Matt Taibbi: Hillary Clinton Must Think We’re Ignorant About How Awful the Big Banks Are

Oct 15, 2015 by

News & Politics

It’s the bankers who are pulling the strings.


Former US Secretary of State Hillary Clinton at a campaign rally for Maryland gubernatorial candidate Anthony Gregory Brown and running mate for Lt. Governor Ken Ulman on October 30, 2014 in College Park, Maryland

Matt Taibbi at Rolling Stone writes that Hillary is “counting on America’s ignorance about the 2008 crash”.

At the Democratic Debate, Anderson Cooper asked a question about how to curb the excesses of Wall St. Here is what Hillary said.

“Well, my plan is more comprehensive. And, frankly, it’s tougher because of course we have to deal with the problem that the banks are still too big to fail. We can never let the American taxpayer and middle-class families ever have to bail out the kind of speculative behavior that we saw. But we also have to worry about some of the other players: AIG, a big insurance company; Lehman Brothers, an investment bank. There’s this whole area called ‘shadow banking.’ That’s where the experts tell me the next potential problem could come from.”

Here Hillary tries to get the banks off the hook and make you look at that shiny object out in the distance. It’s clear she has no intention of reinstating Glass-Steagall or of trying to curb the financial sector’s abuses.

Hillary, like her close advisor Barney Frank, has been pushing an idea that banks aren’t at the root of any financial instability problem. Last night, she pointed a finger instead at “shadow banking,” non-bank actors like AIG, and a dead investment bank in Lehman Brothers. (Interesting she didn’t mention a still-viable investment bank like Goldman, Sachs, which has hosted her expensive speaking engagements.)

This squeamishness about criticizing banks is laughable to people in the industry. But of course, that’s probably the point – that the average voter won’t know how absurd and desperate it is to point to faceless “shadow” financiers as villains when the real bad guys are famed mega-firms that are right out in the open, with their names plastered all over every second city block.

Of course, Barney Frank after being a part of regulating banks in congress, now is working for the banks, making tons of money and daring congress to do anything about it.

The root of the 2008 crisis lay in a broad criminal fraud scheme, in which huge masses of home loans were given to people who couldn’t afford them. Those loans in turn were bought back up by giant banks and resold to investors who weren’t told how crappy the merchandise was. AIG blew up because it insured this fraudulent market. Lehman blew up because it overinvested in it. But it was banks that financed the problem and that were possibly the most depraved actors in the narrative (apart, perhaps, from the Countrywide-style mortgage lenders who were handing loans out to anyone with a pulse).

We know this, among other things, because it was big banks like JPMorgan Chase and Citigroup that paid the biggest chunks of the $100 billion in fines Hillary later referenced in the debate. There is a vast record of documentary and witness evidence now attesting to the mass fraud, which was of a type that can and probably will happen again. The policy issue is how to curb the impact of that inevitable next crooked scheme.

Bankers bankroll Hillary’s campaign, so while it may seem that she’s trying to gain employment representing the American people, it’s the bankers who are pulling the strings.

Read Taibbi’s entire piece. As usual, he breaks things down so that anyone can understand how Hillary’s solution to Wall St. abuse leaves the US (and the world) vulnerable to another major economic disaster.

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