Nomi Prins: Hillary Clinton Will Do Wall Street’s Bidding
Oct. 30, 2016 (EIRNS)—Noted economic historian and Glass-Steagall advocate Nomi Prins published a devastating warning about Hillary Clinton and her deep Wall Street ties this week in The Nation. Under the title “In Hillary Clinton’s America, Wall Street Will Be in the Saddle,” she noted that, during the three presidential debates, there was no discussion about how to avert the next financial crash, adding that, if Hillary Clinton is elected on Nov. 8, we can expect “four more years of economic dystopia.” She blasted Clinton for refusing to embrace the reinstating of Glass-Steagall, despite intense debate within her own campaign over the issue. She warned about the prospects of a new financial blowout, noting that “today, the stakes are higher, the banks are larger and their impunity is still remarkably unchallenged.”
Prins reviewed Clintons role in bringing Wall Street into government during her time as Secretary of State, pointing specifically to Jack Lew, who she initially brought to Washington as her Deputy Secretary of State, right out of Citigroup.
She repeated the danger of a new blowout in the absence of a return to Glass-Steagall:
“Yes, the threat of another financial crisis [is real]. And keep in mind that such a future economic meltdown isn’t an absurdly long-shot possibility. Earlier this year, the Federal Reserve, the nations 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.”
Prins tore apart Hillary Clinton’s phony argument against restoring Glass-Steagall (Lehman Brothers was not a commercial bank):
“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.”
She concluded with a warning forecast:
“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."
While Prins wrote the article prior to Donald Trump’s Charlotte speech calling for the reinstating of Glass-Steagall, she is in no way a Trump backer.