In the first major economic policy speech of her campaign, Democratic presidential candidate Hillary Clinton outlined her plan to crack down on major financial institutions and other players on Wall Street that have benefited from rising corporate profits while the middle class lags behind.
“Over the course of this campaign, I will offer plans to reign in excessive risks on Wall Street and ensure that stock markets work for everyday investors, not just high-frequency traders or those with the best or fastest connections,” she said in the speech delivered at the New School in New York City Monday morning. “I will appoint and empower regulators who understand that too big to fail is still too big a problem.”
Despite her campaign’s claim that she would only briefly touch on Wall Street, regulation and the financial industry, Clinton dedicated a significant portion of her address to calling for reform, saying we have to “go beyond Dodd-Frank” because many U.S. financial institutions are still too complex and risky. She also specifically called out institutions in the “shadow banking system” — hedge funds, high frequency traders and non-bank finance companies — that receive little oversight and are frequently involved in misconduct and criminal behavior.
“As a former Senator from New York, I know first-hand the role that Wall Street can and should play in our economy,” she said, speaking about the industry’s ability to boost new companies that make America more competitive globally. “But as we all know, in the years before the crash, financial firms piled risk upon risk and regulators in Washington either couldn’t or wouldn’t keep up.”
To that end, she said she would continue and expand new rules issued by President Obama’s administration to crack down on Wall Street and to extend oversight.
“Those rules have been under assault by Republicans in Congress and those running for president,” she said.
While the institutions involved in misconduct have been held accountable, Clinton said the individuals responsible frequently get off unscathed. She vowed that under her leadership, they wouldn’t be allowed to pocket the profits. Instead, she proposed requiring them to put money into a trust fund to benefit the public or to be returned directly to taxpayers. She also spoke out against stock buybacks, saying they shouldn’t be used for an immediate boost in share prices, and denounced companies that hold down or decrease pay in order to cut costs and inflate quarterly stock prices.
Her tough tone was unexpected from a candidate who has previously been seen as having close ties to Wall Street
. Clinton represented Wall Street in Congress and courted the industry during her 2008 presidential campaign. And as president, Bill Clinton oversaw large-scale financial deregulation including the repeal of the Glass-Steagall Act, which allowed large banks to get away with risky activity. But her move to the left puts her in stark opposition to the candidates on the right and distances her policies from those of her husband and Obama.
Before vowing to take on Wall Street, Clinton’s economic policy address focused on the need to improve wages so the middle class can get ahead. While corporate profits are at near-record highs, paychecks have barely budged, she said. Specifically, she outlined the need to remove barriers preventing women from entering the workforce — like the lack of affordable childcare — and proposed profit-sharing models as a way for employees to share in a company’s success.
She also specifically called out her Republican rival, former Florida Gov. Jeb Bush (R), for his comments last week on how Americans need to work longer hours, and criticized Wisconsin Gov. Scott Walker’s (R) union busting efforts. “I will fight back against these mean-spirited, misguided attacks,” she said.