Why did Paul Krugman and the Washington Post editorial board—both of whom know better—misrepresent that it was Sanders rather than the New York Daily News editorial board that was wrong about what Dodd-Frank provides, and about whether it would be Treasury or instead the financial institutions themselves that would determine the method of paring down?
As Dean Baker and several (mostly) alternative-media and hobbyist bloggers—including actual experts on Dodd-Frank and on financial-institution governance—have noted since the New York Daily News editorial board released a transcript last Tuesday of its interview with Bernie Sanders, it was not Sanders but instead members of that editorial board who were deeply confused about what Dodd-Frank actually provides. Specifically, about whether that law grant’s the federal government authority to determine that a financial institution is so large that its sheer size poses a systemic risk to this country’s economy.
And also specifically, about whether experts within the finance industry and the Treasury Dept., and economists, think the method of any such government-mandated paring down of a financial institution—absent enactment of the Glass-Steagall-like law—should be devised by Treasury of the Fed of instead by the financial institutions themselves.
And also about whether none other than Hillary Clinton, their candidate of choice, had said during this campaign something along the lines of:
We now have power under the Dodd-Frank legislation to break up banks. And I’ve said I will use that power if they pose a systemic risk.
Which, it has been pointed out since now since Wednesday when Clinton joined the chorus of those saying that Sanders in that interview had demonstrated a lack of basic knowledge, thoughtfulness and competence about this signature issue of his, Clinton herself at last February’s debate in fact said exactly:
We now have power under the Dodd-Frank legislation to break up banks. And I’ve said I will use that power if they pose a systemic risk.
Leading me to post this here at AB on Thursday. It’s titled:
Clinton admits she failed to do her homework, and therefore misunderstood, when she stated at the February debate that Dodd-Frank already authorizes the Treasury Dept. to force too-big-to-fail banks to pare down and that therefore no further legislation authorizing it is necessary. That’s quite an admission by her, and the New York Daily News editorial board (and the Washington Post’s Chris Cillizza) should take note.
Which drew some blowback in the Comments thread from a couple of fellow progressives, including their insistence that Clinton did not admit that she failed to do her homework before February’s debate and therefore misunderstood, like she now says Sanders does, what Dodd-Frank actually provides.
Which in turn drew blowback from me. Specifically:
Clinton’s statement that Sanders is incorrect that under Dodd-Frank the Treasury Dept. does have the authority to declare particular financial institutions so large that a failure of that institution would create significant danger to the economy or to the broader financial industry and therefore to the economy, and therefore would effectively require a federal bailout, is EXACTLY a reversal of what she said at that February debate when fending off Sanders’s suggestion that additional legislation is needed.
So she either was right at the February debate or she was right this week in her comments about Sanders’s interview with that editorial board, but the statements, two months apart, are mutually exclusive. Since the February one matched Sanders’s statements to the editorial board, her comment that Sanders was wrong and would know this had he done his homework sometime during the 11 months since he began his campaign, she did indeed say by necessary implication that she was mistaken in that statement at the February debate, and that had she done her homework she would have known that.
Clinton is not making the issue of NOT proposing further legislation on too-big-to-fail, but in resisting proposals for further legislation, she sure has made her claim that there is no need for it because Dodd-Frank already takes care of the problem a part of her defense against Sanders’s candidacy.
Further, since apparently there is nothing in Dodd-Frank that authorizes, much less requires, the Treasury Dept. to actually take over the financial institution and break it up, or to dictate how exactly it would be broken up, but does apparently give Treasury the authority to determine that a bank must pare down to a specified size—Clinton was right in February, and Sanders was right in his interview with that editorial board, according to Stephen F. Diamond, an actual expert on Dodd-Frank who both teaches the subject at Santa Clara Law School and advises on it in private practice—the claim by most of the news media and also by Clinton that Sanders’s statement that this is so is exactly what those folks are claiming Sanders’s statement was: wrong as a matter of fact, and indicative of a failure to do homework on the subject. Or, in Paul Krugman’s case in his op-ed piece yesterday, a deliberate misstatement. (I assume that Krugman is sufficiently familiar with Dodd-Frank to know that, although—who knows? – maybe not.)
Diamond had a lengthy post on his own blog on Thursday titled “Don’t blame Bernie – of course the banks can be broken up”, (Dan here…link corrected) which I learned of because Naked Capital posted its title and link immediately about its post of the title of and link for this post of mine. I clicked the pingback link, saw my post listed, and saw Diamond’s immediately above mine.
The first four paragraphs read:
“In a recent interview, a very confused New York Daily News reporter continually mixed up the Treasury Department and the Federal Reserve in the face of a very straightforward statement of presidential candidate Bernie Sanders that Congress can give the President power to impose changes on the structure of the financial system “under Dodd Frank.”
“Well, the Treasury is an agency of the executive branch while the Federal Reserve is an independent hybrid public-private entity. The former is an extension of the power of the President while the latter has autonomy that limits, understandably, Presidential influence. Apparently in the minds of financial journalists the two entities can be conflated without consequence.
“Sure enough Secretary Clinton jumped on the bandwagon and slyly and indirectly suggested on Morning Joe that Bernie Sanders does not “seem” to know enough about how the economy works to be qualified as president.
“Now that we have cleared up the fact that it was the Daily News reporter who was confused not Sanders, let’s focus on the agency that a President does control, the Treasury. When Sanders said he wanted to use Dodd-Frank to break up the big banks one could consider that from two angles. First, does the current language of that law enable the federal government to break up the banks; and second, could Dodd-Frank be amended to give the federal government the power it needs to break up the banks. Since Sanders talked about going to Congress to empower the government to break up the banks it seems reasonable to conclude he means the latter, second method. But he is taking the view that any such amendment would be consistent with Dodd-Frank, a necessary extension consistent with the spirit of what Congress intended to do.”
Clinton did her usual thing: Someone fed her a line and she parroted it. I hope that at the debate on Thursday Sanders hangs this one around her neck. and tightens the noose until she gets that she needs to stop that tactic–even if she needs methadone to help her break the habit.
And, in response to a response:
Clinton said at the Feb. debate: ““We now have power under the Dodd-Frank legislation to break up banks. And I’ve said I will use that power if they pose a systemic risk.” What can that possibly mean other than that she thought then—or was saying that she thought then, even if she did not think then—that the federal government now has power under the Dodd-Frank legislation to break up banks. And since she said “And I’ve said I will use that power if they pose a systemic risk,” this presumably was not the first time she said that.
So she said, then and presumably earlier, that she will use that power if they pose a systemic risk. How so? What exactly did she have in mind then? And how exactly did she plan to exercise that power? Did she plan then to have the Treasury Dept. dictate how each bank must pare down? Or did she plan, as Sanders told that editorial board he would, to allow each bank to determine it, maybe with the assistance and recommendations of the experts at Treasury?
This was not merely a flip-flop by her last week; this was a statement by her that Sanders did not know what he was talking about on an issue critical to his campaign. She’s now retracted her own earlier statements—the one during the Feb. debate and the earlier ones she was referring to in that comment at the Feb. debate—and doing so by parroting journalists who clearly have no idea what Dodd-Frank actually contains and what the actual experts suggest would be the best way to have these banks pare down (a method the banks choose or instead a method that Treasury chooses). Did she herself not know what she was talking about when she made those earlier statements? And what exactly are her plans? And if she now believes that Dodd-Frank does not confer that power, does she think further legislation should do so—as Sanders has proposed?
Some of the journalists and political commentators who jumped on this bandwagon—Paul Krugman and the Washington Post editorial board, for example—do know that it was not Sanders but the New York Daily News editorial board who was clueless. Yet they chose to misrepresent—outright misrepresent—that Sanders was wrong about Dodd-Frank, the role of the Treasury Dept., and the role of the Fed, as well as the actual mechanism that would be used in paring down these financial institutions: it would be the institutions, not the Treasury or the Fed., that would structure it.
Some excellent political journalists, such as Annie Karni, who covers the Sanders campaign for Politico even late last week in reporting on Sanders referenced the NYDN editorial board interview with a comment that Sanders seemed to lack specifics about this signature issue of his (or some such). But she and the others were just picking up what the political-opinion journalists were saying. The editorial and op-ed folks who know the specifics of this issue quite well abuse their positions when they misstate the facts of actual legislation (e.g., Dodd-Frank) or expert policy consensus (e.g., who should determine how to restructure). And before they again accuse Sanders of dishonesty (as Krugman does in that op-ed), they should look in the mirror. And at their chosen candidate.
As for Clinton herself, her bandwagon-jumping nature is a big reason why so many people dislike her. But in this instance there was the additional element of dishonesty: she knew that Sanders rather than the editorial board members had it right about what Dodd-Frank provides. She had said so publicly, recently, in a statement in which she also said she had said that before.
I added an addendum to my Thursday post, on a different matter—but it’s really part and parcel of the same one: The New York Times fact check blog had fact checked a recent statement of Clinton’s in which she said she “couldn’t believe” it when she learned that Sanders was opposing the recent Paris climate-change agreement. Her intended implication of course was that Sanders thinks the agreement goes too far. Both the statement itself and the intended implication were false. Sanders supports the agreement as a first step and says much more is needed.
What’s the real story? What’s she leaving out? What intended inference is not true? What connection is she implying that is false? What word is she parsing or cutely redefining? Both Donald Trump and Ted Cruz are habitual, maybe pathological, liars, so hopefully it won’t matter that, in Clinton, the Democrats will be nominating someone who campaigns like a used-car-salesman cliché.
Beverly – You stated
“Her intended implication of course was …”
How, pray tell, do you know what her intended implication was?
You sound like the pot calling the kettle black.
“‘I couldn’t believe it when Senator Sanders opposed the Paris agreement — the best chance we have to actually reverse climate change and deal with the consequences,’ Mrs. Clinton said in an interview on ‘Capital Tonight,’ an upstate New York cable news show.”
Soooo, Longtooth, what’s the alternative interpretation of what she implied?
“As Dean Baker and several (mostly) alternative-media and hobbyist bloggers…”
It seems we have reached the point where, to find the truth, we have to read the alternative-media and hobbyist bloggers and reject mainstream media. Orwell was right; Chomsky is right. The only thing Orwell got wrong was that the State has no need to hunt down those alternative sources; they just drown them out, ridicule them, ignore them.
Bearing in mind the fact that all mainstream outlets for journalism are controlled by a handful of corporations whose business is media and entertainment today, the WaPo editorial board has its institutional role to play as junkyard dog. Yesterday they barked that Mossack Fonseca was actually winding down their work for corporate and elite tax dodgers: In the face of the exposure of the most blatant corruption, when the Prime Ministers of Ukraine and Iceland have resigned and the Prime Ministers of Malta and the UK are under attack, they took it upon themselves to defend the Panama Trade Deal – on behalf of HRC. Joe Conason picked it up and reminded us that now we have a trade surplus with the mighty economic engine of Panama.
The result is the creation of “mass” opinion; it is the “manufacture of consent” for the wise men to continue deciding what is best for the rest of us, which in reality means what is best for the Corporate State. The WaPo actually said that some policies are widely popular, but that does not mean they are wise. So much for democracy. Hurray for Plutocracy.
This molehill morphing into a mountain thing is getting really old. It was a long interview, with many different subjects.
Here is one question and response
Daily News: Okay. You saw, I guess, what happened with Metropolitan Life. There was an attempt to bring them under the financial regulatory scheme, and the court said no. And what does that presage for your program?
Sanders: It’s something I have not studied, honestly, the legal implications of that.”
Now, what does that indicate? Something about homework needing to be done?
Daily News: Okay. But do you have a sense that there is a particular statute or statutes that a prosecutor could have or should have invoked to bring indictments?
Sanders: I suspect that there are. Yes.
Daily News: You believe that? But do you know?
Sanders: I believe that that is the case. Do I have them in front of me, now, legal statutes? No, I don’t. But if I would…yeah, that’s what I believe, yes. When a company pays a $5 billion fine for doing something that’s illegal, yeah, I think we can bring charges against the executives.”
Doesn’t that seem like he needs to do some homework? How come he does not know what statute?
The “mountain” in this story are the “experts” who had no idea that Sanders was absolutely correct about the powers in Dodd-Frank to control the size of the big banks.
Clinton’s “homework” response to the interview is a molehill(and even correct regarding these two areas).
Let’s move on from this. Ohh, here is the link to the transcript:
Wowww, EMichael. The MetLife issue arose LESS THAN TWO WEEKS AGO, in an unexpected decision by a single federal judge. Here’s the NYT story about it, from Mar. 31: http://www.nytimes.com/2016/03/31/business/metlife-wins-battle-to-remove-too-big-to-fail-label.html
Here’s an NYT editorial about it, from Apr. 4 (exactly a week ago): http://www.nytimes.com/2016/04/04/opinion/metlife-and-the-threat-to-dodd-frank.html?_r=0.
Here’s Paul Krugman’s column about it, TODAY, titled “Snoopy the Destroyer: http://www.nytimes.com/2016/04/11/opinion/snoopy-the-destroyer.html?ref=opinion
Here’s what Krugman says:
“Which brings us to Snoopy, who has, for reasons I don’t fully understand, long been the emblem of the insurance giant MetLife.
“At the end of 2014 the regulators designated MetLife, whose business extends far beyond individual life insurance, a systemically important financial institution. Other firms faced with this designation have tried to get out by changing their business models. For example, General Electric, which had become more about finance than about manufacturing, has sold off much of its finance business. But MetLife went to court. And it has won a favorable ruling from Rosemary Collyer, a Federal District Court judge.
“It was a peculiar ruling. Judge Collyer repeatedly complained that the regulators had failed to do a cost¬benefit analysis, which the law doesn’t say they should do, and for good reason. Financial crises are, after all, rare but drastic events; it’s unreasonable to expect regulators to game out in advance just how likely the next crisis is, or how it might play out, before imposing prudential standards. To demand that officials quantify the unquantifiable would, in effect, establish a strong presumption against any kind of protective measures.
“Of course, that’s what financial firms want. Conservatives like to pretend that the “systemically important” designation is actually a privilege, a guarantee that firms will be bailed out. Back in 2012 Mitt Romney described this part of reform as “a kiss that’s been given to New York banks” (they never miss an opportunity to sneer at this city, do they?), an “enormous boon for them.” Strange to say, however, firms are doing all they can to dodge this “boon” — and MetLife’s stock rose sharply when the ruling came down.
“The federal government will appeal the MetLife ruling, but even if it wins the ruling may open the floodgates to a wave of challenges to financial reform. And that’s the sense in which Snoopy may be setting us up for future disaster.
“It doesn’t have to happen. As with so much else, this year’s election is crucial. A Democrat in the White House would enforce the spirit as well as the letter of reform — and would also appoint judges sympathetic to that endeavor. A Republican, any Republican, would make every effort to undermine reform, even if he didn’t manage an explicit repeal.
“Just to be clear, I’m not saying that the 2010 financial reform was enough. The next crisis might come even if it remains intact. But the odds of crisis will be a lot higher if it falls apart.”
Seriously, EMichael? I mean … seriously??? Sanders is incompetent because he hadn’t yet read the court opinion and discussed it with legal experts?
As for the criticism that Sanders didn’t know the citations to the relevant federal fraud statutes, I’ll just repeat what I posted this morning in response to your comment in another post thread:
The editorial board members included a demand that Sanders provide the citation to the fraud statute under which the people financial industry folks that Sanders says should have been prosecuted could have been prosecuted. Actually, there are a few. Here are some links that identify some, but it’s probably not an inclusive list:
Sanders responded by pointing out that fraud is a federal crime, but one of the interrogators kept insisting that unless Sanders could cite the statute he didn’t know what he was talking about. As someone else—I think it was Ryan Grim pointed out, most people don’t know the citation to the murder statute in their state but they know that murder is a felony. But since Sanders doesn’t carry around in his mind a list of the statute citations, he’s not qualified to be president, according to the Washington Post political folks.
This idea that candidates must never respond to a question with an “I’m not familiar enough with the situation to discuss it in detail,” or some such, is this generic nonsense by assembly line political journalists and pundits. It’s patently ridiculous.
I just want to also point out that the editorial board transcript was released on Apr. 5 and that the interview occurred, I think, the day before–exactly five days after the opinion was issued and four days after the news broke about it.
I mean … like … wow.
Bernie’s real fault appears to be telling the truth, rather than practicing the political art of bullshitting instead of honestly saying “I don’t know” (unlike the majority of pols, Bernie is not a lawyer, nor takes any pride in bullshitting), or the art of “staying on message,” which is seen as an asset, a la Walker, Cruz and the entire cast of professional phonies.
The NYDN published another fascinating interview in the last couple of days, this time with FDR. The headline?
“NY Daily News Claims FDR Unfit to Be President: “No Concrete Plans, Only Platitudes”
Sorry, but I do not agree.
Sanders has been dealing with regulating Wall Street for years and years. The idea that “honestly saying “I don’t know”” is an asset in this area is kind of silly.
I understand the timing of the MET thing, but you really think he should be unable to answer that question to some degree? And it seems to me if you spend almost a decade talking about prosecuting the bankers, you should have a list of statutes(like you provided) at hand.
I certainly do not expect him to rattle off legal precedents and statutes by heart, but I expect him to have a basis of knowledge greater than he displayed. And, “When a company pays a $5 billion fine for doing something that’s illegal, yeah, I think we can bring charges against the executives.” is not a good enough answer.
“The recent kerfluffle about Bernie Sanders purportedly not knowing how to bust up the big banks says far more about the threat Sanders poses to the Democratic establishment and its Wall Street wing than it does about the candidate himself.
Of course Sanders knows how to bust up the big banks. He’s already introduced legislation to do just that. And even without new legislation a president has the power under the Dodd-Frank reform act to initiate such a breakup.
But Sanders threatens the Democratic establishment and Wall Street, not least because he’s intent on doing exactly what he says he’ll do: breaking up the biggest banks.
The biggest are far larger today than they were in 2008 when they were deemed “too big to fail.” Then, the five largest held around 30 percent of all U.S. banking assets. Today they have 44 percent.
According to a recent analysis by Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corporation, the assets of just four giant banks – JPMorgan Chase, Citibank, Bank of America, and Wells Fargo – amount to 97 percent of our the nation’s entire gross domestic product in 2012.
Which means they’re now way too big to fail. The danger to the economy isn’t just their indebtedness. It’s their dominance over the entire financial and economic system.
Recall that just eight years ago the biggest banks were up to their ears in fraudulent practices – lending money to mortgage originators to make risky home loans laced with false claims, buying back those loans and repackaging them for investors without revealing their risks, and then participating in a wave of fraudulent foreclosures.
Dodd-Frank addressed these sorts of abuses in broad strokes but left the most important decisions to regulatory agencies.
Since then, platoons of Wall Street lobbyists, lawyers and litigators have been watering down and delaying those regulations.
For example, Dodd-Frank instructed the Commodity Futures Trading Commission to reduce certain risks, but the Street has sabotaged the process.
In its first major rule under Dodd-Frank, the CFTC considered 1,500 comments, largely generated by and from the Street. After several years the commission issued a proposed rule, including some of the loopholes and exceptions the Street sought.
Wall Street still wasn’t satisfied. So the CFTC agreed to delay enforcement of the rule, allowing the Street more time to voice its objections. Even this wasn’t enough for the big banks, whose lawyers then filed a lawsuit in the federal courts, arguing that the commission’s cost-benefit analysis wasn’t adequate.
As of now, only 155 of the 398 regulations required by Dodd-Frank have been finalized. And those final versions are shot through with loopholes big enough for Wall Street’s top brass to drive their Ferrari’s through.
The biggest banks still haven’t even come up with acceptable “living wills,” required under Dodd-Frank to show how they’d maintain important functions while going through bankruptcy.
Meanwhile they continue to gamble with depositor’s money. Many of their operations are global, making it even harder for U.S. regulators to rein them in – as evidenced by JPMorgan Chase’s $6.2 billion loss in its “London Whale” operation in 2012. Citigroup alone has over 2,000 foreign subsidies.
The bottom line: Regulation won’t end the Street’s abuses. The Street has too much firepower. And because it continues to be a major source of campaign funding, no set of regulations will be tough enough.” Robert Reich
Come on EMichael, the damned Justice Dept. under Obama can’t figure out how to prosecute thieves who steal in the tens of millions of dollars. Sanders doesn’t have to provide a detailed outline, especially in an interview with the NYDN editorial board which is only barely more responsible than the NY Post. Mort Zuckerman is the owner. Not exactly a bastion of honest and forthright journalism.
The man has said, for almost a decade, that he will prosecute the big banksters. You don’t think he should have a plan as to how to do that?
He has a plan to bring single payer into being. He has an economic plan to stimulate the economy. But on prosecuting the banksters he should not have to bring a plan?
As I said, I certainly do not expect him to cite an entire statute or precedents, but he needs to show more knowledge in what, quite frankly, is the largest part of his platform.
What, pray tell, makes you think that his failure to recite the citation for the RICO statute, the securities fraud statute, and the mail and wire fraud (includes use of the internet) statutes means that he doesn’t have plan to prosecute mortgage and securities fraud? Are you saying–as you seem to be–that he might nominate as SEC chief, and as AG, people who aren’t familiar with the RICO statute, the securities fraud statute, and the mail and wire fraud statutes? This because he didn’t rattle off the statute citations? That’s crazy.
You say you don’t expect him to cite entire statutes of precedents, but the fact that he said these people should have been prosecuted for financial fraud wasn’t sufficient indicates that that is exactly what you’re claiming–especially since that’s what the editorial board and the political pundits were saying.
He needs to show more knowledge? If so, then so does Krugman, who in today’s column effectively retracted his comment in his Friday column that Sanders doesn’t know much about Dodd-Frank. Read the last couple of paragraphs in today’s column. He says exactly what Sanders said: Dodd-Frank looks like it gave the federal government the authority to require paring down of certain financial institutions, but the courts may say otherwise, so additional legislation would be helpful. He also says the court opinion is clearly wrong in saying that under Dodd-Frank a cost-benefit analysis is a prerequisite to a determination that a financial institution is too big to fail.
Yet you think Bernie Sanders should have a different understanding of Dodd-Frank than Krugman and that, since he doesn’t, there’s something wrog with him as a candidate?
Okay, well … to each his own.
“The result is the creation of “mass” opinion; it is the “manufacture of consent” for the wise men to continue deciding what is best for the rest of us, which in reality means what is best for the Corporate State. The WaPo actually said that some policies are widely popular, but that does not mean they are wise. So much for democracy. Hurray for Plutocracy.” Ms57
True enough, but lets file that under “nothing new under the sun” and we never learn from the past.
Circa 1790, “When, then, will the people be educated? When they have enough bread to eat, and when the rich and the government cease bribing treacherous pens and tongues to deceive them; when their interests are identified with those of the people. When will this be? Never.” M. Robespierre
So maybe it’s time for some form of revolution, hopefully at the ballot box. It will take more than a Bernie Sanders as President. It will take an awakening of the working class voters that their economic self interests do not lie with the current members of the Congress. It will require that Republican voter recognize that when they vote for Senate representation they are all casting votes for Mitch McConnell regardless of the state from which they vote. The same is true of the House. Vote Republican and you’re voting for Paul Ryan, or worse. There is little representation of working class and middle class economic interests in the Congress and that’s where things have to change. The Presidency is only a start. And H.C. isn’t that good a start. She’s old school and personal wealth oriented, as she and Bill have made quite clear over the past two decades.
“As I said, I certainly do not expect him to cite an entire statute or precedents, but he needs to show more knowledge in what, quite frankly, is the largest part of his platform.” EMichael
That statement suggests that you don’t fully understand the Sanders platform. No, not the largest part. An important step to bringing the rule of law to our economic system, but more important than a Sanders plan is the appointment of a hard charging Atty. General and a house cleaning at the S.E.C.
Sanders’ attack on Wall Street is the largest part of his platform. His appointments of an AG and at the SEC are a part of that attack on Wall Street.
That last was a response to Jack’s comment about my knowledge of the Sanders platform.
What I think is wrong with Sanders campaign is that it is amateurish. Still my favorite candidate(and it is not close). But I see no benefit to these kinds of stories.
Are you telling me that in all the years Sanders has been going on(Way, way before the campaign) about prosecuting the bankers who committed fraud he has not had one conversation with a prosecutor who could have given him some advice on which statutes could be used? You know them, why not him? He doesn’t have to cite them, he could basically have said:
” I don’t have them in front of me, but my advisors have told me that it could be done with “r with the RICO statute, the securities fraud statute, and the mail and wire fraud statutes”.
That’s a competent answer.
Same way with the Met thing.
” Read the last couple of paragraphs in today’s column. He says exactly what Sanders said: Dodd-Frank looks like it gave the federal government the authority to require paring down of certain financial institutions, but the courts may say otherwise, so additional legislation would be helpful. He also says the court opinion is clearly wrong in saying that under Dodd-Frank a cost-benefit analysis is a prerequisite to a determination that a financial institution is too big to fail.”
The problem is that Sanders did not say that in the interview that Clinton commented on. He simply said: “It’s something I have not studied, honestly, the legal implications of that.”
Two softball questions that he struggled with badly. He wasn’t prepared in either case.
Which PK column from Friday said Sanders did not know much about Dodd Frank?
“It’s something I have not studied, honestly, the legal implications of that.” The question he was answering REFERRED TO the conclusions that the judge drew about the reach and prerequisites of the Dodd-Frank too-big-to-fail provision.
As for Krugman’s column from Friday he has a two- or three-sentence paragraph parroting supporting Clinton’s parroting of the media-frenzy conclusion that Sanders lacked sufficient knowledge about Dodd-Frank’s too-big-to-fail mechanism–the criticism being that Dodd-Frank has no such provision and that therefore Sanders was wrong. The column was called “Sanders Over the Edge”, and dealt mostly with Sanders’ reaction to Clinton’s ridiculous statement that he didn’t do his homework and therefore didn’t know that Clinton was wrong in Feb. when she said that Dodd-Frank authorizes the Treasury Dept. to order systemically dangerously large financial institutions to pare down.
As I posted in a separate post today, Krugman’s column today effectively retracts his comment in his Friday column supporting Clinton’s comments about Sanders’ alleged lack of knowledge about Dodd-Frank, and without using Sanders’ name adopted Sanders’ position in light of that MetLife opinion.
“What I think is wrong with Sanders campaign is that it is amateurish. Still my favorite candidate(and it is not close). But I see no benefit to these kinds of stories.” EMichael
You have a strange way of supporting your “favorite candidate”. And there is certainly no benefit in the people who purport to support Sanders nit picking his campaign rhetoric. Try to remember that campaign rhetoric is meant to outline, not detail, what a candidate stands for. You’re being just short of ridiculous if you think that your comments would in any way help draw others to support Sanders. Pseudo-intellectual progressives can’t help from shooting their own favorites between the eyes, if only to show how politically erudite they can be.
Beverly – I’m certainly glad your posts are opinion pieces since you use singular self -supporting intuitions of the facts .. .your intuitions no better, imo, than those used by the far right wing of the wing-nuts.
As I read PK’s blog post today (and I read it regularly) I got no such message of anything remotely related to or implied as a “retraction” of his former post. This is your pure highly imaginative fantasies in play.
If you read PK’s blogs much you’ll find that when he retracts something he does so explicitly.
I’m referring to his regular column published in the paper on Monday and Friday. He doesn’t mention Sanders. He just says the opposite of what he said on this issue in his Friday column.
Sorry Beverly, but my point still stands and your response has zero logic in which you respond to my in which I questioned your means of knowing (“of course” Hillary’s implication.
To Wit: “…in which she [Hillary] said she “couldn’t believe” it when she learned that Sanders was opposing the recent Paris climate-change agreement.”
Then you opine that “Her intended implications of course was that Sanders thinks the agreement goes to far. Both the statement itself [Hillary’s presumably] and the intended implication [which is your purely imagnined intended implication of what Hillary stated] were false.”
So in that post you claim Hillary’s stateemnt that she “couldn’t believe” Sanders was opposing the Paris climate-change agreement, AND your imagined implication of Hillary’s “couldn’t believe” are both false.
Interestingly you have somehow decided that a statement of disblief and your own made-up implication of that statement by Hillary are both false. On what basis can you make this stuff up and still claim any semblance of objectivity? Or perhaps that’s what I’m missing — which would be my fault — that you have intent to be at least a little objective.
Then you responded to my question of how you can possibly now Hillary’s “intended implication” with her full statement from a news show in an upstate New York in which she continued “the best chance we have to actually reverse climate change and deal with the consequences” which refers to the Paris Agreeemnt.. being the “best chance”.
a) Hillary couldn’t believe Sanders opposed the Paris Agreement.
b) Hillary said the best chance of actually reversing climate change and dealing with the consequences was the Paris Agreement.
Then adds up to your implication (your conclusion) that
c) Hillary implied that Sanders thinks the Paris Agreement “goes too far”.
I fail utterly to make any logical or rational (or even reasonble) connection between a) + b) = c) as your logic dictates.
Perhaps you can elaborate on how a) + b) = c) above. I’d love to read another of your illogical conjectures… they’re beginning to be more entertaining that Bill Mahr.
Jack, referring to your Apr 11, 11:14 a.m. post —
I agree wholeheartedly but would submit that it’s our constitution that needs to change in fact. That document was debated, written, and ratified in relative haste (related to forming a “more perfect union” to thwart the threat of European power’s renewed take-over attempts.
It’s vagaries of terms and compromises between the federalists and anti-federalists were the then (and still present) means of forging minimal agreement to form a semblance of government to maintain a union at all. Moreover, the Constitution was forged by and for the maintenance of the elite land-owning class for a “gentlemans government” run and elected by the wealthy land owning class (of north and south).
It’s the terms and conditions imposed by this ancient document that needs to be changed to change anything else. The presidency bounces back and forth between control by the federalists and anti-federalists, as does the Senate and House, as does the Judiciary’s interpretations of this old document.
It is not my job to garner support for Bernie Sanders. That takes one into BernieBro territory. I cannot imagine why anyone thinks that anything written in this vein has an effect on anyone’s vote.
People are going to look at the respective platforms(and their reality); experience; and past performances and make their decision. Amazes me that people think this is some sort of high school football game where the students’ job is to yell “Yeah, team!”.
“People are going to look at the respective platforms(and their reality); ..yada, yada…..” EMichael
This is an incredibly ignorant, naive or optimistic statement. I don’t know which, but one of those three categories for sure. What electorate are you describing, outside of your own small circle of friends? What country are we living in? Look at who the front runners in the Republican primaries are. Look at who is running the Congress. Which of those people have been chosen by the voters that you describe?
This is America. Voters focus on their social fears and their own bigotries. Economic self interest appears to be independent of personal political ideology. Wake up and smell the coffee my friend. Campaigns are mostly popularity contests and for those candidates who are more serious about their proposals, less is more when it comes to campaign rhetoric. The information has to be processed by a less than astute voter base. Yes, some small percentage of voters do the necessary analysis of what is offered by each candidate, but even then the realization of such voters is that the more said in detail, the less likely to become a reality after the votes fall where they may.
“I’m gonna build a wall” is a platform as much as “Medicare for all” is a platform.
In context of the discussion on this blog, I would hope that “Campaigns are mostly popularity contests” is not true.
Finally, I have been attacked on this blog for criticizing Sanders for being too specific on his healthcare and economic proposals, and now I am being attacked for criticizing Sanders for not being specific enough on bank regulation and prosecution of criminals.
“That’s some catch, that Catch-22,” he observed.
“It’s the best there is,” Doc Daneeka agreed.
Here is yet one more informative synopsis of the role of Krugman.
I think the best Bev can do is say Krugman should have retracted his opinion piece (or some parts of it), but that he didn’t. That would be an honestly held opinion and perhaps even worthy of support.
But a retraction with merit must have a sound basis otherwise a retraction is just pandering to other’s opinions to seek, remain, or become more popular…. joining in a popularity contest.
I’ve stated before and state again that I love the stuff Bernie says should be done and that he would do if he were president. I really love what he says should be done, but I don’t believe him for a second (or a New York minute) when he says it can be done or that he can make these things happen. He’s pandering to my liberal hopes and dreams which I’ve long since understood to be something my grandchildren’s children might one day get a little more o.
Butt to think, rationally and objectively that these will occur, or that any will occur, in a 4 year or 8 year term of a single presidency, and especially in the current and near-term outlook in the level of division within this nation’s electorate, I can’t accept Bernie’s statements as anything more that pie in the sky wishful thinking.
From where I sit then, anybody telling me they can accomplish pie in the sky, even the kind of pie I’d love to have set before me, is a charlatan and a snake-oil salesman… with no more integrity than Bush II’s “compassionate conservative” b.s. or Trump’s or Cruz’s or Ryan’s “magic asterisks.” which they say “will make our country great again” or whatever other emotionally charged rhetoric is used.
Liberals and progressives (as I am — even probably more-so than Bernie) who believe Bernie’s rhetoric are no different than the conservative nut-cases that believe Trump, or Cruz or Ryan’s equally emotionally charged rhetoric.
In that sense then Bev’s just another progressive supporting pie-in-the-sky emotional appeals. Please, somebody out there get real.
Apparently the Fed and the FDIC believe — along with Bernie — that the banks can be broken up. The banks were required a while ago to present a plan to break them up in a financial crisis through the “living will” process. Five of the largest submitted their plans to those bodies — and were rejected today. The snake oil salesmen are not the FDIC or the Fed or Elizabeth Warren or Bernie Sanders, but the banks themselves, which will do anything to avoid being broken up. A request is obviously insufficient; they need to be mandated to do so, and the sooner the better. If they can do it in a crisis, with a time period shortened to a matter of weeks or months, they can certainly do so in a perfectly orderly way over the course of a few years.
An article by Asher Edelman was published today arguing why they need to be broken up and saying that Bernie is the only one who can or will do it:
“Banking is the least understood, and possibly most lethal, of all the myriad issues at stake in this election. No candidate other than Bernie Sanders is capable of taking the steps necessary to protect the American people from a repeat of the recent debacle that plunged the nation into a recession from which we have not recovered.
The potential for a depression looms heavily on the horizon. As a trained economist who has spent more than 20 years on Wall Street – and one of the models for Gordon Gekko’s character – I know the financial system is in urgent need of regulation and responsibility. Yet Hillary Clinton is beholden to the banks for their largesse in funding her campaign and lining her pockets. The likelihood of any Republican candidate taking on this key issue is not even worthy of discussion.
The recession of 2007-2016, and the persistent transfer of wealth from the 80% to the 1% is, mostly the result of banking irresponsibility precipitated by the repeal of the Glass-Steagall Act in 1999. The law separated commercial banking (responsible for gathering and conservatively lending out funds) from investment banking (more speculative activities).
A new culture emerged that rewarded bankers for return on equity rather than sound lending practices. The wild west of risk-taking, staked on depositors’ money, became the best sport in town. Why not? If management won, they got rich. When they lost, the taxpayer took on the responsibility. If that sounds like a good wager, it was (and is).
The only problem is what happens when the music ends. Debt-to-capital ratios for investment banking functions rose from 12:1 to 30:1. Options on derivatives on other derivatives increased that leverage many fold. Self-regulation became the rule and, lo and behold, in 2008: crash. America and the world were nailed by a fastball from which the bottom 80% of the American population has yet to recover.
Remarkably, today the derivatives positions held by the large banks approach 10 times those of 2007-2008. In four banks alone, they exceed the GDP of the entire world. This is the interesting consequence when unchecked risk management rests in bankers’ hands.”
Yeah, I read about the FDIC’s rejection of those banks’ plans, and thought: What? Whoa. Wait. The big banks can’t be broken up because no one knows how it can be done. So why bother with this living-will thing for the ones that are too big to fail? Too-big-to-fail banks don’t die and they don’t fade away. No matter what.
I do not understand the confusion or cynicism about how to break up the banks. The banks themselves are required by law to submit plans on how they’ll do it in the next crisis – and a next time is virtually certain. The plans go to the Fed and the FDIC for approval. If the banks created the complexities of their financial relations; if they manage those relations on a daily basis to maximize revenue/profit, they certainly understand how to unwind them in a crisis. They are the ones who know how; they are required by law to explain how they’ll do it. The one most basic requirement – the one lacking – is the same thing that keeps us all from disobeying the law: the power of coercion by the State through enforcement of the law. They must be forced to do it. (And we’ve got to elect or appoint the folks who will do it – the Bernie Sanders, the Elizabeth Warrens, the Robert Reichs, the economists and bankers who both understand it must be done and will force the banks to do it.)
“The International Monetary Fund has highlighted risks of a new financial crisis, warning that global output could be cut by 4% over the next five years by a repeat of the market mayhem witnessed during the 2008-09 recession.”
The IMF used its half-yearly global financial stability report to call for urgent action on the problems of banks in the eurozone, a third of which it said faced “significant challenges” to be sustainably profitable.
“In the euro area, market pressures also highlighted long-standing legacy issues, indicating that a more complete solution to European banks’ problems cannot be further postponed,” the IMF said. It said there needed to be a comprehensive strategy to deal with €900bn (£715bn) of non-performing loans (NPLs) on the books of eurozone banks, adding that banks also needed to be closed in order to deal with excess capacity.”
“Liberals and progressives (as I am — even probably more-so than Bernie) who believe Bernie’s rhetoric are no different than the conservative nut-cases that believe Trump, or Cruz or Ryan’s equally emotionally charged rhetoric.” Longtooth
Granted that both may contain elements of pie in the sky rhetoric, but in the case of conservatives who support Trump et al, there is the additional element of believing in one’s own worst enemies. Whether it be Cruz, Ryan or McConnell what is being offered is self destructive to the conservative working class. They’re focused on social issues and their own fears of unknown others. Conservatives and tea baggers in particular seem willing to agree to their own continued economic decline so long as their social fears and prejudices are ameliorated.
Sanders supporters have at least a rational choice before them. Pie in the sky? Not if enough voters come out and clean out the Congress. That may not happen, but it is at least in the interests of working and middle class voters to believe in and support Bernie’s socially responsible economic ideology. No, it ain’t socialism, but it is responsible.