Wall Street’s Trump euphoria propels Dow above 20,000

inauguralspeechtrump

By Barry Grey
26 January 2017

On Wednesday, Wall Street celebrated the installation of an administration staffed by CEOs and pledged to remove all obstacles to corporate profit-making by pushing the Dow Jones Industrial Average above the 20,000 level for the first time in history. US stock indexes have been soaring since the November 8 election of Donald Trump, with the Dow rising 9 percent in just 11 weeks.

The blue chip index gained 155 points to close at 20,068 on Wednesday. The Standard & Poor’s 500 and Nasdaq indexes also recorded strong gains and ended the day in record territory.

Trump hailed the record-breaking close with a tweet: “Great!#Dow20K.” His senior economic adviser, the former hedge fund boss Anthony Scaramucci, congratulated Trump for the market surge, tweeting, “Stock market performance in 6 weeks following President Trump’s victory is best among all elections since 1900#ThankYouTrump.”

The record close came one day after Trump issued orders aimed at removing all obstacles to the completion of the Keystone and Dakota Access pipelines, demonstrating his contempt for environmental concerns and the sentiments of Native American tribes and their supporters, who have been protesting for months against the Dakota project’s threat to the Standing Rock Reservation’s water supply and traditional lands.

This boon to the energy and materials corporations and their Wall Street backers coincided with meetings between Trump and corporate CEOS on Monday and Tuesday at which the billionaire real estate mogul-turned president reiterated his pledge to gut health and safety and environmental regulations and slash corporate taxes.

In remarks just prior to meeting Tuesday with the CEOs of the US-based auto companies, Trump promised to shift the business climate “from truly inhospitable to extremely hospitable.” He called current business regulations “out of control.” Administration officials broadly hinted that Trump would meet one of the auto bosses’ key demands by rolling back fuel efficiency standards. On Monday, Trump told a meeting of a dozen CEOs that his advisers thought “we can cut regulations 75 percent, maybe more.”

Other actions Trump has taken in the five days since his inauguration include a freeze on all pending regulations and a hiring freeze for all federal agencies.

While there have been certain improvements in the economic situation in the US and internationally in recent months, including signs of stronger growth in Europe and an upsurge in fourth quarter US corporate profits, these changes do not explain the extraordinarily rapid rise in the American markets.

The surge began the day after Trump’s November 8 election victory, as the markets, initially shaken by the unexpected defeat of their favored candidate, Democrat Hillary Clinton, turned sharply upward, buoyed by Trump’s promises of massive tax cuts for corporations and the rich, the wholesale lifting of business regulations, a massive expansion of military spending, and the prospect of a full-scale attack on social programs.

As Trump began to name one billionaire or multi-millionaire after another to his cabinet, along with ex-generals and far-right opponents of public education, Medicare and Social Security, housing assistance, environmental protections, the minimum wage and occupational health and safety, the upward spiral on Wall Street accelerated. It is barely two months since the Dow first hit 19,000.

The rise stalled for several weeks while the financial elite waited to see if Trump really intended to carry out the social counterrevolution to which he had alluded during the campaign. The markets soared once again after Trump’s installation and initial pro-corporate moves.

Trump is the embodiment of the American financial aristocracy, in all its brutish and violent backwardness and criminality. What the markets are celebrating is a government that in an unprecedented manner openly functions as the instrument of this oligarchy.

On Wednesday, the Wall Street Journal if anything understated the greed-driven euphoria in corporate and financial circles in an article headlined “CEOs Savor New Washington Status.”

“For CEOs,” the Journal wrote, “the moves have sent a message that their stock is rising in Washington, with some betting that they will have a bigger say in running the country…

“Along with [former Exxon Mobil CEO Rex] Tillerson at State, billionaire investor Wilbur Ross [Commerce], former Windquest Group chairwoman Betsy DeVos [Education], Andy Puzder, chief executive of CKE Restaurant Holdings [Labor] and former World Wrestling Entertainment CEO Linda McMahon [Small Business Administration] have been tapped to play big roles in his administration.”

The Journal could have added, among others, longtime Goldman Sachs lawyer Jay Clayton the head the main Wall Street regulation, the Securities and Exchange Commission.

The presence of three former Goldman Sachs executives in top positions in the Trump administration, in addition to Clayton, helps explain the frenzied runup in the share prices of major banks. Goldman Sachs and JPMorgan Chase together account for some 20 percent of the rise in the Dow since November 22.

Trump’s plan to “make America great again” is a drive to wipe out every social gain won by the working class in the course of more than a century of struggle and return to a supposed “golden age” when the corporations could plunder and pollute the country to their heart’s content.

The fraud of Trump’s “concern” for the American worker is exposed by the reality of the forces that are actually benefitting from his policies.

One of the Goldman alumni chosen by Trump for top posts in his administration is Gary Cohn, the bank’s former president and chief operating officer. In return for his leaving the bank and assuming the post of director of Trump’s National Economic Council, Goldman is handing Cohn more than $285 million in bonuses, stock holdings and other investments, according to Bloomberg News.

The Wall Street Journal, in an article published Tuesday titled “Bankers Cash In on Post-Election Stock Rally,” reported that executives of major Wall Street banks have sold almost $100 million worth of stock since the election, more than in that same period in any year for the past decade.

In addition to the share sales, bank officials have sold another $350 million worth of stock to cover the cost of exercising stock options.

Morgan Stanley CEO James Gorman, according to the newspaper, sold 200,000 Morgan Stanley shares three days after the election, and has since sold another 385,000 shares, altogether realizing a profit of at least $8.4 million.

Six Goldman Sachs executives, as well as board member and ex-finance chief David Vinar, exercised 983,000 options, representing $200 million worth of shares.

The advent of Trump has already boosted the fortunes of Wall Street bankers by millions of dollars, and this is only a small preview of the colossal plundering of the American and world economy that is to come.

All the more politically criminal are the efforts of the Democrats, including supposed “left” figures such as Bernie Sanders and Elizabeth Warren, to lend credibility to Trump’s claims to be fighting for American workers by backing the new president’s xenophobic “America First” policies of economic nationalism and trade war.

WSWS

Chinese Billionaire Says US Wasted Trillions on Wars and Wall Street

Published on
by

Alibaba founder Jack Ma said the U.S. should stop blaming other countries for stealing jobs and, instead, invest in ‘your own people’

"In the past 30 years, America had 13 wars spending $2 trillion," said Alibaba founder Jack Ma. "What if the money was spent on the Midwest of the United States?"(Photo via CNBC)

“In the past 30 years, America had 13 wars spending $2 trillion,” said Alibaba founder Jack Ma. “What if the money was spent on the Midwest of the United States?” (Photo via CNBC)

Speaking at the World Economic Forum in Switzerland on Wednesday, Chinese billionaire Jack Ma accused the United States of spending too much money on foreign wars and risky financial speculation and not enough money “on your own people.”

The founder of the world’s largest retailer, Alibaba, was addressing a question posed by CNBC‘s Andrew Ross Sorkin about the U.S. economy in relation to China.

In response, Ma said the U.S. should stop blaming other countries and look at its own spending priorities:

“It’s not that other countries steal jobs from you guys,” Ma said. “It’s your strategy. You did not distribute the money and things in a proper way.”

“It’s not that other countries steal jobs from you guys. It’s your strategy. You did not distribute the money and things in a proper way.”He said the U.S. has wasted over $14 trillion in fighting wars over the past 30 years rather than investing in infrastructure at home.

Ma said that when Thomas Friedman published the 2005 pro-globalization tribute The World is Flat, taking advantage of the world economy seemed like “a perfect strategy” for the U.S.

“We just want the technology, and the IP, and the brand, and we’ll leave the other jobs” to other countries like Mexico and China, he said, according to Business Insider. “American international companies made millions and millions of dollars from globalization.”

“The past 30 years, IBM, Cisco, Microsoft, they’ve made tens of millions—the profits they’ve made are much more than the four Chinese banks put together,” he continued. “But where did the money go?”

“The money goes to Wall Street. Then what happened? Year 2008 wiped out $19.2 trillion in U.S. income,” he said. What’s more, he added, “In the past 30 years, America had 13 wars spending $14.2 trillion…no matter how good your strategy is you’re supposed to spend money on your own people.”

“What if the money was spent on the Midwest of the United States?” he asked. “What if they had spent part of that money on building up their infrastructure, helping white-collar and blue-collar workers? You’re supposed to spend money on your own people.”

While he did emphasize that globalization is a good thing, according to CNBC, Ma reportedly noted that it “‘should be inclusive,’ with the spoils not just going to the wealthy few.”

Ma’s critique came weeks after he attended a meeting in New York City with President-elect Donald Trump, who has threatened to impose punitive tariffs against the Asian superpower.

When asked about that conversation, the internet tycoon “said the consequences of a trade war between the world’s biggest and second-largest economies would be too grave for both countries to bear and they should do everything to avoid it,” reported the South China Morning Post, which Ma owns.

“It’s so easy to launch a war. It’s so difficult, almost impossible sometimes, to terminate that war,” he said. “The Iraq war, the Afghanistan war, are those finished?”

Sanders’ Social Democracy vs. Trump’s Authoritarian Doctrine

What Trump’s semi-success at the Carrier plant means for the future.

adult experienced industrial worker during heavy industry machinery assembling on production line manufacturing workshop
Photo Credit: Dmitry Kalinovsky

President-elect Trump scored a remarkable victory by saving 1,000 of the 2,100 jobs that Carrier and its parent company, United Technologies, were outsourcing to Mexico. During the campaign, Trump pledged to stop those jobs from leaving the country and he has come through (much credit should be given to the United Steelworkers for keeping this issue alive).

Trump used the plight of those workers, represented by the United Steelworkers, as a battering ram to pummel Hillary Clinton on trade and the loss of decent paying U.S. manufacturing jobs. Now, his partial success could lead to a mass exodus of working people from Democratic party.

The Myth of the White Working Class

Post-election pundits are propagating the false equation that “industrial workers” equals “white working class,” and that Clinton’s crushing defeat in the Rust Belt was the result of a white worker revolt against political correctness — i.e., they’re racists!

But America’s industrial workforce reflects the future, not the past. The 1,400-person Carrier workforce in Indianapolis, for example, is 50 percent African American. Women make up half of the workers on its assembly lines, and 10 percent of the employees are Burmese immigrants.

This means Donald Trump, bigot in chief, has just saved the decent-paying, unionized jobs of women, African Americans, immigrants and white workers. Look out Democrats.

Benign Neglect at the Democratic Party

Trump’s effort to save these jobs contrasts starkly with the failure of the established Democratic Party to do anything at all about such devastating plant closures. President Obama has never used his bully pulpit to mention even one of the thousands of facilities that shifted abroad under his watch. Similarly, Hillary Clinton remained silent about Carrier during her entire campaign, thereby allowing Trump to morph into the champion of the working class.

But none of that is particularly surprising given how deeply Wall Street/corporate elites are embedded within the Democratic Party. More troubling still is that party elites believe these relocations are economically justifiable.

Neoliberal ideology (the holiness of tax cuts, privatization, deregulation, and the free movement of capital) has become the conventional wisdom of the entire political establishment of both parties. The media in particular echoes the inaccurate notion that these facilities must move so that the parent company can keep up with competition. (Carrier, in fact, is leaving in order to secure more funds for stock-buybacks to enrich hedge funds and top corporate officers.) All of this capital mobility is pictured as result of globalization—a force akin to an act of God.

Virtually every article on Carrier opines that Trump’s quick fix cannot alter the technological march that surely will displace these blue collar workers. What they are really saying is the corporations have the right and obligation to move wherever and whenever they wish in order to boost profits and “shareholder value.” Mainstream economists then assure us that, overall, society is better off due lower-cost imported goods and higher value-added domestic jobs, even if a few workers are sacrificed along the way.

But a “few workers” have turned into millions of family members and members of devastated communities who have seen their lives deteriorate. They are heading Trump’s way.

Sanders to the Rescue?

Bernie Sanders saw all this coming. That’s why he challenged Clinton in the first place, and that’s why he’s now trying to capture the Democratic Party and turn it into the champion of working people against Wall Street and “the billionaire class.”

In the case of Carrier, Sanders is calling on Trump not to accept a compromise that will still allow half of the jobs to be moved to Mexico. Staying true to his radical politics, Sanders also is calling for new “Outsourcing Prevention Act” that would:

  1. Bar companies from receiving future contracts, tax breaks, grants or loans from the federal government if they have announced plans to outsource more than 50 jobs to other countries;

  2. Require all companies to pay back all federal tax breaks, grants and loans they have received from the federal government over the last decade if they outsource more than 50 jobs in a given year;

  3. Impose a tax on all companies that outsource jobs. The tax would be equal to the amount of savings achieved by outsourcing jobs or 35 percent of its profits, whichever is higher.

  4. Prohibit companies that offshore jobs from enriching executives through golden parachutes, stock options, bonuses, or other forms of compensation by imposing stiff tax penalties on this compensation.

Reactionary versus Progressive Populism

The stage is set for an epic struggle between Trump’s right wing populism and Sanders-style social democracy. The corporate-driven Democrats may soon be irrelevant. Either they go along with Sanders and compete for the allegiance with working people, or they get pummeled by more working class defections to Trump’s brand of populism.

Sanders believes that neoliberalism is heart of our problem — that it leads to runaway inequality, a rigged political system, an exploitative Wall Street, and the full-scale assault on the living and working conditions of working people — black, brown, white, gay and straight. That system, he believes, also leads to the dramatic rise of incarceration, urban and rural poverty, and the stalling of real wages for the vast majority of the population.

Sanders understands we only can win significant social democratic reforms if we link together the full set of victims (most of the 99%). He’s talking about the kind of programs that will appreciably improve our lives — free higher education, single-payer health care, a major attack on climate change, massive public job creation, real criminal justice and immigration reform, a Wall Street speculation tax and now the Outsourcing Prevention Act.

Getting it Right

It’s too late to take the Carrier victory away form Trump. It won’t work to belittle Trump by claiming it only covers 1,000 jobs, or that too many public tax breaks were tossed to the corporation, or that globalization will eventually make those jobs go away. One thousand jobs means 1,000 families who will not see their incomes slashed in half, or worse. More importantly it means hope, that maybe outsourcing to low-wage countries can be ameliorated.

As a result, Sanders is making a difficult request both of the Democratic Party, and of progressive activists in general. He is asking us to place working people at the center of our work: “The working class of this country is being decimated — that’s why Donald Trump won,” Sanders said. “And what we need now are candidates who stand with those working people, who understand that real median family income has gone down.”

To get there, Sanders is fanning a contentious debate: He argues that the current practice of identity politics is not a complete political program. As he bluntly stated, “It is not good enough for somebody to say, ‘I’m a woman, vote for me.’ That is not good enough. What we need is a woman who has the guts to stand up to Wall Street, to the insurance companies, to the drug companies, to the fossil fuel industries.”

So what does this mean for the efforts of tens of thousands of progressive activists who are deeply engaged in halting climate change, preventing police violence, securing equal rights the LGBTQ community, protecting immigrants, and working on a myriad of other significant causes?

Sanders implies that for any of us to succeed, we all must join the fight to enhance the lives of working people. No matter what our priority issue, we will need to devote time and resources to fight for universal programs that lift us all up. In short, we have to expand our issue silos so that fighting Wall Street and the billionaire class can link us together.Sanders could not be clearer: Either we become a broad-based class movement or we lose. The choice is ours, not Trump’s.

 

Les Leopold is the executive director of the Labor Institute in New York, and author of How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America’s Wealth (J. Wiley and Sons, 2013).

 

 

http://www.alternet.org/election-2016/carrier-plant-jobs?akid=14975.265072.Got96S&rd=1&src=newsletter1068440&t=4

As election tightens, Clinton steps up right-wing appeals

maxresdefault

By Patrick Martin
3 November 2016

Five days before Election Day, with the US presidential race significantly tightening, Democratic candidate Hillary Clinton has stepped up her appeals for support from the military-intelligence apparatus. In a series of campaign appearances, she blasted Republican Donald Trump as unfit to be commander-in-chief, while Democratic Party operatives continued to push the manufactured claim that Trump is the candidate of Russian President Vladimir Putin.

Virtually all national polls now show the Clinton-Trump race so close that the gap is within the margin of error or just outside it, with Clinton holding a small lead. She has a somewhat larger lead in the Electoral College, the mechanism that determines the actual victor.

Most projections suggest that four of the 10 most populous states—Florida, Pennsylvania, Ohio and North Carolina—will likely determine the outcome in the Electoral College. Trump needs to sweep all four to win because of Clinton’s edge in the Northeast, the Pacific Coast and the upper Midwest. Trump leads in most of the South and the thinly populated states of the Great Plains and Mountain West.

Both campaigns have narrowed their efforts to the handful of most contested states. The Clinton campaign has focused on getting out the vote in African-American and Hispanic neighborhoods and on college campuses, concerned by indications that early voting numbers are lower than in 2012, when Barack Obama won a narrow reelection victory.

A report in Wednesday’s New York Times highlighted these fears without explaining the reason for popular disaffection among previous Democratic Party voters: namely, widespread disappointment with the eight years of the Obama administration and the consistently right-wing character of the Clinton campaign.

Clinton has made little effort to appeal to the millions who voted for Bernie Sanders, her main challenger for the Democratic nomination. While Sanders attracted support, particularly from young people, with his claim to be a “democratic socialist” and his condemnation of the dominant role played by “the billionaire class,” Clinton is an open defender of Wall Street, who told a rally last week, “I love having the support of real billionaires.”

The right-wing orientation of Clinton and the Democrats has found its most noxious expression in the anti-Russian, anti-Putin campaign. After FBI Director James Comey sent a letter to Congress last Friday announcing new “investigative steps” against Clinton over her use of a private email server while secretary of state, the Clinton campaign initially noted that the letter was an extraordinary violation of longstanding Justice Department policy, which barred such actions within 60 days of an election in order to avoid prejudicing public opinion against a candidate.

But the focus of its response soon shifted to denouncing Comey for not making similar disclosures of inquiries directed against the Trump campaign in relation to the business activities of several of Trump’s advisers, including former campaign chairman Paul Manafort, in Russia, Ukraine and other territories of the former Soviet Union. Clinton campaign chairman Robbie Mook attacked what he called a “double standard.”

Congressional Democrats have escalated these attacks, with Senate Minority Leader Harry Reid claiming that there are serious national security dangers involved in the alleged Trump-Russia connection. Pro-Clinton media have chimed in with a barrage of reports, including one claiming that there was a secret Internet communication channel between the headquarters of the Trump organization and Moscow-based Alfa Bank.

Perhaps the most strident comment was an op-ed column in the Washington Post penned by Eric Chenoweth, co-director of the Institute for Democracy in Eastern Europe. Chenoweth is a longtime anti-communist operative who previously worked for the Albert Shanker Institute and the international affairs departments of the American Federation of Teachers and the AFL-CIO.

In his column, Chenoweth denounced WikiLeaks’ publication of emails from Clinton campaign chairman John Podesta, claiming that the US media was being turned into an instrument of “Russian intelligence services.”

The writer declared: “What we are being introduced to—and what the free media is not defending itself against—is the confabulation of state propaganda and intelligence organs of the Russian government… What is terrifying is that it has become abundantly clear that US media could not protect itself from a directed manipulation through use of fabricated documents right before the election.”

The purpose of the anti-Russia campaign is not only to manipulate public opinion, but above all to curry favor with the military-intelligence apparatus by suggesting that Trump is either unstable and unserious in his attitude to Russia or disloyal to the interests of American imperialism.

Clinton took up this theme in a speech reiterating her longstanding claim that she is far more qualified to be commander-in-chief because of her record as a hawkish secretary of state and advocate for the US military.

At the same time, Clinton has continued to paint Trump as a serial sexual assaulter and misogynist. This is part of her emphasis on issues of race, gender and sexual orientation, which are the obsessive preoccupations of the privileged upper-middle class layers that constitute the main popular base of the Democratic Party.

President Obama took up the Comey letter for the first time in an interview Wednesday in which he criticized the decision to notify Congress and the public on the eve of the election. “I do think that there is a norm, that when there are investigations, we don’t operate on innuendo, we don’t operate on incomplete information, we don’t operate on leaks,” he said.

There is a huge element of hypocrisy here, since the Democrats’ anti-Russia campaign consists entirely of unsupported allegations reinforced by the US intelligence agencies and promoted uncritically by the media.

The Republican Party and the Trump campaign have responded to the intervention of the FBI by escalating their threats to democratic rights, directed both against voters in minority neighborhoods, who may be targeted for political provocations on Election Day in an effort to suppress the Democratic vote, and in threats against Clinton herself, the constant target of demands to “lock her up” at Trump campaign rallies.

Several Republican officials have declared that impeachment proceedings against Clinton for alleged crimes bound up with her use of a private email server should be initiated immediately if she wins the election. Senator Ron Johnson of Wisconsin told a local newspaper, “I would say yes, high crime or misdemeanor. I believe she is in violation of both …” House Oversight Committee Chairman Jason Chaffetz said that hearings on the email server, the Benghazi affair, the Clinton Foundation and other issues would begin even before Clinton was inaugurated next January 20.

In an even more ominous note, a black church in Mississippi was burned and partially destroyed Tuesday night and defaced with pro-Trump graffiti. The fire destroyed much of the main sanctuary at Hopewell Missionary Baptist Church in Greenville, Mississippi. It came as a newspaper associated with the Ku Klux Klan, the Crusader, published an endorsement of Trump under the headline, “Make America Great Again.”

The very fact that despite such associations, Trump is still in a competitive race and has a serious chance of winning the presidency is an indictment of the right-wing, anti-working class character of the Democratic Party.

The 2016 election has boiled down to a contest between a billionaire demagogue who is encouraging fascistic and racist elements and a multi-millionaire reactionary who is the consensus choice of both Wall Street and the national-security establishment.

WSWS

In Hillary Clinton’s America, Wall Street Will Be in the Saddle

ELECTION 2016
The high probability of a Clinton win means the establishment remains intact.

Photo Credit: Trevor Collens / Shutterstock.com

As this endless election limps toward its last days, while spiraling into a bizarre duel over vote-rigging accusations, a deep sigh is undoubtedly in order. The entire process has been an emotionally draining, frustration-inducing, rage-inflaming spectacle of repellent form over shallow substance. For many, the third debate evoked fatigue. More worrying, there was again no discussion of how to prevent another financial crisis, an ominous possibility in the next presidency, whether Donald Trump or Hillary Clinton enters the Oval Office — given that nothing fundamental has been altered when it comes to Wall Street’s practices and predation.

At the heart of American political consciousness right now lies a soul-crushing reality for millions of distraught Americans: the choices for president couldn’t be feebler or more disappointing. On the one hand, we have a petulant, vocabulary-challenged man-boar of a billionaire, who hasn’t paid his taxes, has regularly left those supporting him holding the bag, and seems like a ludicrous composite of every bad trait in every bad date any woman has ever had. On the other hand, we’re offered a walking photo-op for and well-paid speechmaker to Wall-Street CEOs, a one-woman money-raising machine from the 1% of the 1%, who, despite a folksiness that couldn’t look more rehearsed, has methodically outplayed her opponent.

With less than two weeks to go before E-day — despite the Trumptilian upheaval of the last year — the high probability of a Clinton win means the establishment remains intact. When we awaken on November 9th, it will undoubtedly be dawn in Hillary Clinton’s America and that potentially means four years of an economic dystopia that will (as would Donald Trump’s version of the same) leave many Americans rightfully anxious about their economic futures.

None of the three presidential debates suggested that either candidate would have the ability (or desire) to confront Wall Street from the Oval Office. In the second and third debates, in case you missed them, Hillary didn’t even mention the Glass-Steagall Act, too big to fail, or Wall Street. While in the first debate, the subject of Wall Street only came up after she disparaged the tax policies of “Trumped-up, trickle down economics” (or, as I like to call it, the Trumpledown economics of giving tax and financial benefits to the rich and to corporations).

In this election, Hillary has crafted her talking points regarding the causes of the last financial crisis as weapons against Trump, but they hardly begin to tell the real story of what happened to the American economy. The meltdown of 2007-2008 was not mainly due to “tax policies that slashed taxes on the wealthy” or a “failure to invest in the middle class,” two subjects she has repeatedly highlighted to slam the Republicans and their candidate. It was a byproduct of the destruction of the regulations that opened the way for a too-big-to-fail framework to thrive. Under the presidency of Bill Clinton, Glass-Steagall, the Depression-era act that once separated people’s bank deposits and loans from any kind of risky bets or other similar actions in which banks might engage, was repealed under the Financial Modernization Act of 1999. In addition, the Commodity Futures Modernization Act was passed, which allowed Wall Street to concoct devastating unregulated side bets on what became the subprime crisis.

Given that the people involved with those choices are still around and some are still advising (or in the case of one former president living with) Hillary Clinton, it’s reasonable to imagine that, in January 2017, she’ll launch the third term of Bill Clinton when it comes to financial policy, banks, and the economy. Only now, the stakes are even higher, the banks larger, and their impunity still remarkably unchallenged.

Consider President Obama’s current treasury secretary, Jack Lew. It was Hillary who hit the Clinton Rolodex to bring him back to Washington. Lew first entered Bill Clinton’s White House in 1993 as special assistant to the president.  Between his stints working for Clinton and Obama, he made his way into the private sector and eventually to Wall Street — as so many of his predecessors had done and successors would do.  He scored a leadership role with Citigroup during the time that Bill Clinton’s former Treasury Secretary(and former Goldman Sachs co-Chairman) Robert Rubin was on its board of directors.  In 2009, Hillary selected him to be her deputy secretary of state.

Lew is hardly the only example of the busy revolving door to power that led from the Clinton administration to the Obama administration via Wall Street (or activities connected to it). Bill Clinton’s Treasury Under Secretary for International Affairs, Timothy Geithner worked with Robert Rubin, later championed Wall Street as president and CEO of the New York Federal Reserve while Hillary was senator from New York (representing Wall Street), and then became Obama’s first treasury secretary while Hillary was secretary of state.

One possible contender for treasury secretary in a new Clinton administration would be Bill Clinton’s Under Secretary of Domestic Finance and Obama’s Commodity Futures Trading Commission chairman, Gary Gensler (who was — I’m sure you won’t be shocked — a Goldman Sachs partner before entering public service). These, then, are typical inhabitants of the Clinton inner circle and of the political-financial corridors of power. Their thinking, like Hillary’s, meshes well with support for the status quo in the banking system, even if, like her, they are willing on occasion to admonish it for its “mistakes.”

This thru-line of personnel in and out of Clinton World is dangerous for most of the rest of us, because behind all the “talking heads” and genuinely amusing Saturday Night Live skits about this bizarre election lie certain crucial issues that will have to be dealt with: decisions about climate change, foreign wars, student-loan unaffordability, rising income inequalitydeclining social mobility, and, yes, the threat of another financial crisis. And keep in mind that such a future economic meltdown isn’t an absurdly long-shot possibility. Earlier this year, the Federal Reserve, the nation’s main bank regulator, and the Federal Deposit Insurance Corporation, the government entity that insures our bank deposits, collectively noted that seven of our biggest eight banks — Citigroup was the exception — still have inadequate emergency plans in the event of another financial crisis.

Exploring a Two-Faced World

Politicians regularly act one way publicly and another privately, as Hillary was “outed” for doing by WikiLeaks via its document dump from Clinton campaign manager John Podesta’s hacked email account. Such realities should be treated as neither shockers nor smoking guns. Everybody postures. Everybody lies. Everybody’s two-faced in certain aspects of their lives. Politicians just make a career out of it.

What’s problematic about Hillary’s public and private positions in the economic sphere, at least, isn’t their two-facedness but how of a piece they are. Yes, she warned the bankers to “cut it out! Quit foreclosing on homes! Quit engaging in these kinds of speculative behaviors!” — but that was no demonstration of strength in relation to the big banks. Her comments revealed no real understanding of their precise role in exacerbating a fixable subprime loan calamity and global financial crisis, nor did her finger-wagging mean anything to Wall Street.

Keep in mind that, during the build-up to that crisis, as banks took advantage of looser regulations, she collected more than $7 million from the securities and investment industry for her New York Senate runs ($18 million during her career). In her first Senate campaign,Citigroup was her top contributor.  The four Wall-Street-based banks (JPMorgan Chase, Citigroup, Goldman Sachs, and Morgan Stanley) all feature among her top 10 career contributors. As a senator, she didn’t introduce any bills aimed at reforming or regulating Wall Street. During the lead-up to the financial crisis of 2007-2008, she did introduce five (out of 140) bills relating to the housing crisis, but they all died before making it through a Senate committee. So did a bill she sponsored to curtail corporate executive compensation. Though she has publicly called for a reduction in hedge-fund tax breaks (known as “closing the carried interest loophole”), including at the second debate, she never signed on to the bill that would have done so (one that Obama co-sponsored in 2007). Perhaps her most important gesture of support for Wall Street was her vote in favor of the $700 billion 2008 bank bailout bill. (Bernie Sanders opposed it.)

After her secretary of state stint, she returned to the scene of banking crimes. Many times. As we know, she was also paid exceedingly well for it. Friendship with the Clintons doesn’t come cheap. As she said in October 2013, while speaking at a Goldman Sachs AIMS Alternative Investments’ Symposium, “running for office in our country takes a lot of money, and candidates have to go out and raise it. New York is probably the leading site for contributions for fundraising for candidates on both sides of the aisle.”

Between 2013 and 2015, she gave 12 speeches to Wall Street banks, private equity firms, and other financial corporations, reaping a whopping $2,935,000 for them. In her 2016 presidential run, the securities and investment sector (aka Wall Street) has contributed the most of any industry to PACs supporting Hillary: $56.4 million.

Yes, everybody needs to make a buck or a few million of them. This is America after all, but Hillary was a political figure paid by the same banks routinely getting slapped with criminal settlements by the Department of Justice. In addition, the Clinton Foundation counted as generous donors all four of the major Wall Street-based mega-banks. She was voracious when it came to such money and tone-deaf when it came to the irony of it all.

Glass-Steagall and Bernie Sanders

One of the more illuminating aspects of the Podesta emails was a series of communications that took place in the fall of 2015. That’s when Bernie Sanders was gaining traction for, among other things, his calls to break up the big banks and resurrect the Glass-Steagall Act of 1933.  The Clinton administration’s dismantling of that act in 1999 had freed the big banks to use their depositors’ money as collateral for risky bets in the real estate market and elsewhere, and so allowed them to become ever more engorged with questionable securities.

On December 7, 2015, with her campaign well underway and worried about the Sanders challenge, the Clinton camp debuted a key Hillary op-ed, “How I’d Rein in Wall Street,” in the New York Times. This followed two months of emails and internal debate within her campaign over whether supporting the return of Glass-Steagall was politically palatable for her and whether not supporting it would antagonize Senator Elizabeth Warren. In the end, though Glass-Steagall was mentioned in passing in her op-ed, she chose not to endorse its return.

She explained her decision not to do so this way (and her advisers and media apostles have stuck with this explanation ever since):

“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.”

Her entire characterization of how the 2007-2008 banking crisis unfolded was — well — wrong.  Here’s how traditional banks (like JPMorgan Chase) operated: they lent money to investment banks like Lehman Brothers so that they could buy more financial waste products stuffed with subprime mortgages that these traditional banks were, in turn, trying to sell. They then backed up those toxic financial products through insurance companies like AIG, which came close to collapse when what it was insuring became too toxically overwhelming to afford.  AIG then got a $182 billion government bailout that also had the effect of bailing out those traditional banks (including Goldman Sachs and Morgan Stanley, which became “traditional” during the crisis). In this way, the whole vicious cycle started with the traditional banks that hold your deposits and at the same time could produce and sell those waste products thanks to the repeal of Glass-Steagall. So yes, the loss of that act caused the crisis and, in its wake, every big traditional bank was fined for crisis-related crimes.

Hillary won’t push to bring back Glass-Steagall. Doing so would dismantle her husband’s legacy and that of the men he and she appointed to public office. Whatever cosmetic alterations may be in store, count on that act remaining an artifact of the past, since its resurrection would dismay the bankers who, over the past three decades, made the Clintons what they are.

No wonder many diehard Sanders supporters remain disillusioned and skeptical — not to speak of the fact that their candidate featured dead last (39th) on a list of recommended vice presidential candidates in the Podesta emails. That’s unfortunately how much his agenda is likely to matter to her in the Oval Office.

Go Regulate Yourselves!

Before he resigned with his nine-figure golden parachute, Wells Fargo CEO and Chairman John Stumpf addressed Congress over disclosures that 5,300 of his employees had created two million fake accounts, scamming $2.4 million from existing customers. The bank was fined $185 million for that (out of a total $10 billion in fines for a range of other crimes committed before and during the financial crisis).

In response, Hillary wrote a letter to Wells Fargo’s customers. In it, she didn’t actually mention Stumpf by name, as she has not mentioned any Wall Street CEO by name in the context of criminal activity. Instead, she simply spoke of “he.”  As she put it, “He owes all of you a clear explanation as to how this happened under his watch.” She added, “Executives should be held individually accountable when rampant illegal activity happens on their watch.”

She does have a plan to fine banks for being too big, but they’ve already been fined repeatedly for being crooked and it hasn’t made them any smaller or less threatening.  As their top officials evidently view the matter, paying up for breaking the law is just another cost of doing business.

Hillary also wrote, “If any bank can’t be managed effectively, it should be broken up.” But the question is: Why doesn’t ongoing criminal activity that threatens the rest of us correlate with ineffective management — or put another way, when was the last time you saw a major bank broken up? And don’t hold your breath for that to happen in a new Clinton administration either.

In her public letter, she added, “I’ll appoint regulators who will stand with taxpayers and consumers, not with big banks and their friends in Congress.”  On the other hand, at that same Goldman Sachs symposium, while in fundraising mode, she gave bankers a pass relative to regulators and commented: “Well, I represented all of you for eight years. I had great relations and worked so close together after 9/11 to rebuild downtown, and [I have] a lot of respect for the work you do and the people who do it.”

She has steadfastly worked to craft explanations for the financial crisis and the Great Recession that don’t endanger the banks as we presently know them. In addition, she has supported the idea of appointing insider regulators,insisting that “the people that know the industry better than anybody are the people who work in the industry.” (Let’s not forget that former Goldman Sachs CEO and Chairman Hank Paulson ran the Treasury Department while the crisis brewed.)

Among the emails sent to John Podesta that were posted by WikiLeaks is an article I wrote for TomDispatch on the Clintons’ relationships with bankers.  “She will not point fingers at her friends,” I said in that piece in May 2015. She will not chastise the people who pay her hundreds of thousands of dollars a pop to speak or the ones who have long shared the social circles in which she and her husband move.” I also suggested that she wouldn’t call out any CEO by name. To this day she hasn’t. I said that she would never be an advocate for Glass-Steagall. And she hasn’t been. What was true then will be no less true once she’s in the White House and no longer has to make gestures toward the platform on which Bernie ran and so can once again more openly embrace the bankers’ way of conducting business.

There’s a reason Wall Street has a crush on her and its monarchs like Goldman Sachs CEO and Chairman Lloyd Blankfein pay her such stunning sums to offer anodyne remarks to their employees and others. Blankfein has been coy about an official Clinton endorsement simply because he doesn’t want to rock her campaign boat, but make no mistake, this Wall Street kingpin’s silence is tantamount to an endorsement.

To date, $10 trillion worth of assets sits on the books of the Big Six banks. Since 2008, these same banks have copped to more than $150 billion in fines for pre-crisis behavior that ranged on the spectrum of criminality from manipulating multiple public markets to outright fraud. Hillary Clinton has arguably taken money that would not have been so available if it weren’t for the ill-gotten gains those banks secured. In her usual measured way, albeit with some light admonishments, she has told them what they want to hear: that if they behave — something that in her dictionary of definitions involves little in the way of personalized pain or punishment — so will she.

So let’s recap Hillary’s America, past, present, and future. It’s a land lacking in meaningful structural reform of the financial system, a place where the big banks have been, and will continue to be, coddled by the government. No CEO will be jailed, no matter how large the fines his bank is saddled with or how widespread the crimes it committed.  Instead, he’s likely to be invited to the inaugural ball in January. Because its practices have not been adequately controlled or curtailed, the inherent risk that Wall Street poses for Main Street will only grow as bankers continue to use our money to make their bets. (The 2010 Dodd-Frank Act was supposed to help on this score, but has yet to make the big banks any smaller.)

And here’s an obvious corollary to all this: the next bank-instigated economic catastrophe will not be dealt with until it has once again crushed the financial stability of millions of Americans.

The banks have voted with their dollars on all of this in multiple ways. Hillary won’t do anything to upset that applecart. We should have no illusions about what her presidency would mean from a Wall Street vs. Main Street perspective. Certainly, JPMorgan Chase CEO Jamie Dimon doesn’t. He effectively endorsed Hillary before a crowd of financial industry players, saying, “I hope the next president, she reaches across the aisle.”

For Wall Street, of course, that aisle is essentially illusory, since its players operate so easily and effectively on both sides of it. In Hillary’s America, Wall Street will still own Main Street.

 

Nomi Prins, a TomDispatch regular, is the author of six books, a speaker, and a distinguished senior fellow at the non-partisan public policy institute Demos. Her most recent book is All the Presidents’ Bankers: The Hidden Alliances That Drive American Power (Nation Books). She is a former Wall Street executive.

http://www.alternet.org/election-2016/hillary-clintons-america-wall-street-will-be-saddle?akid=14832.265072.gaUb6P&rd=1&src=newsletter1066252&t=8

Leaked documents detail how Wall Street bought the Clintons

hillary-clinton-banks-wall-street

By Patrick Martin
28 October 2016

Documents released by WikiLeaks Wednesday give the fullest picture so far of the way that Bill and Hillary Clinton built up their private fortune during the years after they left the White House in 2001. Hundreds of memos and emails detail how corporations and banks were recruited to funnel millions into the for-profit activities of the enterprise that a top aide, Douglas Band, called “Bill Clinton Inc.”

As detailed in a devastating 12-page memo written in November 2011, Band established a consulting firm called Teneo to recruit corporate CEOs and bankers to give large donations to the Clinton Foundation. At the same time, he would urge them to provide lucrative speaking fees for an address by the former president, usually in the six-figure range.

As the Washington Post described it in its front-page report Thursday, the Band memo “detailed a circle of enrichment in which he raised money for the Clinton Foundation from top-tier corporations such as Dow Chemical and Coca-Cola that were clients of his firm, Teneo, while pressing many of those same donors to provide personal income to the former president.”

Band wrote the detailed memorandum, supplying precise figures for the flow of funds into the pockets of Bill Clinton, as the result of a bitter internal feud inside the Clinton camp. Chelsea Clinton, who married hedge fund executive Marc Mezvinsky in 2010, after working on Wall Street, became a board member of the Clinton Foundation in 2011 and began to question Band’s activities.

According to the email exchanges made public over the past month, Chelsea Clinton accused Band and his business partner, Declan Kelly, of profiting personally from Band’s longstanding connection with her father—he was Clinton’s personal aide, who travelled with him everywhere, during the final years of his presidency.

Band drafted the memo to the law firm of Simpson Thacher, which had been called in to conduct an internal review of the Clinton Foundation’s operations, in an effort to refute the charge of profiteering. He even turned it back on the Clintons, pointing out that Bill Clinton had made far more money on his own account than Band or Teneo.

Band complained that he was required to sign a conflict of interest document for the Clinton Global Initiative, disavowing any personal profit from the charity’s activities, but “Oddly, WJC [William Jefferson Clinton, the ex-president] does not have to sign such a document even though he is personally paid by 3 cgi sponsors, gets many expensive gifts from them, some that are at home etc.”

More important than the large sums Band helped to raise for the Clinton Library and the Clinton Foundation were the companies he recruited to direct a portion of their funding to Bill Clinton personally.

The CEO of UBS Wealth Management, Bob McCann, was a longtime client of Declan Kelly, Band’s partner. According to the Band memo, Kelly “introduced Mr. McCann to President Clinton at an American Ireland Fund event in 2009. Mr. Kelly subsequently asked Mr. McCann to support the Foundation, which he did via the Clinton Economic Opportunity Initiative. Mr. Kelly also encouraged Mr. McCann to invite President Clinton to give several paid speeches, which he has done.”

According to press reports, UBS paid Clinton about $2 million in speaking fees between 2011 and 2015, frequently pairing him with his Republican successor, former president George W. Bush. UBS paid Hillary Clinton $225,000 for a 2013 speech.

The most lucrative single relationship brokered by Band was with Laureate International Universities, the largest for-profit chain of private colleges worldwide. Laureate was the only institution that actually paid more to Bill Clinton personally—a whopping $3.5 million a year to “provide advice and serve as their Honorary Chairman”—than it donated to the Clinton Foundation.

One section of the Band memo is headlined, “Independent For-Profit Activity of President Clinton ( i.e., Bill Clinton, Inc.)” The former Clinton aide writes, “In that context, we have in effect served as agents, lawyers, managers and implementers to secure speaking, business and advisory service deals. In support of the President’s for-profit activity, we also have solicited and obtained, as appropriate, in-kind services for the President and his family—for personal travel, hospitality, vacation and the like.”

All told, this amounted to “more than $50 million in for-profit activity” and “$66 million in future contracts, should he choose to continue with those engagements.” This included four business deals in effect for the former president at the time the memo was written, in late 2011, as well as numerous paid speeches and appearances.

What Band outlines in the memo is the real substance of capitalist politics. Bill Clinton, as a former president, was being richly rewarded for his services to the American capitalist class. At the same time, the business connections facilitated the political career of Hillary Clinton, who was a U.S. Senator from New York from 2001 until 2009, an unsuccessful presidential candidate in 2008, and Secretary of State from 2009 to 2013.

All the information made public by WikiLeaks on the Clinton campaign comes in the form of emails and attached documents sent to and from Clinton campaign chairman John Podesta. A fixture in the Democratic wing of the political establishment, Podesta was White House chief of staff under Bill Clinton from 1998 to 2001, founded and ran the Center for American Progress, a Democratic Party-aligned think tank, from 2002-2011, and returned to the White House as counselor to President Obama in 2014-2015.

The Clinton campaign has made no response to the latest WikiLeaks revelation, other than to reiterate its denunciation of all the leaked documents as material “hacked by the Russian government and weaponized by WikiLeaks.”

Both the US government and the Democratic campaign have claimed Russian responsibility for the hacking, without offering the slightest evidence. Instead, the presumed Russian “interference” in a US election campaign is being incorporated into the overall campaign to demonize Russian President Vladimir Putin over the civil war in Syria, the conflict in east Ukraine, and the mounting tensions between NATO and Russia all along Russia’s western border.

Perhaps the most explosive aspect of the latest WikiLeaks documents is the suggestion, for the first time, of concrete evidence of a link between fundraising for the Clinton Foundation and payments to Bill Clinton personally, and Hillary Clinton’s actions as Secretary of State.

One of Teneo’s main customers, Dow Chemical, carried out a major investment in Northern Ireland during Hillary Clinton’s tenure at the State Department. Clinton named Declan Kelly, the partner of Douglas Band in fundraising for “Bill Clinton Inc.” as a State Department representative for encouraging US investments in the British-controlled territory. Dow paid Teneo $2.8 million in 2011, soaring to $19.4 million in 2012, according to internal Dow documents reported by the Washington Post. An investigator hired by the company later wrote, “It appears Dow is paying Teneo for connections with Clinton.”

WSWS

Posting New Secret Trade Docs, Wikileaks Further Exposes Corporate Plot

Published on
by

Despite its importance both the US Presidential candidates Hillary Clinton and Donald Trump have thus far given no position on the TISA Agreement.’

Members of the Confederal Group of the European United Left hold posters with the slogan ‘Stop Tisa’ (Trade in Services Agreement) during a voting session at the European parliament in Strasbourg, France. (Photo: Vincent Kessler /Reuters)

Even as it continued to post new batches of emails from Clinton campaign chairman John Podesta, Wikileaks on Friday also published new draft chapters of the Trade in Services Agreement (TISA) which shed new light on the pending deal that critics say puts global economies at further risk from powerful banks, financial institutions, and corporate greed.

“People want to live in a democracy; they want quality, accessible public services; a well-regulated financial sector; and decent jobs for all ― the opposite agenda of the deregulation, locked-in privatization, and antidevelopment fundamentals of the secret proposed TISA, according to today’s explosive leak.” —Deborah James, CEPRThe latest release follows a series of others by the pro-tranparency publication and comes just days ahead of the next round of TISA negotiations set to begin Monday in Washington, DC. The leaked documents included in Friday’s release include three draft chapters from the agreement—covering “Financial Services,” “Localization Provisions,” and “Bilateral Market Access.” The chapters are from June of this year and bring the number of documents related to the TISA negotiations published by Wikileaks up to 70 total.

Along with the Trans Pacific Partnership (TPP) and the TransAtlantic Trade and Investement Partnership (TTIP), TISA is actually the largest of the “Three Big T’s” of pending international agreements that seek to further shape the global economic and legal systems in favor of major corporations and elite interests. TISA is the largest of the three deals, and according to World Bank figures cited by Wikileaks, services that would be covered by the massive agreement comprise around 75% of the EU economy, 80% of the US economy and the majority of economies of most countries.

However, notes Wikileaks, “despite its importance both the US Presidential candidates Hillary Clinton and Donald Trump have thus far given no position on the TISA Agreement.”

According to one of the companion analyses by Wikileaks released alongside the TISA chapters, the current deal, if finalized, “would heighten risks of financial instability and handcuff governments’ ability to respond to a domestic or global financial crisis at a time when everyone (except the finance industry and its political allies) agree that we need more financial regulation, not less.”

In response to the latest leaks on Friday, the leaders of organized labor unions said it was more clear than ever that TISA “is no more than a corporate power grab and that negotiations must be stopped.”

In a joint statement, those unions said the wide scope of “the deregulatory agenda and attack on democratic governance” found in the TISA chapters “has been exposed” and criticized European Union governments for attempting to hijack control of every level of governance from the municipal to national levels of partner countries. Their review of the chapters found clear evidence that European countries are demanding deeper liberalization of public services both within the EU and beyond.

“The EU position ignores the potential danger of exporting aggressive privatisation policies to the developing world, which have already been shown to be the cause of social and political instability in many EU countries,” said Public Services International (PSI) General Secretary Rosa Pavanelli in a statement.

As Deborah James, Director of International Programs of the Center for Economy and Policy Research (CEPR) in Washington, DC, offered in her analysis of the leaks:

The leaked EU “requests” include asks that Costa Rica and Peru subject services offered at the subnational (local) level to the TISA liberalization rules. Unless the EU can demonstrate that all services offered in every municipality in these countries are already open to foreign suppliers, these are demands that would lock in any privatization of public services at the local level and open those services to competition from foreign services providers ― which the EU has constantly claimed it is not asking for.

The EU’s demands also include access to postal services in Chile, Costa Rica, Mexico, Pakistan, Panama, Peru, and Turkey, and in several developed countries participating in the talks. Many countries maintain cross-subsidization programs that are an important part of enabling national communication from rural areas. If countries make commitments in this sector, then they would have to provide the same subsidies to foreign corporations as their own domestic firms, and would not be able to renationalize the sector if privatization was found to have adverse impacts.

The EU’s demands also include access to sanitation, sewage, and other environmental services, which are often administered on a local level; telecommunications (including broadcasting); retail and distribution services; shipping; air and maritime transport; energy and mining services (which are extremely sensitive particularly in Latin America); and others. In addition, the EU is requesting more commitments on financial services in nearly every country.

Fred van Leeuwen, General Secretary of Education International (EI), said that in addition to TISA’s concerning contents, the secrecy surrounding how the deal is being negotiated remains troubling.

“These leaks give a clear indication of the dangerous direction of the TiSA negotiations,” The fact that citizens and civil society are still obliged to rely on leaks for getting a sense of the direction of the negotiations is deeply unsatisfactory.”

And Ron Oswald, General Secretary of the International Union of Food Workers (UIF), indicated that organized labor should really only have one set of demands at this point.

“It’s time to halt the negotiations, publish the secret texts and ensure the widest possible public debate to expose the full extent of the threat these treaties pose to democracy and the labour movement,” Oswald said.

And as CEPR’s James declared, “Globalization’s cheerleaders are all handwringing about the widespread opposition to trade pacts. But what they don’t acknowledge is that people around the world are not rejecting ‘trade,’ they are rejecting corporate control over our lives. People want to live in a democracy; they want quality, accessible public services; a well-regulated financial sector; and decent jobs for all ― the opposite agenda of the deregulation, locked-in privatization, and antidevelopment fundamentals of the secret proposed TISA, according to today’s explosive leak.”