There is trouble brewing among two Democratic presidential hopefuls concerning Wall Street banks and regulation. Last night, former Secretary of State Hillary Clinton and Sen. Bernie Sanders went toe-to-toe in a Democratic debate and ultimately revealed that the two have vastly different viewpoints on how to rein in large financial firms.
Earlier this week, Clinton's ties with financial institutions were in question for accepting $675,000 from Goldman Sachs for delivering three speeches. “Well, I don’t know. That’s what they offered,” she told CNN anchor Anderson Cooper Wednesday night during a Democratic town hall meeting. After Sanders suggested that she is being “bought” by donors, she accused Sanders of formulating an “artful smear” to her campaign.
"I find it ironic that Secretary Clinton is publicly adamant about breaking up Wall Street banks, yet she readily accepted nearly $700,000 from Goldman Sachs to deliver three speeches," said Ed Delgado, President and CEO of The Five Star Institute. "It places her candidacy and comment in conflict."
In the Thursday debate, Clinton defended her Wall Street ties, the Wall Street Journal noted. Clinton said that she has never “changed a view or a vote because of any donation I ever received."
Clinton has voiced her intentions of regulating Wall Street on a number of occasions, but only plans to do so as a last resort.
"Yes. Yes, yes, yes, yes, yes. Their shareholders have to know that yes, they will fail. And if they're too big to fail, then under my plan and others that have been proposed they may have to be broken up. So I've said, if the big banks don't play by the rules, I will break them up," Clinton stated. "And I will also go after executives who are responsible for the decisions that have such bad consequences for our country. There are a lot of things we've got to do in our country, reigning in Wall Street is certainly one of them."
She continued, “I would also ensure that the federal government has—and is prepared to use—the authority and tools necessary to reorganize, downsize and ultimately break up any financial institution that is too large and risky to be managed effectively. No bank or financial firm should be too big to manage. The proper role of Wall Street is to help Main Street grow and prosper. When our financial sector works the right way, it helps families buy their first homes, entrepreneurs start and grow small businesses and hardworking Americans save for retirement. Rather than pursuing the kind of high-stakes speculation that devastated our economy before, Wall Street should focus on building an economy that creates good-paying jobs, rising incomes and sound investments so that more families can achieve the security of a middle-class life.”
Clinton cleaned up her statements about Wall Street a bit in last night's debate, but openly admitted that she has spoken with Wall Street firms. “When I left the secretary of state’s office, like so many former officials, military leaders, journalists, others, I did go on the speaking circuit. I spoke to heart doctors, I spoke to the American Camping Association, I spoke to auto dealers and yes, I spoke to firms on Wall Street," she said.
Sanders has made clear throughout his campaign that he wants to break up the biggest U.S. banks because of the threat they pose to the overall economy.
“We can 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,” Sanders noted. “I’ll rein in Wall Street behavior, 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. Greed, fraud, dishonesty and arrogance, these are the words that best describe the reality of Wall Street today."
Sanders further stated, “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. 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."
In the Thursday debate, the Vermont senator noted, “In my view, the business model of Wall Street is fraud. And that is what has to change," according to the Wall Street Journal. He also mentioned that none of the executives at these institutions have been held accountable for the onset of the financial crisis.
Sanders previously noted that he intends to take a completely different approach from fellow presidential candidate Clinton when addressing greed within Wall Street.
“My opponent says that as a senator she told bankers to ‘cut it out’ and end their destructive behavior,” Sanders explained. “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 and their lobbyists regulate Congress. We must change that reality and as president I will.”