FacebookTwitterGoogle+RedditEmail

The Clintons’ $93 Million Romance with Wall Street: a Catastrophe for Working Families, African-Americans, and Latinos

by

For 24 years Bill and Hillary Clinton have courted Wall Street money with notable success. During that time the New York banks contributed:

* $11.17 million to Bill Clinton’s presidential campaign in 1992.

*$28.37 million for his re-election in 1996.

*$2.13 million to Hillary Clinton’s senatorial campaign in 2002.

*$6.02 million for her re-election in 2006.

*$14.61 million to Hillary Clinton’s presidential campaign in 2008.

*$21.42 million to her 2016 campaign.

The total here is $83.72 million for the six campaigns,i ii disbursed from eleven congenial banks: Goldman Sachs, Citigroup, UBS, Bank of America/Merrill Lynch, Wells Fargo, Barclay’s, JP Morgan Chase, CIBC, Credit Suisse, Deutsche Bank, and Morgan Stanley.iii iv

Then there were the speeches. Sixteen days after leaving the White House in 2001, Mr. Clinton delivered a speech to Morgan Stanley, for which he was paid $125,000. That was the first of many speeches to the New York banks. Over the next fourteen years, Mr. Clinton’s Wall Street speaking engagements earned him a total of $5,910,000:v

*$1,550,000 from Goldman Sachs.

*$1,690,000 from UBS.

*$1,075,000 from Bank of America/Merrill Lynch.

*$770,000 from Deutsche Bank.

*$700,000 from Citigroup

After she resigned as Secretary of State in 2012 Hillary Clinton took to the lecture circuit as well. Some of her income has come to light during the current presidential campaign—the infamous $675,000 she was paid for three speeches to Goldman Sachs. That disclosure, however, belittles her financial achievement and the scope of her audiences. She also addressed the Bank of America/Merrill Lynch, Morgan Stanley, Deutsche Bank, UBS, Ameriprise, Apollo Management Holdings, CIBC, Fidelity Investments, and Golden Tree Asset Management. In doing so she earned another $2,265,000.vi

No other political couple in modern history has enjoyed so much money flowing to them from Wall Street for such a long time—$92.57 million over a quarter century.

During a CNN forum on February 3, Anderson Cooper wondered if Goldman Sachs’ $675,000 might impact her prospective presidential decisions. Defending her integrity with undisguised indignation, she described her independence from the banks:

Anybody who knows me, who thinks that they can influence me, name anything they’ve influenced me on. Just name one thing. I’m out here every day saying I’m going to shut them down, I’m going after them. I’m going to jail them if they should be jailed. I’m going to break them up.vii

Her campaign website confirms her fierce determination to oversee the banks and hold them strictly to account. “Wall Street must work for Main Street,” the website claims, outlining her program for “Wall Street Reform:”

Veto Republican efforts to repeal or weaken Dodd-Frank

Tackle dangerous risks in the big banks and elsewhere in the financial system.

Hold both individuals and corporations accountable when they break the law.viii

$675,000 might be insufficient to elicit Ms. Clinton’s sympathetic ear, but a quarter century of accepting tens of millions of dollars is not so easily dismissed. It would likely have some impact on the Clintons’ sense of gratitude and certainly on their social, cultural, and political environments.

Over that period of time, while one of them or the other held public office almost continuously, the couple accumulated a net worth of $125 million.ix x Measured by family wealth, this inserted the couple into the top 1% of American families by a factor of 16 ($7.88 million is the threshold).

The Clintons found that stratum of society agreeable. In New York, their home upon leaving the White House, they moved easily among other multimillionaires, the celebrated, wealthy, and accomplished people of the city. Lloyd Blankfein, Robert Rubin, and Henry Paulson are examples, CEOs of the benefactor Wall Street banks. The couple could scarcely avoid adopting the mindset, language, values, and political perspectives of the people who now constituted their peer group.

Breaking up banks, jailing the lawless executives, forcing Wall Street to work for Main Street: Hillary Clinton’s stern proclamations of impartial law enforcement and strict regulation are difficult to take seriously.

Wall Street doesn’t. One bank executive assured his clients, “We continue to believe Clinton would be one of the better candidates for financial firms.” He was quoted in a CNN Money article, “Wall Street Isn’t Worried about Hillary Clinton’s Plan,” which stated,

Hillary Clinton unveiled her big plan to curb the worst of Wall Street’s excesses….The reaction from the banking community was a shrug, if not relief.xi

There is good reason for the banks’ sanguine view. Over the 24 years of the romance, the Clintons first reoriented their political party, gave it a new name, the New Democratic Party, and put it at Wall Street’s service. Then they engineered financial opportunities for the New York banks of immense value—running into the hundreds of billions. And through the years as President, Senator, and Secretary of State the Clintons supported Wall Street’s interests at every necessary turn and without fail.

In the early 1990s, chairing the Democratic Leadership Council, Bill Clinton ushered in the centrist, triangulating New Democratic Party, explicitly to be more business-friendly—and to attract the financial support of corporate America. Wall Street supported his 1992 campaign handsomely, and Bill Clinton became the first president under the new banner. Hillary Clinton was at his side, a de facto minister-without-portfolio.

When he appointed Robert Rubin of Goldman Sachs as Secretary of the Treasury Department, Clinton established a precedent. For the next 24 years every Administration would find Wall Street executives to serve in the position. The New York banks became the primal clients of the New Democratic Party.

But the working families of America and the African-American and Hispanic communities—the party’s historic constituencies—were betrayed and abandoned, deprived of effective representation in Washington. The Clintons’ political campaigns over the next decades became monumental hypocrisies, Bill donning sunglasses to play his saxophone for Arsenio Hall, Hillary visiting black churches to hug the parishioners. They speak warmly to the traditional constituencies with carefully scripted political rhetoric, currying their favor, depending on them for electoral victory, but effectively obscuring the truth of their betrayal.

The traditional constituencies were not only betrayed, but targeted. On taking office Mr. Clinton announced, “The era of big government is over.” On that cue he co-opted two issues long

used by Republicans to mask their party’s racism: “welfare” and “crime.” To address the issues two laws were passed in Clinton’s first term that savaged the betrayed constituencies.

The first was The Personal Responsibility and Work Opportunity Reconciliation Act. It fulfilled Clinton’s promise to “end welfare as we know it,” and the punishing effects it set in motion have yet to abate. Since the end of the Clinton Administration, poverty in the U.S. has nearly doubled: “…the number of Americans living in high-poverty areas rose to 13.8 million in 2013 from 7.2 million in 2000, with African-Americans and Latinos driving most of the gains.”xii

To show how tough on crime he could be, Clinton next guided The Violent Crime Control and Law Enforcement Act of 1994 through Congress. A flurry of prison construction quickly followed, an industry of private for-profit prisons took hold and flourished, and a skyrocketing population mostly of young black males soon filled them, most frequently charged with drug offenses, non-violent and victim-free.

Sixteen years later the effects of the law were described in a searing book: The New Jim Crow: Mass Incarceration in the Age of Colorblindness.

The author of the book is a distinguished legal scholar and human rights activist, Michelle Alexander.

Ms. Alexander well understands how the Clintons and their creation, the New Democratic Party, left working families and communities of color without a political voice. And no one addresses the tragedy more forcefully. Her latest work is an article, “Black Lives Shattered,in the February 29, 2016 issue of The Nation. She details how the two Clinton laws have devastated African-American families and sent millions—particularly those young black males—to prison. In the article’s caption, she asks, The Clinton’s legacy has been the impoverishment of black America—so why are we still voting for them?

The online version of her article carries a different title, Why Hillary Clinton Doesn’t Deserve the Black Vote . Her compelling case is abbreviated in the subtitle:

From the crime bill to welfare reform, policies Bill Clinton enacted—and Hillary Clinton supported—decimated black America.

When pressed, and with limited enthusiasm Hillary Clinton now apologizes for the laws, suggesting they are no longer quite so appropriate.

But she has not, cannot, and unquestionably will not mention two other laws passed at the bidding of President Clinton’s Treasury Secretary, Robert Rubin.

These laws enriched the Wall Street banks by hundreds of billions of dollars, but they too devastated working families, African-Americans, and Latinos.

The first was The Financial Services Modernization Act of 1999, repealing the Glass-Steagall legislation of 1933. Now it was legal once more for financial institutions to mix commercial and investment banking. Goldman Sachs et al. could now use depositor’s funds, insured by the Federal Deposit Insurance Corporation, to buy up “subprime” mortgages, the high-interest debt obligations of typically low-income, black, and Latino families.

The next law was The Commodity Futures Modernization Act. Now Goldman Sachs et al. could transform packages of those “subprime” mortgages into complicated derivatives called “mortgage-backed-obligations,” have them fraudulently rated as AAA investments, and sell them around the world, without limit, without restriction, without regulation, at immense profit.

For eight years the bubble inflated, and then it collapsed in the last year of George Bush’s Administration. Real estate values plummeted. The stock market was hammered. So was the U.S. economy. And so tragically were many low-income, African-American, and Latino families. $13 trillion in household wealth vaporized. Nine million workers lost their jobs. Five million families were evicted from their homes.xiii

This is what the Clinton Administration, and the New Democratic Party, had wrought.

The banks were caught with hundreds of billions in mortgage-backed derivatives still in the pipeline, the market values of which were dropping like stones. Wall Street’s prospective losses were horrific; bankruptcies loomed. But George Bush’s Treasury Secretary was the obligatory Wall Streeter: Mr. Hank Paulson, recently CEO of Goldman Sachs. In a heartbeat Mr. Paulson rammed through Congress The Emergency Economic Stabilization Act of 2008. It was known as the “Troubled Asset Relief Program,” and it handed Mr. Paulson $700 billion of taxpayers’ money to buy the near-worthless securities from the banks.

Hillary Clinton, now the U.S. Senator from New York, voted for the bill, telling a New York radio station the next day, “I think the banks of New York..are probably the biggest winners in this.”xiv

Eagerly, Mr. Paulson started buying, typically paying the banks half again the market value of the “troubled assets.”xv But a presidential campaign was underway, and soon he would have to stop.

Barack Obama, overcoming Hillary Clinton in the primaries, was elected as the second president from the New Democratic Party. Mr. Obama’s campaign contributions from Wall Street:

*Goldman Sachs: $1,034,615

*JP Morgan Chase: $847,855

*Citigroup: $755,057

*Morgan Stanley: $528,182

The total here is $3.7 million.xvi (Hillary Clinton’s campaign, apparently thought more likely to succeed, was supported with $14.6 million from the banks.xvii)

President Obama’s choice of Wall Street bankers to head his Treasury Department was Mr. Timothy Geithner, lately the president of the Federal Reserve Bank of New York. Mr. Geithner wasted no time in resuming the “troubled asset” purchases, and his execution of the program was no less profitable for the banks than Mr. Paulson’s.xviii

Wall Street’s grip on the New Democratic Party, however, and its influence in the Obama Administration, appeared in the Department of Justice as well. Mr. Eric Holder joined the Administration from the law firm of Covington Burling, which represents in Washington most of the Wall Street banks. Charged with prosecuting their criminal behavior, Mr. Holder found the banks “too big to fail.” Instead of criminal indictments and lawsuits, then, Mr. Holder negotiated with each of the banks a financial penalty to be paid from corporate funds. No corporate executives were jailed, no personal fines levied, no records of criminal conduct filed, no salaries reduced, no bonuses denied.

Today the Wall Street banks are larger and more powerful than ever, and Mr. Holder has returned to Covington Burling. President Obama, however—of the New Democratic Party—has provided no similar relief to the brutalized working families and communities of color. Their struggles continue, the crime and welfare laws have not been repealed, and the title of a recent study tells the tragic truth: During Obama’s Presidency Wealth Inequality has Increased and Poverty Levels are Higher.xix

Because of the Clintons’ romance with Wall Street and their corrupt New Democratic Party, the New York bankers and the Clintons are richer today. Others—betrayed, abandoned, savaged—are not.

Notes.

i“Two Clintons. 41 years. $3 Billion,” Washington Post, November 19, 2015

ii“Occupy Hillary Clinton’s Wall Street Speeches,” Huffpost Politics, February 28, 2016

iii“Hillary Clinton. Top 20 Contributors, 1999-2002,” http://www.opensecrets.org/politicians/contrib.php/type==C&cid..

iv“Hillary Clinton, Jeb Bush Still Favorites of Wall Street Banks,” Huffpost Politics, October 22, 2015

v“$153 Million in Bill and Hillary Speaking Fees, Documented,” Robert Yoon, CNN, Updated February 6, 2016.

vi“Hillary Clinton Made More in 12 Speeches to Big Banks That Most of Us Earn in a Lifetime,” https://theintercept.com/2016/01/08/hillary-clinton-earned-more-from-12-speeches-to-big-banks-than-most-americans-earn-in-their-lifetime/

vii“Clinton Defends Wall Street Speeches at CNN Town Hall,” Time, February 4, 2016

viiiFrom Hillary Clinton’s campaign website, under “Wall Street Reform,” http://hillaryclinton.com/issues/wall-street

ix“Hillary Clinton net worth: $45 Million,” http://www.celebritynetworth.com/

x“Bill Clinton net worth: $80 Million,” http://www.celebritynetworth.com/

xi“Wall Street Isn’t Worried about Hillary Clinton’s Plan,” CNN Money, October 8, 2015.

xii“Poverty Has Nearly Doubled Since 2000 in America,” International Business Times, August 9, 2015

xiii“Wall Street Reform: Wall Street must work for Main Street,” http://hillaryclinton.com/issues/wall-street

xiv“Hillary Clinton’s Tough Talk on Wall Street,” http://www.thedailybeast.com/articles/2015/11/13/hillary-clinton..

xv“Troubled Asset Relief Program,” Wikipedia

xvi“Barack Obama. Top Contributors, 2008 Cycle,” http;//www.opensecrets.org/pres08/contrib.php/cid=

xviiWashington Post, “Two Clintons. 41 Years. $3 Billion”

xviiiSee Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, by Neil Barofsky, passim.

xixhttp://www.counterpunch.org/2016/02/26/during-obamas-presidency-wealth-inequality-has-increased-and-poverty-levels-are-higher/

Richard W. Behan lives in Corvallis, Oregon. He can be reached at: rwbehan@comcast.net.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
February 24, 2017
Friday - Sunday
Jeffrey St. Clair
Roaming Charges: Exxon’s End Game Theory
Pierre M. Sprey - Franklin “Chuck” Spinney
Sleepwalking Into a Nuclear Arms Race with Russia
Paul Street
Liberal Hypocrisy, “Late-Shaming,” and Russia-Blaming in the Age of Trump
Ajamu Baraka
Malcolm X and Human Rights in the Time of Trumpism: Transcending the Master’s Tools
John Laforge
Did Obama Pave the Way for More Torture?
Mike Whitney
McMaster Takes Charge: Trump Relinquishes Control of Foreign Policy 
Patrick Cockburn
The Coming Decline of US and UK Power
Louisa Willcox
The Endangered Species Act: a Critical Safety Net Now Threatened by Congress and Trump
Vijay Prashad
A Foreign Policy of Cruel Populism
John Chuckman
Israel’s Terrible Problem: Two States or One?
Matthew Stevenson
The Parallax View of Donald Trump
Norman Pollack
Drumbeat of Fascism: Find, Arrest, Deport
Stan Cox
Can the Climate Survive Electoral Democracy? Maybe. Can It Survive Capitalism? No.
Ramzy Baroud
The Trump-Netanyahu Circus: Now, No One Can Save Israel from Itself
Edward Hunt
The United States of Permanent War
David Morgan
Trump and the Left: a Case of Mass Hysteria?
Pete Dolack
The Bait and Switch of Public-Private Partnerships
Mike Miller
What Kind of Movement Moment Are We In? 
Elliot Sperber
Why Resistance is Insufficient
Brian Cloughley
What are You Going to Do About Afghanistan, President Trump?
Binoy Kampmark
Warring in the Oncology Ward
Yves Engler
Remembering the Coup in Ghana
Jeremy Brecher
“Climate Kids” v. Trump: Trial of the Century Pits Trump Climate Denialism Against Right to a Climate System Capable of Sustaining Human Life”
Jonathan Taylor
Hate Trump? You Should Have Voted for Ron Paul
Franklin Lamb
Another Small Step for Syrian Refugee Children in Beirut’s “Aleppo Park”
Ron Jacobs
The Realist: Irreverence Was Their Only Sacred Cow
Andre Vltchek
Lock up England in Jail or an Insane Asylum!
Rev. William Alberts
Grandiose Marketing of Spirituality
Paul DeRienzo
Three Years Since the Kitty Litter Disaster at Waste Isolation Pilot Plant
Eric Sommer
Organize Workers Immigrant Defense Committees!
Steve Cooper
A Progressive Agenda
David Swanson
100 Years of Using War to Try to End All War
Andrew Stewart
The 4CHAN Presidency: A Media Critique of the Alt-Right
Edward Leer
Tripping USA: The Chair
Randy Shields
Tom Regan: The Life of the Animal Rights Party
Nyla Ali Khan
One Certain Effect of Instability in Kashmir is the Erosion of Freedom of Expression and Regional Integration
Rob Hager
The Only Fake News That Probably Threw the Election to Trump was not Russian 
Mike Garrity
Why Should We Pay Billionaires to Destroy Our Public Lands? 
Mark Dickman
The Prophet: Deutscher’s Trotsky
Christopher Brauchli
The Politics of the Toilet Police
Ezra Kronfeld
Joe Manchin: a Senate Republicrat to Dispute and Challenge
Clancy Sigal
The Nazis Called It a “Rafle”
Louis Proyect
Socialism Betrayed? Inside the Ukrainian Holodomor
Charles R. Larson
Review: Timothy B. Tyson’s “The Blood of Emmett Till”
David Yearsley
Founding Father of American Song
FacebookTwitterGoogle+RedditEmail