Campaigns ease Wall Street’s grip on Washington

The insurgent campaigns of Donald Trump and Bernie Sanders may have permanently changed the public debate on money and government and weakened Wall Street’s grip on Washington.

Trump vanquished 16 establishment politicians to capture the Republican presidential nomination even as he challenged orthodox views on trade and the deficit.

And despite all the political obituaries in the wake of his often outrageous statements, he remains within striking distance of Democratic rival Hillary Clinton in the polls.

Sanders permanently implanted the concept of our “corrupt campaign- finance system,” even as the former secretary of State, who beat him in the Democratic primaries, seems intent on proving just how it works.

While emails suggesting influ- ence peddling via the Clinton Foundation during her tenure at State continue to dribble out, Clinton herself is spending much of August in a marathon of fundraising events among the rich and famous at Martha’s Vineyard, the Hamptons and Hollywood.

Keep in mind that Sanders, a 74- year- old Democratic socialist with virtually no name recognition when he started his run for the White House, won 46% of the pledged ( elected) delegates to the Democratic convention and 23 of the primary contests against one of the most famous politicians in the country.

Sanders and Trump between them — different in so many respects but similar in their rejection of establishment economics — tallied 27 million votes in the primaries, compared with 17 million for Clinton.

Clinton continues to take millions in campaign donations from investment bankers, hedge fund managers and other Wall Street denizens — these are the vacationers in the Hamptons and the Vineyard, after all. The emails from the State Department show how donors buy access when they have a favor to ask.

Clinton, as a result, is sure to follow the dictates of Wall Street orthodoxy regarding the para- mount importance of reducing the federal deficit and the national debt.

This is the pattern set by President Bill Clinton, who made Goldman Sachs alum Robert Rubin his economic czar. Rubin protégés have since filled administration ranks, not only under Bill Clinton but also under Barack Obama.

In between came the Bush years, which reaped the fruits of the Clinton/ Rubin financial deregulation and added its own problems with the heavy spending on the Iraq War. This led to a near- meltdown in the global financial system, a Great Recession as devastating in some regions as the Depression itself, economic stagnation and widespread unemployment and underemployment.

So it is refreshing to hear someone such as Trump call for the federal government to borrow massively at the current low interest rates to fund $ 500 billion in infrastructure spending and be willing to take a short- term increase in debt with the confidence that investment will pay dividends in the future.

Trump’s view is unorthodox but right in line with a school of economists who think the government’s control of a fiat currency — one not tied to gold or some other arbitrary measure of value — gives it considerable flexibility in funding its spending.

“This is the United States government,” Trump told a CNN interviewer in May with regard to his views on the federal debt. “First of all, you never have to default because you print the money, I hate to tell you, OK?”

All of this is anathema to Wall Street’s deficit hawks, who prosper in an environment of shortage and who are happy to reduce government power by “starving the beast” — depriving the government of funding so it is forced to cut spending.

There are many reasons to vote against Trump — his temperament, his provocative language, his wacky conspiracy theories — but much of his appeal to voters rests on his subversive take on the economy and government finance.

The wedge driven by Sanders and Trump has opened up the debate on what government can do to startlingly innovative ideas.

The genie of insurgency released in this year’s unprecedented campaign will not go away so quickly — and could eventually lead to that “political revolution” heralded by Sanders.

Darrell Delamaide has reported on business and economics for Dow Jones news service, Barron’s, Institutional Investor and Bloomberg News.

GERALD HERBERT, AP Much of Donald Trump’s appeal rests on his subversive take on the economy.

JACK GRUBER, USA TODAY Sen. Bernie Sanders implanted the concept of our “corrupt campaign- finance system.”