Last week,
Sen. Bernie Sanders of Vermont launched what might be viewed as a campaign unto itself—the campaign to end "too big to fail." Sanders, who is also facing off against Hillary Clinton to be the Democratic nominee for president, introduced new legislation that aims to break apart the banking industry's juggernauts.
“If an institution is too big to fail, it is too big to exist,” he declared.
Sanders has introduced similar legislation two times before. His
website notes that the country's largest banks are "now 80 percent bigger than they were one year before the financial crisis in 2008 when the Federal Reserve provided $16 trillion in near zero-interest loans and Congress approved a $700 billion taxpayer bailout." And although his bill has zero chance of passing in a Republican-controlled Congress, big banks are still wary of its implications for the 2016 elections,
reports Kevin Cirilli.
“The prospects of it becoming law are nil,” said one banking lobbyist, who described Sanders’s legislations as “shrill, bombastic and misaligned.”
“But we care about whether this impacts Hillary and whether she’ll try to pander to the far left.”
Pandering is a word that's sometimes used when politicians actually pay attention to the message their base is sending them. And in a post-centrist era, you can expect to hear it a lot more often as an accusation Republicans hurl at Democrats. It used to be more so the province of Republicans, who routinely pandered to their social conservative, deficit-obsessed base to the exclusion of all else. But Democrats seem to have finally caught on to the fact that they can't win elections without exciting the people who are ideologically aligned with them—their Democratic base voters.
And so, the question is, will Hillary listen to Sanders' call to arms the way she listened to the Dreamers' call to action on immigration?
To find out, head the below the fold.
Rep. Brad Sherman (D-Calif.), who is sponsoring similar legislation in the House, said that any criticism of the legislation is coming from “top executives who control the biggest banks.”
“This isn’t about an election cycle,” Sherman said. “I am much more interested in what Hillary Clinton does as president in office than in a campaign. Campaigns are fun but governing is what matters.”
Still, Sherman said that he hopes the legislation, which even he conceded isn’t likely to become law this Congress, might move the needle for his party.
“I’m hoping that some time in the next few years we will have ‘too big to fail is too big to exist’ policy either by using existing laws or by passing new statutes,” Sherman said.
The behemoths
are already responding to the push they feel from Sanders' entry into the race and his ability to raise the profile of this issue in the process.
Senior executives from seven of the biggest U.S. banks gathered or dialed into a March 31 meeting on the 51st floor of the Bank of America Tower in New York to discuss the upcoming election cycle and how the firms can counteract what they view as false and damaging statements about large banks, according to emails reviewed by The Wall Street Journal and people familiar with the meeting.
The execs reportedly concluded they could do little to repair their image with the general public through traditional marketing (true), so they are instead focusing on campaign rhetoric, which undoubtedly means pressuring Hillary and her people not to jump on the Sanders/Warren bandwagon. They also hope to highlight the positive aspects of their participation in the economy and the modifications they have undertaken since the 2008 collapse.
But some industry executives also aspire to influence the Clinton camp by leveraging the outcome of the United Kingdom's recent election in which the Labour Party's anti-bank candidate, Ed Miliband, lost to the Conservative Party's David Cameron. Ben White reports:
“Cameron embraced the role of the financial sector in growing the U.K. economy and creating jobs, never once criticizing hedge funds, banks or the wealthy,” said a top executive at one of Wall Street’s largest firms. “Miliband ran against hedge funds and bankers, promising bonus and mansion taxes and lost big. Is that a lesson for Hillary as well?”
This executive, like several others who cited the U.K. election result as a warning to populists, declined to be identified by name or firm for fear of heavy backlash.
Carry on, my friend—all those anonymous hit jobs on "populists" are sure to win over American workers. Apparently, this guy missed the memo on that "warm and fuzzy" campaign to rebrand the banking industry even as it
continues to fleece consumers in pursuit of bigger profits. It seems the banks are finally running scared as they
start to feel the squeeze of the industry's new post-collapse rules.
Perhaps the time is right to revisit a favorite from Sen. Elizabeth Warren last December talking about the 2010 law that imposed new regulations on the financial industry:
"I agree with you," she said, addressing Citigroup by name from the Senate floor Friday night. "Dodd-Frank isn't perfect—it should have broken you into pieces."