Hillary-Kaine: Back to the
Center
Hillary Clinton’s VP choice,
Tim Kaine, is well liked Inside the Beltway, partly because he bends to
pressure from Wall Street, DLC-style “centrists” and the austerity-pushing
mainstream media, explains ex-bank regulator William K. Black.
By William K. Black
By picking Sen. Tim Kaine,
Hillary Clinton has revealed her true preferences and shown that her move to
the left on policy issues during the primaries was simply a tactical move to
defeat Bernie Sanders. It’s not what you say, it’s what you do. Clinton can
talk about caring about the U.S. public, but this choice cuts through the
rhetoric.
The two politicians to whom
she gave serious consideration to choosing as her running mates were Kaine and
Secretary of Agriculture Tom Vilsack. What both men share in common is, like
the Clintons, being leaders of the Democratic Leadership Council (DLC). The DLC
was, on economic and foreign policy issues, a servile creature of Wall Street –
funded by Wall Street.
As Tom Frank’s new book Listen,
Liberal documents, the DLC vilified the New Deal, financial and safety
regulation, organized labor, the working class, opponents of militarism,
opponents of the disastrous trade deals that were actually backdoor assaults on
effective health, safety and financial regulation, and the progressive base of
the Democratic Party.
The DLC leadership, which
included President Bill Clinton and Vice President Al Gore, entered into a
series of cynical bipartisan deals with the worst elements of the Republican
Party, Federal Reserve Chairman Alan Greenspan and Wall Street elites that:
–Destroyed Glass-Steagall (the
New Deal reform that separated commercial and investment banks)
–Created a massive regulatory
“black hole” in financial derivatives that Enron and later the world’s largest
banks exploited to run their fraud schemes that led to the Enron-era scandals
and the Great Recession
–Drove Brooksley Born from
government because she warned about these derivatives and sought to protect us
from the coming disaster
–Cut the Federal Deposit
Insurance Corporation’s (FDIC) staff by over three-quarters, destroying
effective supervision of banks
–Cut the Office of Thrift
Supervision’s (OTS) staff by over half, destroying effective supervision of
savings and loans such as Countrywide, Washington Mutual (known as WaMu, the
largest “bank” failure in U.S. history), and IndyMac. OTS was also supposed to
regulate aspects of AIG and Lehman, but had no capacity to do so given the massive
staff cuts and its deliberately useless regulatory leaders chosen by Bill
Clinton and George W. Bush
Where Was Kaine?
Kaine, like Hillary Clinton,
has embraced for decades the DLC/’New Democrats’ agenda – meaning they are
allies of Wall Street. They embrace a neo-liberal, pro-corporate outlook that
has done incredible damage to the vast majority of Americans.
Kaine is actively pushing to
weaken already grossly inadequate financial regulation and pushing to adopt the
indefensible “Trans-Pacific Partnership” (TPP).
By choosing Kaine, Hillary
Clinton is signaling that her new-found support for financial regulation and
opposition to TPP is a tactical ploy to win the nomination before she “pivots”
back to the disastrous policies that she, Kaine and Vilsack have helped inflict
on the world for decades. She is playing into Trump’s claims that she is not
honest.
What’s especially noteworthy
is that Hillary Clinton and Kaine are carrying Wall Street’s water while the
Republican Party is repudiating some of these policies. The Republican Party
platform (cynically) calls for reinstating Glass-Steagall, and Donald Trump has
called for the defeat of TPP in an equally cynical fashion.
The self-described liberals –
the Clintons, Kaine and New York Times columnist Paul Krugman – are against
reinstating Glass-Steagall. This shows Hillary Clinton hasn’t learned a
thing from the failed pro-Wall Street policies that have wrecked the
economy. It’s bad politics and it’s bad policy.
Actually, that’s not quite
right. These policies have worked brilliantly for the top 1/1000th of one
percent. The policies have been disastrous for nearly everyone else in the U.S.
– and around the world. As Sen. Elizabeth Warren says, “the financial
system is rigged.”
As an attorney, professor of
economics, serial whistleblower, former financial regulator and white-collar
criminologist, I can explain exactly how the DLC and their Republican allies,
both of which were traditionally funded by and servants of Wall Street, rigged
the system.
You can be sure that people
like me who have demonstrated their ability and willingness to destroy the
rigged system in order to regulate and prosecute financial elites and their
political cronies will never be appointed by a Clinton/Kaine administration.
The Love of
Austerity
And that’s just on the
finance. On the economics, the choice of Kaine signals that Hillary Clinton is
openly returning to her life-long embrace of the economic malpractice of
austerity. Recall that Bill Clinton tried, in league with Newt Gingrich, to
largely privatize Social Security. That is Wall Street’s greatest dream.
The only reason it didn’t
happen is that the Republican rebels asked for too much and that scuttled the
deal that Bill Clinton was making with the Republican-controlled Congress. The
same thing happened when the Tea Party sank President Barack Obama’s efforts to
reach a “Grand Bargain” with the Republicans to adopt austerity and make cuts
to the safety net.
The leadership of the now
defunct DLC continues to applaud the cuts they made to Social Security and the
oxymoron they called “welfare reform” that has brought so much misery to poor
mothers. The preposterous lie that, working with President Ronald Reagan, they
“saved Social Security” is repeated daily on the intro to an MSNBC program.
Even though it would be good
politics as well as policy for Hillary Clinton to break with the Wall Street
wing of the Democratic Party and choose a VP from the Democratic-wing of the
Party, she refuses to even pretend that she gave serious consideration to
choosing a progressive as her running point.
Democrats should take a lesson
from economics and focus on this clear case of “revealed preferences.” She is
telling us that she intends to ensure that should she be elected and unable to
complete her term of office she can be confident that her successor will
continue the DLC’s disastrous agenda.
William K. Black is an
associate professor of economics and law at the University of Missouri-Kansas
City. A former bank regulator who led investigations of the savings and loan
crisis of the 1980s, he is the author of the book The Best Way to Rob a Bank Is
to Own One. Follow him on https://twitter.com/williamkblack
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