With White House in their sights, Democrats challenge Wall Street
WASHINGTON: On the campaign trail and inCongress, Democrats are challenging the titans of Wall Street, proclaiming a“new day” as they seek to channel the anger of their party and voters that hasraged since the financial crisis.
CEOs of America’s biggest banks were summoned for the first time since the2008 crisis by a congressional committee on Wednesday, raising their hands asthey swore their oaths ahead of their testimony.
It was a powerful image that underscored the recent change in control ofthe House of Representatives, which came under Democratic control in Januaryafter eight years of Republican rule.
“This is a new way and it’s a new day,” said Maxine Waters, the first womanand first African American to chair the powerful House Financial ServicesCommittee.
Tim Sloan, the former CEO of Wells Fargo, testified at a previous hearingin March.
This time, it was the turn of the heads of Citigroup, JP Morgan Chase & Co, Morgan Stanley, Bank of America, State Street Corporation, BNY Mellon andGoldman Sachs.
Waters had previously tangled with some of them at the peak of the crisis,when the global financial system was imperiled.
The current round of crossexaminations has less to do with thestabilization of the financial system and more the social impact of Wall Street.
“You, captains of the universe, are smart enough and creative enough andunderstand this business enough to see what you can do about these citizens,these young people,” said Waters.
Some of the Democrats on the committee have focused on spotlighting the gapbetween these executives, all male, white and fabulously wealthy, and the restof society -- a tactic criticized by the panel’s ranking Republican asheadlineseeking. In one probing exchange, Nydia Velazquez, a Democrat of New York, pressedCitigroup Chief Executive Michael Corbat to justify his 2018 pay of US$ 24.2million, an estimated 486 times that of the average employee.
Corbat said his pay was set by the board of directors and that, if he werean average employee who observed the yawning gap, “I would be hopeful thatthere’s the opportunity to continue to advance.”
“This is why people who live in a bubble and in an ivory tower cannotunderstand the anger out there, especially among millennials,” Velasquez shotback.
It is this groundswell of anger, despite sold growth figures and plentifulemployment, that Democrats are hoping to tap not only to keep their Housemajority in 2020 but also to seize the Senate – and the White House.
Wall Street and its big bosses are already a key part the of thepresidential campaigns of several candidates vying for the Democraticnomination, spearheaded by ultraprogressives Bernie Sanders and ElizabethWarren.
“Our campaign is about taking on the powerful special interests thatdominate our economic and political life,” vowed Sanders, a socialist.
The independent senator from Vermont – who votes with the Democrats – introduced a bill in October “to break up the nation’s biggest banks.”
Ten years ago, Warren was deeply involved in the rescue and reforms thattook place after the financial crisis, making regulation of Wall Street herdefining issue. She has already inked out detailed proposals for dismantling tech giants, raising taxes on huge companies and tightening financial regulations.
Warren is already a powerful voice for these issues in the Senate, thoughher party remains in opposition there. But she is delighted to see her colleagues in the House on the offensive.“The Republicans have been trying as hard as they can to reduce oversightover the biggest banks and the Democrats are now fighting back,” she told AFP.
“The too big to fail banks are bigger than ever and they are up to theirold ways of trying to hide risks on their balance sheets and at least some ofthem have been caught repeatedly cheating their own customers.
“That’s how we got into a big mess in 2008 that nearly broke the worldwideeconomy and that’s why they should be better regulated today.” — AFP