If Hillary Clinton wants to shut down the populist surge of Sen. Bernie Sanders once and for all, she’ll need to do a better job of explaining, and perhaps untangling, her complicated romance with Wall Street.
This includes not only the massive donations her campaign and the Clinton Foundation have received from gigantic financial firms, but the private speeches she has delivered to banking executives for eye-popping sums in excess of $250,000 per talk.
In a country where 42% of all employees are working for $15 an hour or less and a majority of voters want a higher minimum wage, Democrats seen as too close to Wall Street risk a backlash at the polls. The populist unease was on display during the most recent presidential debate, when Sanders, a socialist firebrand, accused Clinton of fostering, and benefiting from, a cozy relationship with big-money interests.
“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?” Sanders asked rhetorically. “You know, maybe they’re dumb and they don’t know what they’re going to get, but I don’t think so.”
Irritated by the accusation, Clinton jumped in, complaining that Sanders “has basically used his answer to impugn my integrity,” then pivoted to a novel defense of her actions — namely, casting her catering to Wall Street interests as an act of patriotism in the wake of the destruction of the World Trade Center.
“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,” said Clinton. “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.”
As a debate maneuver, this proved to be an effective answer that drew audience applause and changed the subject — for the moment. But it doesn’t answer the question of who’s giving money to Clinton, and what they expect in return.
One clue comes from the Open Secrets database of the Center for Responsive Politics watchdog group, which analyzed $37 million of the donations to Clinton’s campaign committee — about 62% of the total — and found $3.2 million of that came from commercial banks and from securities, investment and financial firms, more than any other sector except lawyers and “retired” people who are sufficiently well-off to donate money, although they don’t work.
Another index of the candidate’s closeness to Wall Street comes from the website of the Clinton Foundation, which lists the places where Bill, Hillary and Chelsea Clinton give speeches and how much they get paid for them. It turns out Hillary Clinton has spoken to Citibank, Goldman Sachs, JP Morgan Chase and Carlyle Investment Management and earned between $250,000 and $500,000 for each talk. That translates into a minimum of $1 million and as much as $2 million for giving four speeches.
One wonders what pearls of wisdom could be worth such enormous sums. The answer, according to William Cohan, the author of “Money and Power: How Goldman Sachs Came to Rule the World,” is that the big banks see Clinton as one of their own.
“The big bankers love Clinton, and by and large they badly want her to be president. Many of the rich and powerful in the financial industry — among them Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO James Gorman, Tom Nides, a powerful vice chairman at Morgan Stanley, and the heads of JPMorganChase and Bank of America — consider Clinton a pragmatic problem-solver not prone to populist rhetoric. To them, she’s someone who gets the idea that we all benefit if Wall Street and American business thrive,” wrote Cohan in Politico.
As for Clinton’s frequent promises to fight for middle-class voters and rein in Wall Street with new regulations, Cohan says the bankers aren’t worried. “They dismiss it quickly as political maneuvers,” he wrote. “None of them think she really means her populism.”
This is, after all, the former first lady whose husband, Bill, supported and signed into law the Gramm-Leach-Billey Act of 1999. The law effectively repealed the Glass-Steagall Act, a cornerstone of Depression-Era legislation that protected users of ordinary commercial banks from the wild swings and financial risk of Wall Street.
Bill Clinton’s sweeping deregulation, according to critics, gave banks and insurance companies the ability to merge and grow into too-big-to-fail giants, and allowed them to take on risky bets that helped trigger the financial crisis of 2008.
“By the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework,” is how one critic put it in 2008. “Instead of establishing a 21st century regulatory framework, we simply dismantled the old one.”
That critic was then-candidate Barack Obama, who was on his way to defeating Hillary Clinton for the Democratic presidential nomination.
Eight years later, Clinton faces another populist critic of deregulation, and appears closer than ever to the banks that have showered her with millions in political donations and personal speaking fees. Barring a change in her approach, Clinton should expect to hear more criticism — much more — from Sanders and other left-leaning Democrats.