By William K. Black
April 17, 2016 Bloomington, MN
Hillary Clinton uses a rhetorical device that is too clever by half. Whenever Bernie Sanders points out that she continues to take millions of dollars for her campaign and over $650,000 personally from the infamous “Vampire Squid” whose frauds caused the financial crisis she responds that this means that Bernie is attacking President Obama too, for in 2008 his campaign’s largest donor was those same Wall Street felons. She then says that the Dodd-Frank Act proves that campaign contributions do not affect elected officials. Her devotion to Wall Street funding and her statement that campaign funds have no effect help explain why she does so poorly in the polls on credibility. As I explained in a prior column, academic research confirms what we all know from life – campaign contributions play a substantial role in the decisions of elected officials. Indeed, even Paul Krugman’s lecture notes show that he agrees with this point. (Disclosure: I am an adviser to Bernie on economics, regulation, and criminology.)
President Obama began his term of office by slandering the American people who wanted him to restore the rule of law and bring the banksters to justice. Simon Johnson and James Kwak, the authors of Thirteen Bankers, cite Obama’s claim to the 13 bankers at the infamous March 31, 2009 meeting so close to the start of his term of office that he was all that was protecting them from the public’s “pitchforks” as the defining event of the administration on financial issues.
We chose this meeting because it aptly symbolizes the solidarity between the new Obama administration and the major banks at the depths of the financial crisis and recession. Speaking with reporters after the meeting, White House press secretary Robert Gibbs said, “We’re all in this together,” a phrase repeated by multiple bank CEOs. This contrasted with the new Franklin Delano Roosevelt administration of 1933, which largely froze out the bankers, much to their chagrin.
This is also the meeting at which Obama said, “My administration is the only thing between you and the pitchforks.” This was the point at which the government had to decide if it would defend the financial oligarchy from populist outrage, or whether it would reform the financial system that brought us the financial crisis and severe recession. We do not think it was an easy choice. But ultimately Obama and his advisers chose to bet on the bankers they knew. The result has been even larger banks and an even more concentrated financial sector.
The White House, hilariously, tried to spin this meeting as the President being tough on the bankers, but Johnson and Kwak easily saw through this early veil of PR. The administration’s own legal pleadings now admit that Obama was meeting with the leaders of many of the most destructive criminal organizations in the world, but he treated the CEOs as if they and the banks they dominated were the administration’s key allies – “We’re all in this together” was Obama’s catchphrase. Obama’s characterization of the American people was a blood libel. The American people do not want mob rule, we want justice. We want the criminals prosecuted who led the fraud epidemics that caused the financial crisis prosecuted.
Did Obama’s record receipt of Wall Street funds matter? Actions speak far louder than President Obama or Secretary Clinton’s words. How many prosecutions has the Obama administration brought of the Wall Street elites that led the three most destructive epidemics of financial fraud in history? Those are the epidemics of appraisal fraud, “liar’s” loans, and the subsequent resale of these fraudulently originated mortgages through fraudulent “representations (reps) and warranties. The answer is zero. How many of the systemically dangerous banks have been ordered by the Obama administration to shrink a level that they no longer endanger the global economy? The answer is zero. How many times has President Obama said that the crisis was driven by elite Wall Street frauds? The answer is zero. How many times has President Obama fired his Attorney General for failure to prosecute the elite Wall Street felons? The answer is zero.
Krugman claims that the crisis was brought on only by the predatory loans of small, unregulated lenders in the “shadow” sector. That is false, as I will document in detail in a subsequent article, but even if it were true it would pose an obvious question – how many “C” suite leaders of the “shadow” lenders has the Obama administration prosecuted? The answer is zero. “Shadow” lenders also made very large political contributions.
Hillary cannot even bring herself to use the words “fraud” and “predation” to charge Wall Street and shadow elites with their crimes. Instead, she says that no one is too big to prosecute – even though the last decade has proven the opposite. The most Hillary is able to bring herself to charge Wall Street’s felons with is “shenanigans” – which means “youthful pranks.” Yep, Hillary thinks that Wall Street’s elite banksters were just a bunch of 14-year old males out on the equivalent of a “joy ride” in dad’s car. Her refusal to denounce the elite fraudsters and their crimes demonstrates that she is unwilling to use even the most tepid words against them lest she and Bill lose their millions of dollars from their Wall Street patrons. How is she going to actually prosecute the elite Wall Street criminals and break up the systemically dangerous Wall Street banks if she cannot even bring herself to condemn their fraud epidemics?
Fortunately, Bill Clinton is the gift that keeps on giving. He has just given a speech denouncing the Democratic Party’s base, the progressives who are the most loyal and strongest supporters of the Democratic Party. He denounced them because a majority of progressives support Bernie. His fiasco when he tried to claim that Black Lives Matter protesters were defending the murderers of black children because they objected to Hillary’s adopting and using the great slander about black “super predators” being sub human was an unscripted departure from his talk. Bill’s slander of progressive Democrats, however, was clearly a “joke” he had rehearsed and was eager to deliver.
“One of the few things I really haven’t enjoyed about this primary, I think it’s fine that these young students have been so enthusiastic for her opponent and… sounds so good: ‘Just shoot every third person on Wall Street and everything will be fine,’” Clinton said at an event in New York.
Note that Bill hid behind the “joke” label to spread the innuendo that the base of the Democratic Party was a murderous mob suffused with hate for anyone who worked on Wall Street. The truth is the opposite. The base of the Democratic Party wants justice, which requires that no one is above the rule of law. The Wall Street and shadow banksters have both been allowed to commit the most destructive financial frauds in history with total personal impunity. That isn’t the fault of the American people, but of the leaders who have destroyed the rule of law when it comes to finance. Bill Clinton was one of those leaders.
Please review, and if you agree, support the detailed plan of the Bank Whistleblowers United to restore the rule of law to finance. BWU is a non-partisan group that asks the supporters of every candidate to ask him or her to pledge to implement the BWU plan and campaign pledge.