Sunday, October 18, 2015

Counterpoint #2: Sanders and Clinton differ on Glass Steagall

Last Friday I blogged about Paul Krugman's take on the Democratic presidential debate. He played down differences between Sanders and Clinton thusly.

... while there are some differences in financial policy between Mrs. Clinton and Mr. Sanders, as a practical matter they’re trivial compared with the yawning gulf with Republicans.

But if you take the Republicans out of the picture, the differences loom larger, as they do for Bob Lord at Blog for Arizona, specifically the different positions on Glass Steagall.

One clear difference between Hillary and Bernie (and O’Malley) was their respective position on the repeal of Glass Steagall, the New Deal law that required a separation between commercial banking and investment banking. Bill Clinton repealed it in 1999. Sanders and O’Malley (and Elizabeth Warren for what that’s worth) want Glass Steagall re-instituted. Hillary opposes re-institution. Wall Street also opposes re-institution. Guess which candidate is hauling in the Wall Street cash?

Krugman does acknowledge that the repeal of Glass Steagall was a mistake. Implicitly, that’s a concession it should be restored.

Which means that the real difference here lies in Sanders’ and Clinton’s respective views regarding Glass Steagall, Clinton’s carefully scripted debate answer notwithstanding. And the difference is as clear as it is significant.

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