Wall Street Is Doing Good But Main Street's Economy Is In The Crapper

 

Trump keeps bragging about how well Wall Street is doing, but that doesn't affect most Americans. For them, the economy is not doing well at all. Robert Reich explains:

Job growth slowed considerably last month. Employers added a less-than-expected 57,000 jobs in June, according to Labor Department data out today.

 

That’s far below the 129,000 jobs added in May and comes amid high anxiety about the state of the American economy. 

According to today’s report, average hourly earnings increased by 3.5 percent. But prices are increasing at an annual rate of 4.2 percent.

What do you get when prices are increasing faster than wages? You get people who are becoming poorer. And what do you get when people become poorer? Angry voters. 

Trump is constantly talking about the strength of the stock market. This morning he even shared a link to an article called “S&P 500 closes with strongest quarter since 2020.” Yesterday, when asked about the huge profits he’s made off his stock trades, he countered, “Well, you know why I’m profiting? Cause the stock market’s going up. Everybody’s profiting.”

The truth is most Americans aren’t profiting in the stock market. The richest 10 percent own over 90 percent of the value of all shares of stock. The richest 1 percent own over half of the value of all shares of stock.

 

Trump frequently points to 401(k) accounts as evidence of Americans benefiting from the strong stock market. But only around a third of working-age individuals have any savings at all in 401(k) accounts. About 40 percent of all Americans have no retirement savings whatsoever.

Bottom line: It’s a lousy economy. Anyone who voted for Trump in 2024 should have buyer’s remorse.

Wall Street Opposes Socialism (Unless It's For Them)

 

The giant financial institutions don't like the idea of government helping ordinary citizens. They call that socialism. But they love for the government to bail them out of trouble and provide loopholes and other financial advantages. In other words. They believe socialism should be reserved for Wall Street!

Here's part of what Robert Reich says about this ridiculous view:

The stock market is gyrating wildly in light of Putin’s aggression in Ukraine, but Wall Street traders are doing just fine. Bad news is good news for traders who make money off volatility.

After all, in the year of Delta and Omicron, climate chaos, Trump Republican attacks on democracy, bitter divisiveness, a calamitous exit from Afghanistan, and accelerating inflation, the Street’s biggest banks have reaped record profits. Bonuses are through the front Porsche. Hundreds of traders have racked up seven and eight-figure bonanzas. Morgan Stanley paid out $35 million to its CEO, James Gorman. Goldman Sachs, $35 million to David Solomon. Bank of America, $32 million to Brian Moynihan. Citigroup, $22.5 million to Jane Fraser. And, not the least, JPMorgan, which paid out $34.5 million to Jamie Dimon — plus a retention bonus of $50 million.

Dimon has become a spokesman for the Street and one of the most influential CEOs on Capitol Hill. His public statements are a barometer for what America’s financial oligarchs are thinking.

They are not fretting about what the Fed’s incipient fight against inflation is likely to do to jobs and wages. They’re not worried about the shrinkage of America’s middle class or the precariousness of the working class and poor. They are unsettled by what they consider creeping socialism. In an annual letter to JPMorgan shareholders, Dimon warned that socialism would be a “disaster for our country” because it produces “stagnation, corruption and often worse.”

It should be remembered that Dimon was at the helm in 2008 when JPMorgan received a $25 billion socialist-like bailout after it and other Wall Street banks almost tanked because of their reckless loans. Instead of letting the market punish the banks (which is what capitalism is supposed to do), the Obama administration bailed them out and eventually levied paltry fines which the banks treated as the cost of doing business. According to the Justice Department, JPMorgan acknowledged it had regularly and knowingly sold mortgages that should have never been sold. (Presumably this is where the “stagnation, corruption and often worse” come in.)

Millions of Americans lost their homes, savings, and jobs in the financial crisis. But neither Dimon nor any other top Wall Street executive was held accountable. If this isn’t socialism for rich bankers, what is it?

America’s five largest banks, including Dimon’s JPMorgan, now control almost half of all deposits, up from 12 percent in the early 1990s. Because of their size, these banks are now considered “too big to fail.” This translates into a hidden subsidy of some $83 billion a year — the total estimated discount that creditors and depositors give banks whose solvency is effectively guaranteed by the government. More socialism for rich bankers.

Dimon was instrumental in getting the big Trump tax cuts through Congress. They have saved JPMorgan and the other big banks over $50 billion so far.

But Dimon and JPMorgan are doing their bit to make sure average Americans experience the full consequences of harsh capitalism. Although federal regulators waived overdraft fees for big banks when the economy took a dive in 2020, Dimon and JPMorgan refused to waive overdraft fees for borrowers struggling to make ends meet amid pandemic lockdowns. Dimon and JPMorgan reaped $1.46 billion in overdraft fees — the most of any big bank. . . .

Dimon isn’t really concerned about widening inequality. He’s not really concerned about socialism, either. Nor about any of the other crises hitting America, which expose Americans to more economic uncertainty and insecurity than the citizens of any other advanced economy. His real worry is that one day America might end the type of socialism he and other denizens of Wall Street depend on – bailouts, regulatory loopholes, subsidies, and tax breaks.

Elizabeth Warren Terrifies The Wall Street "Snowflakes"

(Image is by Sarah Grillo at Axios.com.)

Wall Street is starting to get worried. They have watched Elizabeth Warren climb into the top ranks of Democratic presidential candidates, and that terrifies them. More than any other candidate, they know that Warren is serious about regulating the economy so that the 90% get a fair deal. They certainly don't want that. They have enjoyed being the beneficiaries of our current oligarchy.

Here's what Nobel Prize-winning economist Paul Krugman has to say about these Wall Street "snowflakes":

Given all the recent focus on health policy, you might think that the medical-industrial complex would be heavily involved in the Democratic primary race, going all-out to block Elizabeth Warren. And a coalition of drug companies, insurers and hospitals is indeed running ads attacking “Medicare for all.”

But the health industry’s political role has been relatively muted so far. Partly this may reflect realism: Even if Warren becomes president, the chances of getting Medicare for all through Congress are small. It may also reflect the surprising openness of doctors to reform. While the American Medical Association still officially opposes single-payer, at a recent meeting, 47 percent of the delegates voted to drop that opposition.

No, the really intense backlash against Warren and progressive Democrats in general is coming from Wall Street. And while that opposition partly reflects self-interest, Wall Street’s Warren hatred has a level of virulence, sometimes crossing into hysteria, that goes beyond normal political calculation.

What’s behind that virulence?

First, let’s talk about the rational reasons Wall Street is worried about Warren. She is, of course, calling for major tax increases on the very wealthy, those with wealth exceeding $50 million, and the financial industry is strongly represented in that elite club. And since raising taxes on the wealthy is highly popular, it’s an idea a progressive president might actually be able to turn into real policy.

Warren is also a big believer in stricter financial regulation; the Consumer Financial Protection Bureau, which was highly effective until the Trump administration set about gutting it, was her brainchild.

So if you are a Wall Street billionaire, rational self-interest might well induce you to oppose Warren. Rationality does not, however, explain why a money manager like Leon Cooperman — who just two years ago settled a suit over insider trading for $5 million, although without admitting wrongdoing — would circulate an embarrassing, self-pitying open letter denouncing Warren for her failure to appreciate all the wonderful things billionaires like him do for society.

Nor does it explain why Cliff Asness, another money manager, would fly into a rage at Warren adviser Gabriel Zucman for using the term “revenue maximizing” — a standard piece of economic jargon — describing it as “disgustingly immoral.”

The real tell here, I think, is that much of the Wall Street vitriol now being directed at Warren was previously directed at, of all people, President Barack Obama.

Objectively, Obama treated Wall Street with kid gloves. In the aftermath of a devastating financial crisis, his administration bailed out collapsing institutions on favorable terms. He and Democrats in Congress did impose some new regulations, but they were very mild compared with the regulations put in place after the banking crisis of the 1930s.

He did, however, refer on a few occasions to “fat cat” bankers and suggested that financial-industry excesses were responsible for the 2008 crisis because, well, they were. And the result, quite early in his administration, was that Wall Street became consumed with “Obama rage,” and the financial industry went all in for Mitt Romney in 2012.

I wonder, by the way, if this history helps explain an odd aspect of fund-raising in the current primary campaign. It’s not surprising that Warren is getting very little money from the financial sector. It is, however, surprising that the top recipient isn’t Joe Biden but Pete Buttigieg, who’s running a fairly distant fourth in the polls. Is Biden suffering from the lingering effects of that old-time Obama rage?

In any case, the point is that Wall Street billionaires, even more than billionaires in general, seem to be snowflakes, emotionally unable to handle criticism.

I’m not sure why that should be the case, but it may be that in their hearts they suspect that the critics have a point.

What, after all, does modern finance actually do for the economy? Unlike the robber barons of yore, today’s Wall Street tycoons don’t build anything tangible. They don’t even direct money to the people who actually are building the industries of the future. The vast expansion of credit in America after around 1980 basically involved a surge in consumer debt rather than new money for business investment.

Moreover, there is growing evidence that when the financial sector gets too big it actually acts as a drag on the economy — and America is well past that point.

Now, human nature being what it is, people who secretly wonder whether they really deserve their wealth get especially angry when others express these doubts publicly. So it’s not surprising that people who couldn’t handle Obama’s mild, polite criticism are completely losing it over Warren.

What this means is that you should beware of Wall Street claims that progressive policies would have dire effects. Such claims don’t reflect deep economic wisdom; to a large extent they’re coming from people with vast wealth but fragile egos, whose rants should be discounted appropriately.

Trump/GOP Readying An Attack On The CFPB

The Republicans have never liked the Dodd-Frank Act (or the Consumer Financial Protection Bureau created by that act to protect consumers from abuses by the financial sector), and now that they have a Republican in the White House they are making plans to change the Act -- making it far more bank-friendly. Trump himself said last Monday that he planned to "do a big number on Dodd-Frank".

While Trump hasn't released his plans to attack Dodd-Frank, the GOP in Congress already has a bill. Rep. Jeb Hensarling (caricatured here by DonkeyHotey) is ready to introduce the CHOICE Act -- an odious bill that would remove many of the regulations imposed on the financial sector by Dodd-Frank. It would also de-fang the CFPB, making it much harder to hold the financial industry responsible for abusing consumers.

Here is part of an excellent article by Jared Bennett for the Economic Policy Institute. The part of the article I'm reposting concerns the CFPB, and how the CHOICE Act would change it.

The Choice Act also targets the Consumer Financial Protection Bureau, which Dodd-Frank established to protect consumers from “unfair, deceptive or abusive practices” of the financial sector, according to the law.

But Hensarling believes the agency is an example of government run amok, claiming the CFPB has “infringed on the economic freedoms of consumers.”

That sentiment, along with Trump’s election win, “will result in a sea change at the CFPB,” said Alan Kaplinsky, who leads the Consumer Financial Services Group at the law firm Ballard Spahr. “There’s a lot of discontent among the companies that are regulated and supervised and who have become the target of the CFPB.”

The most likely change would replace the CFPB’s individual director, appointed by the president and confirmed by the Senate, with a five-member commission that would have three Republicans during the Trump administration. The panel would be subject to congressional oversight and appropriations. Bank executives and their allies in Congress say the agency’s current director — former Ohio Attorney General Richard Cordray, a controversial Obama appointment initially made during a congressional recess and confirmed by the Senate only 18 months later — has too much power and is unaccountable to Congress.

CFPB crackdowns on practices the agency deems “abusive” have led some Republicans to charge that the agency is straying from enforcement into advocacy. When the CFPB announced new rules regarding the payday-loan industry, which has been charged with targeting low-income individuals with high-interest loans that can trap them in long-term debt, Hensarling fired back at Cordray.

“Accountable to no one, he alone decides for all Americans whether they can take out a small-dollar loan to meet emergency needs,” Hensarling said in a press release.

The proposed changes to the CFPB, which include repealing the CFPB’s authority to ban products and services that regulators deem abusive, are aimed at reducing what some Congress members believe are controversial actions, like the payday-lending rules.

But the agency still should enforce the law under a Republican-led CFPB, Kaplinsky said. “There are plenty of clear cut violations of law that [the CFPB] can target without taking extreme positions where the industry is caught off guard and surprised,” he said.

Sens. Mike Lee, R-Utah, and Ben Sasse, R-Neb., wrote a letter to Pence this month urging the administration to fire Cordray. Neugebauer, one of the sponsors of the Choice Act, is said to be Trump’s choice to head the agency.

Proponents of reform also say a five-person commission would allow for more industry input in CFPB decision making. Changing the CFPB’s funding source from the Federal Reserve to congressional appropriations also would make the agency more accountable by placing it under the supervision of elected officials in Congress.

Or, the change could inject politics into the agency, say CFPB supporters.

“What we know about commissions is they tend to be gridlocked,” said Yana Miles, policy counsel at the Center for Responsible Lending, a nonprofit research organization that advocates for fair lending practices.

A divided commission may prevent the agency from quickly responding to abusive practices by financial institutions, critics of the proposed structure argue.

“It wasn’t that long ago that we saw the waves of predatory lending that nearly destroyed our economy,” Miles said. The CFPB “is the one thing out there standing between consumers and the wild wild west of the days leading up to the crisis.”

CFPB critics, nevertheless, have the courts on their side, so far. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruledlast year that the agency’s single-director structure is unconstitutional. The CFPB has asked the full D.C. Circuit to rehear the case.

Supporters say the CFPB is accountable to consumers, as illustrated by a record of punishing banks’ wrongdoing. Since opening its doors in 2010, CFPB actions have resulted in more than $11 billion in compensation or debt reduction to consumers. Among its major cases:

• One of its most high-profile decisions came last year, when the CFPB finedWells Fargo $100 million for opening accounts without customers’ consent, with another $35 million going to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles.
• The CFPB brought complaints in 2014 against Corinthian Colleges, a for-profit college accused of overselling the employability of its graduates, and ITT Educational Services, a for-profit institution accused of predatory student lending.
• On Jan. 18, the CFPB announced a lawsuit against Navient Corp., the nation’s largest student-loan servicer, for “systematically and illegally failing borrowers at every stage of repayment.”

The CFPB relied partly on its mandate to prevent abusive practices to pursue the Wells Fargo case, Miles said. Under changes in the Choice Act, “a Wells Fargo situation could pop up again and it would either not be addressed or would take a much longer time to get to it,” Miles said.

Changing the CFPB may not be so easy, despite Republicans’ control of Congress and a new White House occupant they see as an ally. Sen. Warren, who spearheaded the creation of the agency, warnedHensarling and his colleagues about the CFPB’s importance during a November conference of the Wall Street Journal’s CEO council, a group of influential business leaders.

“The Consumer Financial Protection Bureau is doing the people’s business. And it has its own fan club out there: It’s got the people it’s working for,” Warren said. “You try to take the legs out from underneath the Consumer Financial Protection Bureau — I think that’s not only a problem for Donald Trump and for the Republicans. I think this is something that the American people will say ‘enough.’”

Indeed, 56 percent of Trump voters want the CFPB either left alone (41 percent) or expanded (15 percent), according to a Morning Consult pollconducted in December. Likewise, 71 percent of Republican and Democratic voters said they supported the CFPB, according to a 2016 poll by Lake Research Partners.

Trump Favored The Rich/Wall Street With Cabinet Picks

The chart above was made from information in a recent Economist / YouGov Poll -- done between December 10th and 13th of a random national sample of 1,465 adults, with a margin of error of 3.1 points.

While Donald Trump may be happy with his cabinet picks, the general public is not. They believe those picks have shown too much concern for rich people and Wall Street -- and too little concern for the middle class, poor people, small business, working people, and ordinary Americans.

A Troubling Pattern

And the pattern continues. He has now chosen a billionaire Commerce Secretary (Wilbur Ross) called the "king of bankruptcy", who is famous for buying companies in financial trouble and laying off their workers. The Deputy Secretary of Commerce is also a Wall Street billionaire.

His pick to lead the Environmental Protection Agency is Scott Pruitt -- a friend of Big Oil, opponent of efforts by the EPA to make power plants and other industries clean up their pollution, and climate change denier. He will be sure to help roll back EPA restrictions on corporations -- and the result will be dirtier air and water.

And word now is he has chosen multi-millionaire Andy Puzder to be Secretary of Labor (who is CEO of CKE Restaurants Holdings (owners of Hardee's and Carl Jr's). He is opposed to raising the minimum wage, and to overtime pay recently mandated by the Obama administration. This corporate CEO (who makes more in one day than the minimum wage workers in his restaurants make in a year) is bad news for the hopes of workers.

Trump's picks seem to be perfect for accomplishing two things -- 1) rolling back all of the protections for workers and minorities of the past few decades, and 2) turning our government over to the giant corporations. The ones who aren't defenders of white privilege (Flynn, Bannon, Sessions) are Wall Street billionaires and corporate CEO's.

Ordinary and hard-working Americans will get no help from the Trump administration. This is now a government of the corporations, by the corporations, and for the corporations.

Warren Blasts GOP/Big Banks For Trying To Destroy CFPB

Here is the latest missive from Senator Elizabeth Warren (D-Massachusetts):

Why are the giant banks still fighting to kill off the Consumer Financial Protection Bureau? 

Why have Republicans advanced a bill to take the legs out from under the CFPB?  

Why did one Republican presidential candidate after another – including Donald Trump – promise that if they were in charge, they would repeal the Dodd-Frank financial regulations, including the CFPB?

We got a hint a few days ago: Wells Fargo proved that giant banks still think the rules don’t apply to them. Nope. They think they can cheat their customers, stuff their pockets with money, and still walk away.

Over the past five years, Wells Fargo created more than 2 million checking and credit card accounts that weren’t authorized by its customers. Employees who had strict sales quotas to hit would secretly open and transfer money in and out of those fraudulent accounts, costing thousands of customers millions of dollars in fees.

The new Consumer Financial Protection Bureau went after this fraud with everything they’ve got. Late last week, the CFPB announced that Wells Fargo customers are getting all of their money back and Wells Fargo will pay a record-breaking $100 million fine to the agency.  

Make no mistake – this business with Wells Fargo isn’t over. How could the bank create more than 2 million fake accounts without senior executives knowing? How could the bank fire more than 5000 low-level employees for misconduct without stopping to wonder whether there was a problem with the firm’s incentives or culture? I think there are more questions for Wells Fargo to answer.

But the CFPB has done its job: spearheading an investigation, watching out for consumers, imposing a fine, and making the whole stinky mess public. And that’s why the big banks and their Republican friends want to leash up the CFPB – because this is a government agency that is working for the people.  

The consumer agency investigates giant frauds, but it also helps people one at a time. The CFPB complaint hotline has a website and a phone number you can use when you have a problem with your bank, credit card, mortgage company, or student loan servicer. So far, the hotline has processed nearly a million complaints, big and small. Not only does the CFPB work to get you a response on your complaint, but they also use the information to find those large, widespread cases of fraud and abuse. 

Incidents like Wells Fargo come to light the more people contact the CFPB about banks’ bad behavior, so if you have a complaint, submit it here (or bookmark this website).

The Wells Fargo case is one more reason we need to fight for a strong Consumer Financial Protection Bureau. The big banks and financial institutions hate the CFPB, and they have bills pending in the House and Senate to get rid of it. The Republican Party’s 2016 platform calls for the CFPB to be “abolished.” The only way to stop the right-wing attacks on the consumer agency is for all of us to fight back.

The CFPB is on our side – but we need to use it and to fight for it.

Thanks for being a part of this,

Elizabeth

Nearly 3 Out Of 4 Say The U.S. Economy Is "Rigged"

Here's some more bad news for the Republican Party. Congressional Republicans want to give the rich (and the corporations) more tax cuts. They want to continue letting corporations export American jobs. They oppose raising the minimum wage. They want to cut Social Security benefits and raise the retirement age. They want to privatize Medicare. And they want to further weaken labor unions. In other words, they want to further tilt the economic playing field to benefit the rich and the corporations.

But that may not sell to well in this year's campaign. A recent CNN Marketplace / Edison Research Poll shows that 71% of the public already believes the economy is "rigged" to favor the rich. And 58% believes Wall Street does more to hurt most people than to help them, while 56% favors letting the government break up financial institutions that get "too big".

The prevailing opinion of the American public is against Wall Street, giant corporations, and the rich. They want them to pay more taxes -- not less. And they want new economic rules that will make the economy fair to all people. If the GOP doesn't wake up and smell the roses, they could well receive a real thrashing in the coming election.

Hillary Clinton Outlines Her Plan For Wall Street

(The cartoon image above is by Jeff Danziger at danzigercartoons.com. The photo of Hillary Clinton is from biography.com.)

In spite of what Bernie Sanders (and his supporters) would have you believe, Hillary Clinton does have a plan to deal with unfair Wall Street manipulation and malfeasance. And it's a good plan -- good enough to draw praise from Senator Elizabeth Warren and Nobel Prize winning economist Paul Krugman.

Here is how Clinton describes what she wants to do in an op-ed written for the New York Times:

SEVEN years ago, the financial crisis sent our economy into a tailspin. Over five million people lost their homes. Nearly nine million lost their jobs. Nearly $13 trillion in household wealth was wiped out.

Under President Obama, our economy has come a long way back. Our businesses have created more than 13 million jobs. People’s savings are being restored. And we have tough new rules on the books, including the Dodd-Frank Act, that protect consumers and curb recklessness on Wall Street.

But not everyone sees that as a good thing. Republicans, both in Congress and on the campaign trail, are dead-set on rolling back critical financial protections.

Right now, Republicans in Congress are working to attach damaging deregulation riders to the must-pass spending bill. They’re attempting to defund the Consumer Financial Protection Bureau. They want to roll back common-sense efforts to prevent conflicts of interest by financial managers. And they’re trying to undo constraints on risk at some of the largest and most complex financial institutions.

President Obama and congressional Democrats should do everything they can to stop these efforts. But it’s not enough simply to protect the progress we have made. As president, I would not only veto any legislation that would weaken financial reform, but I would also fight for tough new rules, stronger enforcement and more accountability that go well beyond Dodd-Frank.

My comprehensive plan has already won praise from progressives like Sherrod Brown and Barney Frank. Here’s what it would do.

First, we need to further rein in major financial institutions. My plan proposes legislation that would impose a new risk fee on dozens of the biggest banks — those with more than $50 billion in assets — and other systemically important financial institutions to discourage the kind of hazardous behavior that could induce another crisis. 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.

My plan would strengthen the Volcker Rule by closing the loopholes that still allow banks to make speculative gambles with taxpayer-backed deposits. And I would fight to reinstate the rules governing risky credit swaps and derivatives at taxpayer-backed banks, which were repealed during last year’s budget negotiations after a determined lobbying campaign by the banks.

My plan also goes beyond the biggest banks to include the whole financial sector. Some have urged the return of a Depression-era rule called Glass-Steagall, which separated traditional banking from investment banking. But many of the firms that contributed to the crash in 2008, like A.I.G. and Lehman Brothers, weren’t traditional banks, so Glass-Steagall wouldn’t have limited their reckless behavior. Nor would restoring Glass-Steagall help contain other parts of the “shadow banking” sector, including certain activities of hedge funds, investment banks and other non-bank institutions. My plan would strengthen oversight of these activities, too — increasing leverage and liquidity requirements for broker-dealers and imposing strict margin requirements on the kinds of short-term borrowing that also played a major role in spurring the financial crisis. We need to tackle excessive risk wherever it lurks, not just in the banks.

Second, I would appoint tough, independent regulators and ensure that both the Securities and Exchange Commission and the Commodity Futures Trading Commission are independently funded — as other critical regulators are now — so that they can do their jobs without political interference. I would seek to impose a tax on harmful high-frequency trading, which makes markets less stable and less fair. And we need to reform stock market rules to ensure equal access to information, increase transparency and minimize conflicts of interest.

Finally, executives need to be held more accountable. No one should be too big to jail. I would seek to extend the statute of limitations for major financial crimes to 10 years from five and enhance rewards for whistle-blowers. I would work to ensure that financial firms admit wrongdoing as part of settlements in instances of egregious misconduct, and increase transparency about the terms of settlement and the fines actually paid to the government. Fines should be more than just the cost of doing business to these companies — they should be an effective disincentive for illegal behavior.

And it shouldn’t just be shareholders and taxpayers who feel the pain when banks make bad decisions; executives should have skin in the game. When a firm pays a fine, I would make sure that the penalty cuts into executives’ bonuses, too. And I would fight to close the carried interest loophole that gives some fund managers billions of dollars in tax breaks: They should be taxed like every other citizen.

Republicans may have decided to forget about the financial crisis that caused so much devastation — but I haven’t. 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.

Hillary Clinton's Stand On Wall Street And The Corporations

(Photo of Hillary Clinton from hillaryclinton.com is by Elizabeth Chan.)

From hillaryclinton.com:

Hillary will: 

• Veto Republican efforts to repeal or weaken Dodd-Frank. 
• Tackle dangerous risks in the big banks and elsewhere in the financial system. 
• Hold both individuals and corporations accountable when they break the law. 

“Our banking system is still too complex and too risky … While institutions have paid large fines and in some cases admitted guilt, too often it has seemed that the human beings responsible get off with limited consequences – or none at all, even when they’ve already pocketed the gains. This is wrong, and on my watch, it will change.”

HILLARY CLINTON, JULY 13, 2015

The financial crisis showed how irresponsible behavior in the financial sector can devastate the lives of everyday Americans—costing 9 million workers their jobs, driving 5 million families out of their homes, and wiping out more than $13 trillion in household wealth. Hillary has a plan to reduce the risk of future crises and make our financial system fairer and more accountable. 

Hillary’s plan will tackle dangerous risks in the financial system: 

• Impose a risk fee on the largest financial institutions. Banks and financial companies would be required to pay a fee based on their size and their risk of contributing to another financial crisis.
• Close the Volcker Rule’s hedge fund loophole. The Volcker Rule prohibits banks from making risky trading bets with taxpayer-backed money—one of the core protections of the post-financial crisis Wall Street reforms. However, under current law these banks can still invest billions through hedge funds, which are exempt from this rule. Hillary would close that loophole and strengthen the law.
• Discourage excessive risk-taking by making senior bankers accountable. Senior managers should lose some or all of their bonus compensation when a large bank suffers losses that threaten its overall financial health.
• Make sure no firm is ever too big and too risky to be managed effectively.Hillary’s plan would give regulators more authority to force overly complex or risky firms to reorganize, downsize, or break apart.
• Tackle financial dangers of the “shadow banking” system. Hillary’s plan will enhance transparency and reduce volatility in the “shadow banking system,” which includes certain activities of hedge funds, investment banks, and other non-bank financial companies.
• Impose a tax on high-frequency trading. The growth of high-frequency trading has unnecessarily placed stress on our markets, created instability, and enabled unfair and abusive trading strategies. Hillary would impose a tax on harmful high-frequency trading and reform rules to make our stock markets fairer, more open, and transparent.

Hillary would also hold both corporations and individuals on Wall Street accountable by:

• Prosecuting individuals when they break the law. Hillary would extend the statute of limitations for prosecuting major financial frauds, enhance whistleblower rewards, and provide the Department of Justice and the Securities and Exchange Commission more resources to prosecute wrongdoing. 
• Holding executives accountable when they are responsible for their subordinates’ misconduct. Hillary believes that when corporations pay large fines to the government for violating the law, those fines should cut into the bonuses of the executives who were responsible for or should have caught the problem. And when egregious misconduct happens on an executive’s watch, that executive should lose his or her job.
• Holding corporations accountable when they break the law. As she enhances individual accountability, Hillary will make sure that corporations don’t treat penalties for breaking the law as merely a cost of doing business, so that we can put an end to the patterns of corporate wrongdoing that we see too often today.