Hillary Clinton is using a prominent surrogate to attack Bernie Sanders’ emphatic proposals for reforming Wall Street: Gary Gensler, former chair of the Commodity Futures Trading Commission.
Gensler, who is the Clinton campaign’s chief financial officer, has enormous credibility among financial reformers after his aggressive (and lonely) efforts to rein in banks during the early years of the Obama administration.
As a result, the Clinton campaign has tapped him to fend off Sanders and make the difficult case that Clinton is genuinely interested in cleaning up Wall Street.
Gensler, for instance, delivered a pre-buttal before Sanders’ speech on Tuesday, and deemed it insufficient afterward.
But Gensler’s attacks on Sanders come across as hollow given that the Clinton campaign has been largely silent on the issue that defined Gensler’s legacy – the regulation of derivatives – and the undermining of that legacy by the man Obama chose to succeed him.
Much of what Gensler accomplished at CFTC has been washed away by his successor, Timothy Massad. But reversing Massad’s weakening of financial reform is barely a feature of Clinton’s platform.
Gensler came to the Obama administration from Goldman Sachs — in fact, Sanders tried to block him from becoming CFTC chair in 2009 for that reason. Despite his background, however, Gensler used his considerable power to rein in the out-of-control derivatives market. Derivatives are different types of bets placed by investors who don’t own the underlying assets. They helped fuel the 2008 financial crisis by magnifying the amount of money at stake when the housing bubble collapsed.
When he was at the Treasury Department in the Clinton administration, Gensler worked to ban derivatives regulation. But after the crisis, he helped write stronger derivatives language in the Dodd-Frank financial reform bill, ensuring that they would be transparently traded through central clearinghouses — giving everyone a window into their risk and scope.
He took extreme action to preserve those rules, beating back lobbyists and even fellow regulators. Gensler’s former friends on Wall Street felt betrayed; his name became “like a curse word,” according to former SEC Commissioner Daniel Gallagher.
But since his departure in early 2014, most of Gensler’s priorities for a transparent derivatives market with consistent rules of the road have been weakened or obliterated. Massad, a former corporate lawyer, is known for pursuing a “softer tone” with the financial institutions he regulates, as well as handing the industry favors that roll back what Gensler worked so hard to accomplish.
Last month, for instance, the CFTC passed new rules that waive the initial collateral requirement on so-called inter-affiliate trades occurring between subsidiaries of the same corporate parent. Goldman Sachs and Citigroup lobbied heavily for the concession, according to federal disclosures. Not only will this save those banks — two of the largest derivatives traders — billions of dollars, but it creates what Better Markets CEO Dennis Kelleher has called a “ticking time bomb,” with uncollateralized exposures making it more difficult to wind down failing firms. Massad has openly called for leniency on other capital rules that would save banks cash.
A bigger issue has been repeated delays of the so-called cross-border rule, governing whether CFTC can monitor derivatives trades performed overseas by firms with substantial business in the United States. The fifth and most recent delay occurred last August; it’s unclear when, if ever, it will be finalized.
Gensler has said that inadequate cross-border rules would make 70 to 80 percent of derivatives regulations irrelevant, because firms could just site their trades wherever rules are weakest, allowing risk to pool at large traders outside the prying eyes of regulators.
That’s precisely what has occurred. Reuters reported in August that banks have hidden hundreds of billions in swap trades overseas to avoid oversight, taking advantage of a loophole carved out of a footnote. As much as 95 percent of some derivatives markets have disappeared over the past two years. Massad has made virtually no effort to change the rules to bring overseas trades back under CFTC jurisdiction.
These are just some of the many ways Gensler’s accomplishments have been undermined. But Hillary Clinton’s Wall Street reform plan doesn’t dwell on them.
She wants to reinstate the “swaps push-out” rule to force derivatives trading desks to be separately capitalized — something Congress, not Massad, eliminated. And she makes a vague nod toward enhancing “international cooperation” on collateral requirements for derivatives trades. But bringing international collateral rules in line doesn’t really address what Massad did to U.S. rules just last month.
When asked for Gensler’s views on Massad’s tenure and whether a hypothetical Clinton administration would prioritize restoring stronger derivatives rules, the campaign declined to comment.
Gensler’s comments about Sanders repeatedly attacked him for failing to consider the shadow banking system: the collection of financial institutions whose activities sit outside the regulatory perimeter. But after two years of CFTC give-backs, much of the derivatives market sits in the shadows as well. On this point Gensler and Clinton have said little, and the silence speaks volumes.
Top photo: Gary Gensler testifies on Capitol Hill in 2013.
Today, Reuters reported the CFTC had fraudulent accounting statements while Gary Gensler was Chairman. The accounting discrepancies were significant.
I will eat my hat if the CFTC significantly punishes Wall Street, or if the CFTC finally rewards any of Wall Street’s thoughtful critics.
Dodd Frank has provision for bail-in by Main Street depositors in case of next collapse of TBTF. Barney Frank is Hillary’s adviser.
Symbiotic Economics: Social Darwinism | Filed in: Weekly Column
17 October 2007; Volume 9, Issue 35
http://www.wondersprings.org/files/SEsocialdarwinism10-17-7.html
Ten Powerful Reasons Why Bernie Sanders Scares Wall Street
Saturday, 09 January 2016 00:00
By Steven Rosenfeld, AlterNet | News Analysis
http://www.truth-out.org/news/item/34314-ten-powerful-reasons-why-bernie-scares-wall-street
Sen. Bernie Sanders warned about the risks of deregulation eight years before the fiscal crisis of 2008.
https://berniesanders.com/issues/reforming-wall-street/
Didn’t Sherrod Brown do the same back flip? after all the noise against Citizens United, he endorsed the candidate with the biggest corporate war chest, Hillary Clinton? There is no corporately-backed Wall st. reform possibility. That’s fiction.
Bernie’s been right on this economic stuff for 50 years. Folks just need to step aside and follow his lead.
A little bird told me … Bernie (believe it or not) Sanders will be the neo-Democrat candidate, via default. It seems Hillary (The Wicked Witch of the West) Clinton will soon be entering a period of either enforced re-habilitation or re-habituation. (whichever comes first)
Clinton is as big of a crook as her husband. I do not want her for dog catcher.
I don’t know if this financial mess can ever be fixed. Someday the average taxpayer will quit funding the wealthiest 1% because they disappear. There is only so much blood to be squeezed out of the taxpayer. As Bernie says if they’re too big to fail they’re too damn big. Most of the lawmakers work for the ones they write laws for and just switch positions with every administration. It’s win win for big corporate interests and the uninformed voter just ends up being screwed out of what little money he’s allowed to earn in the market (jobs). No wonder the middle class has been shrinking, they’ve been robbed blind by corporate greed. This type of “theft” has got to come to an end if this country is to survive. We somehow need to get leaders with “our” interests at stake instead of corporate industrialists.
Pay back paper money with paper money and retake the hard assets for the nation. Just hand the Rothschild’s a check and demand they open their hard drives to us. Oh, and be sure to get the gold (thousands of tons of it) the Rothschild’s bought with paper money and put it back in Fort Knox.
I’m exhausted from reading all the Clinton-Wall-Street – I was there on September 11th- crapola. Just today in the HUFFPO, a story, “Hillary Clinton Is Not Telling The Truth About Wall Street.” People who are ‘poor,’ like the Clintons, following their regime in Washington, really should not be pretending to understand anything to do with money. How they can look at a combined net worth of over $100,000,000 and feel they have sacrificed for the good of the people is beyond me. I certainly imagine it is hard to know what the real world looks like.
Gensler is yet another in a line of Goldman–>FedGov policy drivers, the inside men who are there to assist their banking cronies. This became the GS practice from the time of Rubin. To portray anything Gensler did at CFTC as driving any kind of meaningful outcomes is a joke. The Federal Reserve Act was similarly railed against by bankers as “Too stringent” and “Anti-bank”. We all know how that turned out. Watch what they do, not what they say.
Gensler will not be able to fill the shoes of such minds who’ve fully recognized the agony and the defeat that has saturated the USA due to derivatives & general Wall St./bank gambling. The VOLCKER Rule which was to preserve Policy, stop banks from speculating and from investing in hedge funds and private equity funds was from a very good Mind. We have so much capitalist greed saturating our Government through Lobbying Firms and Corporate CEOs voices in the ears of the Congress, that we hardly understand the extreme nature of the devouring of democracy. We have few threads of democracy left in this country. And we have few American Tax Payers who understand that. Glass-Steagall Act needs to be reinstated urgently. The only people arguing against that idea are the greedy, already filthy rich Corporate Owners and Lobbyists paid by those same people, to do their dirty work. Gensler is just doing Hillary’s dirty work, in my view. We dare not elect yet another Politician, focused on MORE OF THE SAME. Instead, we need to laser like focus on electing a President with ETHICS – Bernie Sanders, and a Congress with a BRAIN, and Heart that cares fully about the citizens, more than about corporate greed. It was after all Hillary’s husband, under enormous push from REPUBLICANS in CONGRESS, who repealed Glass-Steagall. How dare we be so stupid as to think she is going to do things differently. She was raised as a Republican. Just claiming to be a Democrat does not make you one in fact. VOTING and ACTING like a true Democrat is a very different set of actions. VOTE SANDERS.
Commodity Futures Modernization Act of 2000…under enormous pressure or not, Clinton signed this dumbass bill…in my mind Clinton was a fabulous Republican president because he did so many things they wanted….Hillary has pretty much followed that same line and only mimics Sanders in order to gain populist support…I think we should keep in mind that Sanders came out first with the causes he has Always supported and Hillary sat silent only to come out later with her own version of Sanders ideas claiming them as her own..ya..definitely Vote Sanders..last time I voted Stein and if Sanders isn’t around I will again..
COPYCAT CLINTON AT IT AGAIN. WHICH ONE OF BERNIE’S PLANS/IDEAS WILL SHE STEAL TO TRY AND WIN OFFICE NEXT…
So basically Gensler is Hillary’s Volcker?
Bernie needs a better foreign policy. Domestically I have no problem with him but we someone who will stop the MIC from destroying the earth.
Until the legal bribery system we have stops. No one will change any of that. I imagine a president that truly tried to stop all the bombing would be assassinated. Your right it would be nice to see, but I don’t think that anyone will be able to pass anything that conflicts with banker or corporation profit until the bribery stops. We need publicly funded campaigns and direct voting.
Swetshop you are getting there but go deeper! Where does the ‘money’ come from to begin with? Limitless currency creation out of thin air is the source of problem, it’s the snake’s head. Voting is irrelevant until our current system is abolished and replaced. Central Bank>Corporate Banks>Corporations>Treasury>Congress>President
I have no idea how to get there but do we start at the head or the tail first? (Tail hasn’t been working out so good)
I like Ellen Brown’s idea of each state having a public bank, like North Dakota has. I don’t like what the Fed does (flooding the economy with money that was just squirreled away by all the usual suspects). But maybe if its board were made up of informed citizens (not professional bankers), it would serve the common good, and not the corporatists and bankster class.
All i keep seeing is jewish noses, which means america is been ran by tyrannts.
That logic seems to check out. The link between large noses and tyranny has been well documented. It’s good to see someone really get to the point. Good work gunzenbomz.
When they all have nose jobs,who can finger them?
This Goldman Sachs turd is Hillary’s chief financial officer?!! That’s exactly what’s wrong with her and our government. Im tired of this crap! I’m voting Bernie.
nice article, so objective and to the point. Leading me to investigate for myself, as objective as media should be. Well done!
Once again Hillary reacts because of the presence of Bernie. Does she espouse anything original that isn’t motivated by Bernie Sanders?
Gensler is an outstanding example of why
one should NEVER trust a corporate party member.
First he helps create a disaster,
then he pretends to be a knight in shining armor,
then he helps create a disaster,…….
They are all (Warren and Sanders included)
a bunch of frauds.
Now wait a minute, your comment , Clark, is completely unfounded and untrue. Name one instance in which Warren and Sanders are Frauds. Sanders blocked this schmuck, one of the only. Or are you prepared to admit , Sander is a hell of a lot smarter and knowledgeable than yourself? Sanders , nor Warren are frauds, you , Clark, are the fraud. Accusations with no realistic or proven evidence. Clark is a conspiracy junky me thinks.
Sorry Dan, they are just puppets playing their role in the show. Warren is a multi-millionaire masquerading as a populist=fraud. She never names names, just speaking in generalities because Larry Summers told her to shut the f*** up and she knows who is in charge. She told schools she was an Indian but told a reporter she never told them and had no idea why they listed as such. Once caught she apologized for not telling the public she was actually an Indian and the media struck her denial lie from their memories. Which military spending bill has she or Bernie voted against??? Bernie even wants to bring the disastrous F35 to VT. When have they discussed ending support for Saudi Arabia??? You certainly cannot deny that any ally of the House of Saud should resign from congress. Did they take a stance against invading Yemen, Libya, Syria because this time it was their party doing the invading??? Pay attention to the big picture and you will get there, the first thing is to shut off the tv and avoid all corporate media. I am embarrassed I once fell for this too!!!
I will only vote again when I am allowed to vote ‘none of the above’ and it actually gets counted in the tally.
Don’t throw away your vote by not voting. If you don’t like any of these two parties take a look at Gary Johnson. I’m changing to democrat to vote for Sanders in the primary but Johnson will have my vote in the general election.
Sanders has “always” (his word) supported the
corporate democrat candidate for president and
he has pledged to do so again. He knows that his
candidacy has only been endorsed by 2 US congressional
representatives and 1 US senator (himself).
He has tried to protect Clinton from having to
be held accountable on several occasions – even as
he pretends to be her opponent.
Clinton has been endorsed by 148 US congressional
representatives and 37 US senators (besides Sanders).
I mention these endorsements because they are all
“super-delegates” who will work to force other delegates
into compliance at the fake convention later this year.
Also, of the 2 congressmen who endorsed Sanders,
Grijalva has also endorsed Clinton.
Also, Sanders’ own (fake) “progressive caucus” has
overwhelmingly endorsed Clinton.
Do you think Sanders is unaware of these facts?
He talks a great deal about domestic issues and avoids
foreign policy because THAT would expose his support
over the years for the same imperialism as Clinton
(which is a major part of the economics which has
caused the problems he says he will fix).
Warren arrived in the senate after she went into the
Obama house of fraud and helped set up the
Consumer Financial Protection Agency
in a way which makes sure that the agency
will NOT really have any teeth and will be subject
to the whims of the always corporate controlled
Secretary of the Treasury. She uses WORDS to make
herself appear as if she is a champion of equal justice
while she undermines what her words lead people to believe.
They are both typical democrat operatives who help
maintain the illusion that the democrat party is not
a corporate owned party,
which they know it is,
just like their republican allies.
Since Dan has no ammunition he will call you a troll next! LOL
Hillary is so in bed with wall street, anyone who believes she will do anything positive for the average American is a complete sucker. She will say anything to get elected. It boggles my mind that so many Americans are so incredibly gullible. People just go on believing her lies. How f___ing stupid can you get.
Wonder what Brooksley Born thinks of Gensler? And wasn’t Bill Clinton’s Commodity Futures Trading Act largely responsible for the 2008 collapse? (in addition to losing Glass Steagall)
Brooksley Born’s the best thing that almost happened.
Curse the Summers bunch punks.
I was wondering where he came Gentler from with all that! I’ve been so completely uninterested by any and all things Hillary that I didn’t even realize he was on her staff. That makes a sense. Gentlers attacks felt forced and lacked merit. I think Sanders & Warren are spot on and It’s incredibly refreshing to see those too sticking up for working class Americans!
Elizabeth Warren likes Hillary’s Wall St. reform plan; and Paul Krugman claims it is better than Bernie’s plan.
Krugman hasn’t weighed in on the latest from Bernie. I’d love to see that since more specifics have been revealed. Also haven’t seen Yves Smith weigh in, which I would love, nor other economists. That said, I just don’t believe Hillary actually wants to do what she is now saying she wants to do, nor do I think she has the ability to drive a political movement like Sanders does. Which is what will be required for any real change to occur….
Exactly, well put.
Um,, but Warren has NOT endorsed Clinton, and just yesterday praised Bernie Sanders for his recent speech. Warren has not done that for Clinton. Who cared about Paul Krugman, he is irrelevant. He some childhood hero of yours? Anyone keeping up the reading on financial institutions and banking industries know , without a doubt, Sanders plan attacks the heart of the problem on wall street. While Clinton defends her Banking clientele, and claims her husbands brilliant handling of the repealing Glass St-eagle act is somehow UN-related and UN-important. But then you have to be naive to believe that too don’t you? Or are you a Clinton spokesman Anna Fields? Clinton’s plan is nothing but weak sauce that does nothing to protect our economy, it protects the bankers future investment speculation is all. Sadly, us taxpayers will be the ones bailing them out yet again.
It all comes down to one or two days. The next time this giant bubble of cash they’re all getting rich on disappears, they’re going to be back at the public trough demanding a multi trillion dollar bail out or else, humanitarian programs to help distressed homeowners by giving money to their banks for foreclosing them, etc. The question is… is there ever going to be a time when the protesters rise up, shut down Washington, make it physically impossible for the lawmakers to get together and pass all the things they absolutely must pass, now, to stop the collapse of the global banking system?
Thanks for the article. Impressive that Gensler is part of Clinton’s campaign staff.
How much can be done to regulate the financial sector isn’t clear, but Sanders’ recent proposals for regulating Wall Street via the Fed aren’t at all convincing, and aren’t even workable in some cases.
At least Sanders is willing to do something about it. I am not convinced that an HRC presidency would try to keep Wall Street in check. Her track record reflects someone who is pro-corporation and anti-union.
Breaking up big banks, adding a tax on speculation is very “workable”. Sanders not only has the most convincing plan, but he is the only person running with the proven courage, conviction, and consistsncy to get the job done. To believe Hillary will reform wall street or pharmaceutical/healthcare is foolish.
You’ve got it precisely backward. It is Hillary’s proposals, with all their extensive, ultra-complex, subtle and convoluted tweaks of the status quo that are unconvincing and largely unworkable. Peel back the multiple layers, cut through all the hedging, the qualifications and other weasel words, and it all boils down to: “more of the same, dressed up to look impressive”. As one prominent expert put it, they amount to no more than: “…a laundry list of marginally better-than-nothing reforms that are likely to vanish into an abyss of rule-writing and regulatory dithering”.
It is Bernie’s proposals that have the power to effect real change. They aren’t complex – because they don’t need to be. Attack the corruption at its source: Wall Street is way, way too powerful. Break up the TBTF banks, and restructure the entire system – this time with real safeguards to protect the public interest. His proposals are VERY clear. And with sufficient political will – and public support – they will be highly effective.
http://www.salon.com/2016/01/05/bold_brash_and_wholly_false_hillary_clinton_is_misleading_people_about_bernie_sanders_wall_street_reform_again/
Wow! Cayce jones. You fresh off the turnip truck? Somehow , you find it better to be in bed with the bankers you plan on regulating, than to have a 50 year proven track record of fighting them? Sander is not all pretty colored lights for your limited intellect to dwell upon. He knows what the cause is/ was, and will be. His life is a life dedicated to studying economies and income inequality. But if you want a president who is in bed with the very banks that threaten to crash the global economy, and gets 80 % of her campaign finances from bankers, you should definitely vote for Clinton, she will in no way hurt the bankers status Que. I suspect you are ill informed and need to do some serious research to catch up on current and recent economic events. Research Glass St eagle for starters, Hillerys’ hubby repealed that beauty, leading to a field day of reckless lending and borrowing by unrestricted commercial and investment banks. Which had been banned since the 1920’s, and for good reason. Look it up, you will change your views on Clinton instantly. She doesn’t give a damn about the 10 dollar per hour people paying the cost of bailing out her buddies. She still gets rich.
DDAY,
Good to see your fonts again.Thanks for the insightful article.
Brandon, you think that is why Bernie tried to block him? Really?
Regarding financial regulations, Summers and Rubin already spoke definitively for the Clintons 20 years ago.
In America we live in absolute prosperity.
Every single American Citizen should be able to have their individual piece of American prosperity.
But.
Greed has rigged the game against the American Citizen.
Here is how.
16 Trillion dollars was the amount of money the Federal Reserve secretly loaned out directly following the financial collapse in 2008.
The same amount of money the Federal Government went into debt during the same exact time.
Bernie Sanders is the only reason why we know this.
sa 3738 Amendment know as audit the Federal Reserve for a short period of time.
Let the Government Accountability Office looked into the shadow organization of the Federal Reserve for the first and only time ever and since.
The GAO found out that the Federal Reserve secretly gave nearly interest free loans to American banks. Foreign banks and governments.
Now.
The bailed out banker’s are currently using this trick to guarantee profits off the backs of American Citizens.
The collective American Citizen loans banker’s money at a rate of .25% through the Federal Reserve .Those same banker’s now sell the money back to the American Citizen at a rate of 3.25% to 29.99%.
If a bank has access to the Federal Reserve that bank now has the golden ticket of guaranteed profits.
Not only are the banks are too big to fail.
The banks have monopoly of overnight interest rates that guaranteed profit.
The banks have a near monopoly on every type of consumer loan in America.
The Federal Reserve just raised the interest rate to .25% creating a windfall for to big to fail banks who are guaranteed to profit over 13 billion in 2016 on overnight interest rates alone.
The collective American Citizen through the Federal Reserve should directly loan money to the American Citizen at a rate of .25% bypassing the greedy bailed out banker’s.
The Government Accountability Office should audit every dollar ever spent by the federal government to limit government waste.
Including a yearly audit of the Federal Reserve and Board of Governors because trillions of goverment dollars passes through unaccounted for every day without a record for the American Citizen or government to scrutinize.
quote”The Government Accountability Office should audit every dollar ever spent by the federal government to limit government waste.”unquote
Yeah, well the day you see a flock of pigs flying south..call me.
Meanwhile, I have a different idea. How bout 3 million armed citizens who lost their homes, drag these WS cockroaches and WDC scumbag politicians out of their granite palaces and burn them alive in the street. Of course, the odds of either happening are the same.
It will come to that. They thing is we are not a third world country yet, the citizenry is largely cattle and those who actually vote on the issues and inform themselves are the exception to the cattle.
This legislation by Bernie Sanders demonstrates why he is a better leader and more experienced politician than Hillary Clinton.
Thank you Mike !
I’m a father of 2 beautiful daughters ages 14 and 11. I am terrified by the greed that we have allowed into our nation. I like your notion of letting them suffer for a change, rather than my kids becoming slaves for poverty wages all their lives until death. But then that same love for my kids stops me from extreme action and hope that my vote for Bernie Sanders will be the beginning of real change for my children’s sake.
“Federal Reserve should directly loan money to the American Citizen at a rate of .25% ”
The Federal Reserve should be abolished, fractional reserve banking should be treated the same as counterfeiting and the monetary power should be restored to Congress. More debt, even at minuscule interest rates, does little for the American people.
The Treasury Department creates interest bearing notes which it then sells to big banks(called “Primary Dealers”) via Treasury auctions, or sometimes directly to The Fed itself. That’s how government goes into debt. If the Treasury Department can print an interest-bearing Treasury security, there is no reason why it could not print a debt-free U.S. dollar. The dollar would still be backed by the full faith and credit of the government, but there would be no interest obligation and therefore no national debt. The idea that the Federal Reserve and the bankers are given the power to create money out of thin air and are then allowed to loan that money back to the government at interest, is totally insane. The monetary power should be the purview of Congress, not a secret cartel of private bankers.
Gary gensler a progressive hero? The guy who was a partner at Goldman Sachs and led the fight to exempt derivatives and other shadow banking from regulation. Bernie thought he was so progressive that he attempted to block his nomination to the CFTC in 2009.
He’s done some good stuff but he’s certainly not progressive. Basically he brought some of the wilder gamblers into the establishment fold.
After his tenure the banks are still too big to fail, still ripping us off with fees thousands of times higher than their costs, and the banks’ shareholders continue to pay billions in fines while the banksters themselves escape prosecution.
Wall Street gambling is a serious threat to the US, and Hillary and Gensler are part of that.
Bernie is the solution.