklessly, but where did that money come from? It came from the federally-insured bank deposits of big commercial banks – something that would have been banned under the Glass-Steagall Act.

Let’s not forget: President Franklin Roosevelt signed this bill into law precisely to prevent Wall Street speculators from causing another Great Depression. And, it worked for more than five decades until Wall Street watered it down under President Reagan and killed it under President Clinton.

And, let’s not kid ourselves. The Federal Reserve and the Treasury Department didn’t just bail out shadow banks. As a result of an amendment that I offered to audit the emergency lending activities of the Federal Reserve during the financial crisis, we learned that the Fed provided more than $16 trillion in short-term, low-interest loans to every major financial institution in the country including Citigroup, JP Morgan Chase, Bank of America, Wells Fargo, not to mention large corporations, foreign banks, and foreign central banks throughout the world.

Secretary Clinton says we just need to impose a few more fees and regulations on the financial industry. I disagree.

As former Secretary of Labor Robert Reich has said and I quote: “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 … Hillary Clinton’s proposals would only invite more dilution and finagle. The only way to contain the Street’s excesses is with reforms so big, bold, and public they can’t be watered down – busting up the biggest banks and resurrecting Glass-Steagall.”

Secretary Reich is right. Real Wall Street reform means breaking up the big banks and re-establishing firewalls that separates risk taking from traditional banking.

My opponent says that, as a senator, she told bankers to “cut it out” and end their destructive behavior. But, in my view, establishment politicians are the ones who need to “cut it out.” The reality is that Congress doesn’t regulate Wall Street. Wall Street, its lobbyists and their billions of dollars regulate Congress. We must change that reality, and as president I will.

ENDING TOO-BIG-TO-JAIL

It is no secret that millions of Americans have become disillusioned with our political process. They don’t vote. They don’t believe much of what comes out of Washington. They don’t think anyone is there representing their interests. In my view, one of the reasons for that deep disillusionment is the widespread understanding that our criminal justice system is broken and grossly unfair – and that we do not have equal justice under the law. The average American sees kids being arrested and sometimes even jailed for possessing marijuana or other minor crimes. But when it comes to Wall Street executives, some of the wealthiest and most powerful people in this country, whose illegal behavior caused pain and suffering for millions – somehow nothing happens to them. No police record. No jail time. No justice.

We live in a country today that has an economy that is rigged, a campaign finance system which is corrupt and a criminal justice system which, too often, does not dispense justice.

Not one major Wall Street executive has been prosecuted for causing the near collapse of our entire economy.

That will change under my administration. “Equal Justice Under Law” will not just be words engraved on the entrance of the Supreme Court. It will be the standard that applies to Wall Street and all Americans.

THE BUSINESS MODEL ON WALL STREET IS FRAUD

It seems like almost every few weeks we read about one giant financial institution after another being fined or reaching settlements for their reckless, unfair and deceptive activities.

Some people believe that this is an aberration: that we have an honest financial system in which, every now and then, major financial institutions do something wrong and get caught. In my view, the evidence suggests that would be an incorrect analysis.

The reality is that fraud is the business model on Wall Street. It is not the exception to the rule. It is the rule. And in a weak regulatory climate the likelihood is that Wall Street gets away with a lot more illegal behavior than we know of.

How many times have we heard the myth that what Wall Street did may have been wrong but it wasn’t illegal?
Let me help shatter that myth today.

Since 2009, major financial institutions in this country have been fined $204 billion. $204 billion. And that takes place in a weak regulatory climate.

Here are just a few examples of when major banks were caught doing illegal activity.

In August 2014, Bank of America settled a case with the Department of Justice for more than $16 billion on charges that the bank misled investors about the riskiness of mortgage-backed securities it sold in the run-up to the crisis.

In November of 2013, JP Morgan settled a case for $13 billion with the Department of Justice and the Federal Housing Finance Agency over charges the bank knowingly sold securities made up of low-quality mortgages to Fannie Mae and Freddie Mac.

In June of 2014, BNP Paribas was sentenced to five years’ probation and was ordered to pay $8.9 billion in penalties by a U.S. District Judge in Manhattan after this bank pled guilty to charges of violating sanctions by conducting business in Sudan, Iran and Cuba.

Let me read you a few headlines and you tell me how it makes sense that not one executive was prosecuted for fraud.

• CNN Headline, May 20, 2015: “5 big banks pay $5.4 billion for rigging currencies.” Those banks include JPMorgan Chase and Citigroup.
• Headline from the International Business Times (February 24, 2015): “Big Banks Under Investigation For Allegedly Fixing Precious Metals Prices.” The Banks under investigation included Goldman Sachs and JPMorgan Chase.
• Headline from The Real News Network (November 26, 2013): “Documents in JPMorgan settlement reveal how every large bank in the U.S. has committed mortgage fraud.”
• Headline from The Washington Post (March 14, 2014): “In lawsuit, FDIC accuses 16 big banks of fraud, conspiracy,” which included Bank of America, Citigroup and JP Morgan Chase.
• Headline from the Guardian (April 2, 2011): “How a big U.S. bank laundered billions from Mexico’s murderous drug gangs.” This article talks about how Wachovia (which was acquired by Wells Fargo) aided Mexican drug cartels in transferring billions of dollars in illegal drug money. Here is what the federal prosecutor (Jeffrey Sloman) said about this: “Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.”

Yet, the total fine for this offense was less than 2% of the bank’s $12.3 billion profit for 2009 and no one went to jail. No one went to jail.

And, if that’s not bad enough, here’s another one.

• Headline: The Wall Street Journal, February 9, 2011: “J.P. Morgan Apologizes for Military Foreclosures.” Here is a case where JP Morgan Chase, the largest bank in America, wrecked the finances of 4,000 military families in violation of the Civil Service Members Relief Act, yet no one went to jail.

And, when I say that the business model of Wall Street is fraud that is not just Bernie Sanders talking. That is what financial executives told the University of Notre Dame in a study on the ethics of the financial services industry last year.

According to this study, 51 percent of Wall Street executives making more than $500,000 a year found it likely that their competitors have engaged in unethical or illegal activity in order to gain an edge in the market.

More than one-third of financial executives have either witnessed or have firsthand knowledge of wrongdoing in the workplace.

Nearly one in five financial service professionals believe they must engage in illegal or unethical activity to be successful.

Twenty-five percent of financial executives have signed or been asked to sign a confidentiality agreement that would prohibit reporting illegal or unethical activities to the authorities.

Here’s what one banker from Barclays said in 2010, when he was caught trying to price-fix the $5 trillion-per-day currency market: “If you ain’t cheating, you ain’t trying.”

Here’s what an analyst from Standard & Poors said in 2008, “Let’s hope we are all wealthy and retired by the time this house of cards falters.”

This country can no longer afford to tolerate the culture of fraud and corruption on Wall Street.

Under my administration, Wall Street CEOs will no longer receive a get-out-of jail free card. Big banks will not be too big to fail. Big bankers will not be too big to jail.

As president, I will nominate and appoint people with a track record of standing up to power, rather than those who have made millions defending Wall Street CEOs. Goldman Sachs and other Wall Street banks will not be represented in my administration.

TAX ON WALL STREET SPECULATION

And, if we are serious about reforming our financial system, we have got to establish a tax on Wall Street speculators. We have got to discourage reckless gambling on Wall Street and encourage productive investments in the job-creating economy.

We will use the revenue from this tax to make public colleges and universities tuition free. During the financial crisis, the middle class of this country bailed out Wall Street. Now, it’s Wall Street’s turn to help the middle class.

REFORMING CREDIT RATING AGENCIES

We cannot have a safe and sound financial system if we cannot trust the credit agencies to accurately rate financial products. And, the only way we can restore that trust is to make sure credit rating agencies cannot make a profit from Wall Street.

Investors would not have bought the risky mortgage backed derivatives that led to the Great Recession if credit agencies did not give these worthless financial products triple-A ratings – ratings that they knew were bogus.
And, the reason these risky financial schemes were given such favorable ratings is simple. Wall Street paid for them.

Under my administration, we will turn for-profit credit rating agencies into non-profit institutions, independent from Wall Street. No longer will Wall Street be able to pick and choose which credit agency will rate their products.

CAP CREDIT CARD INTEREST RATES AND ATM FEES

If we are going to create a financial system that works for all Americans, we have got to stop financial institutions from ripping off the American people by charging sky-high interest rates and outrageous fees.

In my view, it is unacceptable that Americans are paying a $4 or $5 fee each time they go to the ATM.

It is unacceptable that millions of Americans are paying credit card interest rates of 20 or 30 percent.

The Bible has a term for this practice. It’s called usury. And in The Divine Comedy, Dante reserved a special place in the Seventh Circle of Hell for those who charged people usurious interest rates.

Today, we don’t need the hellfire and the pitch forks, we don’t need the rivers of boiling blood, but we do need a national usury law.

Today, we need to cap interest rates on credit cards and consumer loans at 15 percent.

In 1980, Congress passed legislation to require credit unions to cap interest rates on their loans at no more than 15 percent. And, that law has worked well. Unlike big banks, credit unions did not receive a huge bailout from the taxpayers of this country. It is time to extend this cap to every lender in America.

We must also cap ATM fees at $2.00. People should not have to pay a 10 percent fee for withdrawing $40 of their own money out of an ATM.

Big banks need to stop acting like loan sharks and start acting like responsible lenders.

ALLOW POST OFFICES TO OFFER BANKING SERVICES

We also need to give Americans affordable banking options.

The reality is that, unbelievably, millions of low-income Americans live in communities where there are no normal banking services. Today, if you live in a low-income community and you need to cash a check or get a loan to pay for a car repair or a medical emergency, where do you go?

You go to a payday lender who could charge an interest rate of over 300 percent and trap you into a vicious cycle of debt. That is unacceptable.

We need to stop payday lenders from ripping off millions of Americans. Post offices exist in almost every community in our country. One important way to provide decent banking opportunities for low income communities is to allow the U.S. postal Service to engage in basic banking services, and that’s what I will fight for.

REFORMING THE FEDERAL RESERVE

Further, we need to structurally reform the Federal Reserve to make it a more democratic institution responsive to the needs of ordinary Americans, not just the billionaires on Wall Street.

When Wall Street was on the verge of collapse, the Federal Reserve acted with a fierce sense of urgency to save the financial system. We need the Fed to act with the same boldness to combat unemployment and low wages.

In my view, it is unacceptable that the Federal Reserve has been hijacked by the very bankers it is in charge of regulating. I think the American people would be shocked to learn that Jamie Dimon, the CEO of JP Morgan Chase, served on the board of the New York Fed at the same time that his bank received a $391 billion bailout from the Federal Reserve. That is a clear conflict of interest that I would ban as president. When I am elected, the foxes will no longer be guarding the henhouse at the Fed. Under my administration, banking industry executives will no longer be allowed to serve on the Fed’s boards and handpick its members and staff.

Further, the Fed should stop paying financial institutions interest to keep money out of the economy and parked at the Fed. Incredibly, the excess reserves of financial institutions that are sitting in the Federal Reserve has grown from less than $2 billion in 2008 to $2.4 trillion today. That is absurd.

Instead of paying banks interest on these reserves, the Fed should charge them a fee that could be used to provide affordable loans to small businesses to create hundreds of thousands of jobs.

CONCLUSION

Finally, let me tell you what no other candidate will tell you. No president, not Bernie Sanders or anyone else, can effectively address the economic crises facing the working families of this country alone. The truth is that Wall Street, corporate America, the corporate media and wealthy campaign donors are just too powerful.

What this campaign is about is building a political movement which revitalizes American democracy, which brings millions of people together – black and white, Latino, Asian-American, Native American – young and old, men and women, gay and straight, native born and immigrant, people of all religions.

Yes. Wall Street has enormous economic and political power. Yes. Wall Street makes huge campaign contributions, they have thousands of lobbyists and they provide very generous speaking fees to those who go before them.

Yes. They have an endless supply of money. But we have something they don’t have. And that is that when millions of working families stand together, demanding fundamental changes in our financial system, we have the power to bring about that change.

Yes, we can make our economy work for all Americans, not just a handful of wealthy speculators. And, now more than ever, that is exactly what we must do.

And so my message to you today is straightforward: If elected president, I will rein in Wall Street so they can’t crash our economy again.

Will they like me? No. Will they begin to play by the rules if I’m president? You better believe it.

Thank you and I look forward to working with the most powerful force in our great nation, not the Barons of Wall Street but the people our government was created to serve.

RSN: Why Bernie Sanders Cleared a Path to Victory in 2nd Debate

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FOCUS: Scott Galindez | Why Bernie Sanders Cleared a Path to Victory in 2nd Debate 

Scott Galindez, Reader Supported News 
Galindez writes: "When Sanders compared the invasion of Iraq to regime change in Iran, Chile, and Guatemala, he reassured the progressive base that he will not have an interventionist foreign policy." 
READ MORE

he pundits and many polls are saying Hillary Clinton won, and maybe for a week or two while Americans worry about ISIS they might be right. Maybe she did pass the commander in chief test. But let’s face it, when Democrats caucus and vote they will not be doing so based on foreign policy. Besides, Bernie Sanders did make waves on foreign policy in a manner that could just help him in the long run.

When Sanders compared the invasion of Iraq to regime change in Iran, Chile, and Guatemala, he reassured the progressive base that he will not have an interventionist foreign policy.

“The disagreement is, not only did I vote against the war in Iraq, if you look at history, you will find that regime change, whether it was in the 1950s in Iran, toppling Salvador Allende in Chile, overthrowing the government of Guatemala – these toppings of governments, regime change, have unintended consequences. On this issue I am a little more conservative than the secretary. I am not a big fan of regime change,” said Sanders as the watch party at Drake University exploded in cheers. In the debate hall there really wasn’t much reaction to anything throughout the debate. It was a reserved, establishment crowd.

But at the watch party as Sanders delivered that response you could hear “Whoa,” “Oh my,” and “Yes” coming from people who were happy to hear a candidate for the Democratic Party’s nomination for president admitting to US foreign policy mistakes in Iran, Chile and Guatemala.

When the media and the pundits try to determine who won debates, they are looking at the event through filters colored by the past. I think Bernie made a very important step in solidifying anti-war anti-intervention groups who were uneasy about some of his past votes on foreign policy. That was lost on the pundits.

“It’s the economy, stupid”

Remember when James Carville and the Clinton inner circle understood that and focused on it? Hillary Clinton can impress everyone with her diplomatic accomplishments all she wants, but they don’t pay the mortgage or the doctor bills and they won’t put your kids through college.

The big differences between the three Democratic candidates for president are not on ISIS (none of them want boots on the ground) or the Iran nuclear deal, which they all favor. The difference is how we are going to deal with economic inequality and who is best positioned to lead that fight. This is the area that Bernie Sanders clearly won in the debate. Was there a game changer? Probably not, but the seeds of doubt were planted.

One reason I think Sanders did enough is that he even polled well after the debate on the economy and economic inequality.

So who won on points? It was a Saturday night debate on CBS, so let’s use their overnight poll, since nobody else was watching – another blunder by the DNC.

Most of the good news for Clinton was on foreign policy: those polled after the debate overwhelmingly thought she was best equipped to handle foreign policy, terrorism, and ISIS. She narrowly edged out Sanders on gun policy, 43% to 36%, a surprisingly strong performance for Sanders. That is where the good news ended for Hillary Clinton.

While many are starting to dismiss the numbers on honesty and trustworthiness, Clinton’s scores still point to a huge opportunity for Senator Sanders. 88% of Democrats polled by CBS after the debate found Sanders honest and trustworthy to only 58% for Clinton. 41% found Clinton not honest and trustworthy, while only 13% had that opinion of Sanders.

On economic issues it was also a good night for Sanders, according to the CBS post-debate poll: 43% thought Sanders would do a better job handling the economy while 40% thought Clinton would do better. When it came to fighting economic inequality, 58% thought Sanders would do a better job to only 31% for Clinton.

That is big news for Bernie and why I think he won the debate. Those are the issues that Democrats will be voting on in the primaries and caucuses. Bernie has laid the groundwork to win, and with two months to go before the voting begins there is plenty of time for Sanders further his case.

On economic issue after issue, Sanders showed daylight between himself and Secretary Clinton. On the minimum wage, Clinton falls short, calling for $12 hour, citing an economist’s opinion that $15 an hour could be too high.

Sanders responded: “It is not a radical idea to say that if somebody works forty hours a week, that person should not be living in poverty. When we put money into the hands of working people, they’re going to go out and buy goods, they’re going to buy services, and they’re going to create jobs in doing that,” he said. “That is the kind of economy I believe in. Put money in the hands of working people. Raise the minimum wage to fifteen bucks an hour.”

On health care, Sanders defended the gains made by Obama but said they do not go far enough. “I believe we’ve got to go further. I want to end the international embarrassment of the United States of America being the only major country on Earth that doesn’t guarantee health care to all people as a right, not a privilege.” Under the private-insurance system, he went on, “We end up spending—and I think the secretary knows this—far more per capita on health care than any other major country, and our outcomes, health-care outcomes are not necessarily that good.”

The moderators pressed Sanders on how he would pay for his proposals, specifically how big a tax hike would come. “We haven’t come up with an exact number yet, but it will not be as high as the number under Dwight D. Eisenhower, which was ninety per cent.” That received the loudest response of the night, many laughing. “I’m not that much of a socialist compared to Eisenhower,” Sanders went on.

It was a good start for Sanders, who will be giving a major address on democratic socialism in the next few weeks. He has to address fears about what being a socialist means.

I think the strongest blow landed by Sanders was why Clinton would be compromised in efforts to take on Wall Street.

Sanders said: “Let’s not be naive about it…. Why, over her political career, has Wall Street been a major—the major—campaign contributor to Hillary Clinton? You know, maybe they’re dumb and they don’t know what they’re going to get, but I don’t think so.”

The biggest blunder of the night came when Secretary Clinton, in what was clearly a rehearsed, prepared response, tried to justify her Wall Street support by invoking 9/11. When you take a step back and think about it, it was a logical response. As senator from New York, she represented Wall Street when they rebuilt from 9/11 but it didn’t come across that way to everyone. The delivery was too defiant instead of a more respectful emotional response that might have landed where she wanted it.

“So I represented New York, and 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.”

The response on twitter was swift and argued that the response was tone deaf.

SEE LINK FOR TWITTER COMMENTS

After a brief exchange on Glass-Steagall, Bernie pressed on: “But at the end of the day, Wall Street today has enormous economic and political power,” he said. “Their business model is greed and fraud. And for the sake of our economy … the major banks must be broken up.”

The exchange on campaign contributions left doubt that Clinton could stand up to the banks. It is clear that the Sanders campaign will continue to press on campaign finance and on the fact that her large contributions from Wall street and other corporations leave her compromised when it comes to real reform. That is Bernie’s path to victory, and it is a path that he cleared the way for in the Des Moines debate.

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Scott Galindez attended Syracuse University, where he first became politically active. The writings of El Salvador's slain archbishop Oscar Romero and the on-campus South Africa divestment movement converted him from a Reagan supporter to an activist for Peace and Justice. Over the years he has been influenced by the likes of Philip Berrigan, William Thomas, Mitch Snyder, Don White, Lisa Fithian, and Paul Wellstone. Scott met Marc Ash while organizing counterinaugural events after George W. Bush's first stolen election. Scott will be spending a year covering the presidential election from Iowa.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

http://readersupportednews.org/opinion2/277-75/33524-focus-why-bernie-sanders-cleared-a-path-to-victory-in-2nd-debate

Too Big To Fail

Please consider adding your name to the petition below to end 'Too Big To Fail' and pass a 21st Century Glass-Steagall that protects Americans:

We all remember the darkest days of the financial crisis five years ago. Credit dried up. The stock market cratered. Millions of people lost their jobs. Billions of dollars in retirement savings disappeared. There were legitimate fears that the dominos of our financial system would never stop falling, and we were heading into another Great Depression. On many of these fronts, we've made real progress. The Dodd-Frank Act was the strongest financial reform law in three generations. If I had been in the Senate three years ago, I would have voted for it proudly. Dodd-Frank put in place the new Consumer Financial Protection Bureau, which has made serious strides toward leveling the playing field for families and increasing transparency in the marketplace. Thanks to the CFPB, I don't think there will ever again be so many lousy mortgages to threaten our families and our economy. But no law is perfect – and our work isn't done. Most importantly, where are we now on the "Too Big to Fail" problem?" Where are we on making sure the giant financial institutions on Wall Street can't bring down the whole economy with a wild gamble? After the 2008 crisis, we widely recognized that Too Big to Fail had distorted the marketplace. The largest financial institutions have lower borrowing costs and competitive advantages because of their free, unwritten, government-guaranteed insurance policy. There was a lot of talk, but look what happened: The four biggest banks are 30% larger today than they were five years ago. Too Big to Fail status is giving the 10 biggest US banks an annual taxpayer subsidy of $83 billion. So what are we doing about it? More delays. Many say Congress should wait to act further because the agencies still have to issue many of the rules required by Dodd-Frank. It's true many rules are not yet written, but that's because the agencies have missed more than 60% of Dodd-Frank's deadlines. When Congress sets deadlines and regulators miss most of them, it's time for Congress to step in. Congress is responsible for oversight – and that's what oversight means. For that reason, I partnered with Senators John McCain, Maria Cantwell, and Angus King to offer up one potential way to address the Too Big to Fail problem: the 21st Century Glass-Steagall Act. It's time to separate boring commercial banking from risky investment banking once again. There are many other approaches for ending Too Big to Fail, and there is no single answer for preventing future crisis. But we should not accept a financial system that allows the biggest banks to emerge from a crisis in record-setting shape while ordinary Americans continue to struggle. We should not accept a regulatory system that is so besieged by lobbyists for the big banks that it takes years to deliver rules that are too often watered-down and ineffective. We should never forget the consequences of letting financial behemoths hold our economy hostage. We managed to avoid that grim fate, but our economy still suffered a staggering body-blow. There were many powerful interests that that have fought against financial reform, and they will fight future reform efforts too. But David beat Goliath with the passage of Dodd-Frank. David beat Goliath when we fought for and established a strong consumer agency. I am confident David can also beat Goliath on Too Big to Fail. Five years after the financial crisis, we just have to pick up the slingshot again. Thank you for being a part of this, Elizabeth

CNBC Censors Senator Elizabeth Warren

If you want to know what Senator Elizabeth Warren has done, CNBC's censorship defines how effectice our Massachusetts Senator is.

MSM can't deal with a well-informed, articulate Senator like Elizabeth Warren.


MUST WATCH: The Video CNBC Tried To Hide From The Internet. They Probably Shouldn't Have Done That. [contains + 10 minute version]







Elizabeth Warren's Takedown Of CNBC Removed From YouTube (UPDATED)


CNBC pulls video of Sen. Warren smacking down host over Glass ...

MUST WATCH: The Video CNBC Tried To Hide From The Internet ...

Elizabeth Warren fights for Glass-Steagall on CNBC!

Please add your support!

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If you like great TV debate clashes and you like Elizabeth Warren, you'll love her square-off with a ridiculous CNBC host yesterday.

Watch Warren fight for her Glass-Steagall Wall Street reform bill, and join over 100,000 others in supporting it!

 

-- Adam Green, PCCC co-founder

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ELIZABETH WARREN'S EMAIL THIS WEEK:

 

 

About a year ago, on the campaign trail, I asked PCCC members to join with me in pushing for a new Glass-Steagall bill.

 

This law stopped investment banks from gambling away people's life savings for decades -- until Wall Street successfully lobbied the regulators to chip away at the rules in the 1980s and Congress to repeal it entirely in 1999.

 

Over 100,000 people joined the fight. And now, I am proud to introduce the 21st Century Glass-Steagall Act -- along with Republican John McCain, Independent Angus King, and Democrat Maria Cantwell -- as my first big banking bill in the U.S. Senate.

 

Will you join over 100,000 of us in calling for more Wall Street reform, starting with a new Glass-Steagall Act? Sign here!

 

We learned during the 2008 financial crisis that Wall Street is not just taking risks with their own money -- they are taking risks with the whole economy.

 

A new Glass-Steagall would separate high-risk investment banks from more traditional banking. It would allow Wall Street to take risks, but not by dipping into the life savings and retirement accounts of regular people.

 

And by making banks smaller, a new Glass-Steagall could also help put an end to banks that are "too big to fail" -- further avoiding costly taxpayer bailouts.

 

Please help us pass a new Glass-Steagall Act. Join the fight here.

 

I've already talked about this petition on MSNBC, and I'll keep my Senate colleagues informed of the growing public support for this reform.

 

By mobilizing people across the nation, we can get this done.

 

Thank you,
Senator Elizabeth Warren

PAY ATTENTION TO WHO IS CRITIZING SENATOR ELIZABETH WARREN - How many are the already Bought-And-Paid-For who have accepted generous contributions from Wall Street?

7/12/13 at 11:45 AM

 

Elizabeth Warren’s Long Game Against Wall Street

She's doing more than you think.



Yesterday, Senator Elizabeth Warren undertook a big act of financial rabble-rousing, by introducing a bill that would reinstate key provisions of the 1933 Glass-Steagall Act that were repealed in 1999.

The new bill would essentially force big bank holding companies like Citigroup and Bank of America to split in half — commercial banking on one side, investment banking on the other — and hypothetically make the entire banking system safer and less crisis-prone by (a) shrinking banks, and (b) reducing the amount of risky stuff that goes on at the commercial banks where normal people keep their savings accounts. She's calling this bill the "21st Century Glass-Steagall Act" and promoting it using the slogan "Banking should be boring."

The bill, which Warren has already said won't get support from the Senate Banking committee, is the second piece of legislation Warren has sponsored since taking office that has virtually no chance of passing. In May, she introduced the Student Loan Fairness Act, which for one year would bring student loan interest rates down to the rates the Federal Reserve charges banks. That bill was called "embarrassingly bad" by the Brookings Institution, and the new one isn't faring much better among policy wonks.

So, with two largely symbolic bills in seven months in office, the question must be asked: What is

Elizabeth Warren really doing here?

One theory, held by most of the Wall Streeters I've spoken with about Senator Warren, is that she's simply playing for attention. They see her grandiose bills and made-for-YouTube tirades against financial excess and lax regulation as shallow populism, designed to garner reelection, solicit donations, and boost her reputation as a badass. Even one ex-financier I spoke to recently said he thought Warren was doing "showy stuff," not meant to make it into actual law.

The second theory, also held by some conservatives and financial-industry lobbyists I've spoken to, is a variation on the first and posits that Senator Warren is basically the Steve Stockman of the left — a principled true-believer whose refusal to abide by the horse-trading, pragmatic legislative process leaves her with a bunch of unsupportable, silly-sounding bills. In this theory, getting attention isn't the goal, but it often looks that way.

But there's a third theory. It's the one that acknowledges that Senator Warren is, pound-for-pound, one of the smartest and savviest legislators in Congress, and imputes to her a far more complicated motive than simple attention-seeking or "gesture politics."

It's the long-game theory.

This theory says that Senator Warren isn't trying to change individual laws, so much as move the entire political discussion of the financial sector to a different rhetorical arena and force other legislators to join her there. In this theory, Warren's anti-bank bills and activism aren't meant mainly for her constituents in Massachusetts, for the Internet audience, or even for Wall Street. They're directed to her fellow legislators. And their message is simple: On issues involving Wall Street, the center isn't where you think it is.
 

Wall Street, and finance generally, is one of the issues where the views of Congress have traditionally differed sharply from the views of the masses. Most surveys show that a vast majority of Americans support tougher regulation on banks; yet, because the financial sector's campaign contributions and lobbyists have an outsize impact on Congress, the debate about how to rein in Wall Street excess has taken place on the financial sector's turf. On Main Street, around 60 percent of people think Wall Street banks are too big and should be broken up. But to find that position in Washington, you've typically had to look to the leftmost fringes.

Now Senator Warren, along with other pro-regulation legislators like Sherrod Brown and David Vitter, are shifting the center. The Brown-Vitter bill, which would have basically broken up banks by imposing tougher capital requirements on large financial institutions, won a nonbinding 99–0 vote in the Senate and was taken seriously by legislators in both parties. (Brown-Vitter did considerably less well when it came to getting actual, binding support.) For her 21st Century Glass-Steagall bill, Senator Warren has brought aboard co-sponsor Senator John McCain — a truly amazing about-face, given that McCain not only voted for the original Gramm-Leach-Bliley Act that repealed the original Glass-Steagal, but hired that bill's lead sponsor, Phil Gramm, as a senior economic adviser for his 2008 presidential run.

Senator Warren's regulatory push hasn't changed Wall Street yet. Most financial regulations that take actual effect are written by agencies like the CFTC and the SEC. And in those agencies, debates about how Wall Street should be regulated still take place in fairly small windows. (Commissioners might disagree about how to regulate, say, overseas derivatives trading, but nobody in the CFTC is proposing outlawing certain kinds of derivatives entirely.)
 

But it's entirely possible that Senator Warren is proposing reforms she knows have no chance of passage, simply to widen the boundaries of debate. This is a basic tenet of negotiation. If you want a 20 percent raise, you ask for a 40 percent raise. But this isn't traditionally how the game over financial regulations has been played. By loudly advocating for policies that are outside the narrow confines of traditional political acceptability, she's expanding what political theorists call the Overton window and forcing other politicians to consider more moderate views that would have seemed fringe several years ago.
 

The new Glass-Steagall bill doesn't make a tremendous amount of sense. As Senator Warren herself told Andrew Ross Sorkin last year, repealing Glass-Steagall wouldn't have prevented the financial crisis or stopped the $6 billion London Whale trading losses at JPMorgan Chase. Bear Stearns and Lehman Brothers were both investment banks with no commercial banks attached to them, and their activities wouldn't have been prevented under the original Glass-Steagall. Neither would the activities of AIG, Fannie Mae, or Freddie Mac. And, as Matt Levine notes, the primary drivers of the financial crisis — mortgage lending and the use of derivatives like credit default swaps — were both permissible under the old Glass-Steagall regime.

If Senator Warren herself is willing to admit that reinstating Glass-Steagall's bank-separation provisions wouldn't have prevented the financial crisis, she must have another motive for introducing it. And I suspect it's more complicated than grandstanding or staying true to principles.

The truth is that many senators don't know what capital ratios or rate swaps are, never mind being able to write legislation around them. And in the same way that Wall Street's informational advantage gives it an automatic edge over ordinary investors, Warren's knowledge of the financial markets gives her automatic authority in Congress. Even if she's a freshman senator, her knowledge has allowed her to coalition-build like a veteran. And that ability — not a single bill or years of Internet fame — is what could make her quest to reform Wall Street successful.
 

Bankers and their lobbyists shouldn't be worried that Senator Warren's new Glass-Steagall legislation will pass. It won't. And passing is largely beside the point. The more interesting achievement is that she's managed to bring ideas like these into the realm of political acceptability and get support from both sides of the aisle for them. Warren's "make banking boring" campaign may look silly to finance-world cynics, but it's entirely possible that she's engineering a new political consensus that will do much more damage to Wall Street in the long term than simply breaking up a few banks.

[21st Century Glass-Steagall Act [PDF]]


http://nymag.com/daily/intelligencer/2013/07/elizabeth-warrens-long-game-against-wall-street.html