Sanders campaign, analysts
counter media frenzy lambasting Daily News interview
Following suggestions
that he somehow "bungled"
when asked about how he would, if elected president, break up Wall Street's
largest and most dangerous institutions, the Bernie Sanders campaign on Tuesday
offered a detailed explanation of how he would end "too-big-to-fail
banks."
Sparking corporate media's
"great
feeding frenzy" was an interview the presidential candidate had April
1 with the New York Daily News editorial board, the transcript
of which was published online Monday.
The Washington Post described
it as "pretty close to a disaster," while Jeremy Stahl wrote
at Slate that Sanders "appeared to struggle" on the details of how to
break up the big banks.
Hillary Clinton also seized
on the interview, sending the transcript to supporters in a fundraising email
that stated: "even on his signature issue of breaking up the banks, he's
unable to answer basic questions about how he'd go about doing it." She
also told MSNBC's Morning Joe on Wednesday, "The core of his campaign has
been breaking up the banks, and it didn’t seem in reading his answers that he
would understand exactly how that would work under Dodd-Frank."
But as New York Times finance
and business reporter Peter Eavis argued,
"taken as a whole, Mr. Sanders's answers seem to make sense. Crucially,
his answers mostly track with a reasonably straightforward breakup plan that he
introduced to Congress last year."
Sanders told the Daily News,
"How you go about [breaking up the dangerously large institutions] is
having legislation passed, or giving the authority to the secretary of treasury
to determine, under Dodd-Frank, that these banks are a danger to the economy
over the problem of too-big-to-fail," later adding that it'd be the banks'
decision "how they want to reconfigure themselves."
"You would determine is
that, if a bank is too big to fail, it is too big to exist. And then you have
the secretary of treasury and some people who know a lot about this, making
that determination. If the determination is that Goldman Sachs or JPMorgan
Chase is too big to fail, yes, they will be broken up," he said.
His campaign on Tuesday
released a statement
on how a Sanders administration would take on the issue, also stating that he
and rival Clinton "have very different points of view on how to reform
Wall Street and the largest financial institutions in this country." The
statement reads, in part:
Within the first 100 days of
his administration, Sen. Sanders will require the secretary of the Treasury
Department to establish a “Too-Big-to Fail” list of commercial banks, shadow
banks and insurance companies whose failure would pose a catastrophic risk to
the United States economy without a taxpayer bailout.
Within a year, the Sanders
administration will work with the Federal Reserve and financial regulators to
break these institutions up using the authority of Section 121 of the
Dodd-Frank Act.
Sen. Sanders will also fight
to enact a 21st Century Glass-Steagall Act to clearly separate commercial
banking, investment banking and insurance services. Secretary Clinton opposes
this extremely important measure.
President Franklin Roosevelt
signed the Glass-Steagall Act into law precisely to prevent Wall Street
speculators from causing another Great Depression. And, it worked for more than
five decades until Wall Street watered it down under President Reagan and
killed it under President Clinton. That is unacceptable and that is why Sen.
Sanders will fight to sign the Warren-McCain bill into law.
Like the Times' Eavis, other
analysts questioned the dominant media narrative that has emerged since the
interview.
The Huffington Post's Ryan
Grim charged
that, as the interview went on, "it began to appear that the Daily News
editors didn't understand the difference between the Treasury Department and
the Federal Reserve."
Grim wrote, "Sanders has
also taken a beating for saying he couldn't cite a particular statute that may
have been violated by Wall Street bankers during the financial crisis. But,
quickly, without searching Google, can you name the particular statute that
outlaws murder?"
Economist and Center for
Economic and Policy Research co-founder Dean Baker takes issue with that
criticism as well, writing
in a blog post Thursday:
Knowingly passing off fraudulent
mortgages in a mortgage backed security is fraud. Could the Justice Department
prove this case against high level bank executives? Who knows, but they
obviously didn't try.
And the fact that Sanders
didn't know the specific statute, who cares? How many people know the specific
statute for someone who puts a bullet in someone's head? That's murder, and if
a candidate for office doesn't know the exact title and specific's of her state
murder statute, it hardly seems like a big issue.
Baker also wrote:
I certainly would have liked
to see more specificity in Sanders' answers, but I'm an economist. And some of
the complaints are just silly.
When asked how he would break
up the big banks Sanders said he would leave that up to the banks. That's
exactly the right answer. The government doesn't know the most efficient way to
break up JP Morgan, JP Morgan does. If the point is to downsize the banks, the
way to do it is to give them a size cap and let them figure out the best way to
reconfigure themselves to get under it.
Baker goes on to contrast the
media's treatment of Sanders with that of House Speaker Paul Ryan, touted as a
"serious budget wonk [but who] has repeatedly proposed eliminating most of
the federal government."
"So there you have
it," Baker wrote. "The D.C. press corps that goes nuts because Bernie
Sanders doesn't know the name of the statute under which he would prosecute
bank fraud thinks a guy who calls for eliminating most of the federal
government is a great budget wonk."
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