Democratic Party progressives intent on reining in Wall Street are pushing Hillary Clinton to choose people to head the Treasury, SEC and other agencies who will crack down on big banks if she wins the White House on 8 November.
“Do they have a proven track record of challenging corporate power?” asked Adam Green of the Progressive Change Campaign Committee, a grassroots group aligned with US Senator Elizabeth Warren, the party’s liberal firebrand.
In meetings with Clinton’s team, progressive groups are urging that she break sharply with the centrist, pro-business bent of some of the economic leaders who served her husband, former president Bill Clinton, and president Barack Obama.
Big US banks are voicing concern about both Hillary and Donald Trump, her Republican rival who has accused corporate America of buying influence in Washington.
RASKIN A FAVORITE
Among Democratic progressives, a favorite for Treasury secretary is Sarah Bloom Raskin, now deputy Treasury secretary and a backer of strict enforcement of the Volcker Rule that prohibits banks from making some types of speculative investments.
“I view proprietary trading as an activity of low or no real economic value that should not be part of any banking model that has an implicit government backstop,” Raskin, then a Federal Reserve governor, said in a 2012 speech.
Democratic activists, who believe Obama did not go far enough at the height of the 2007-2009 financial crisis to punish bankers and tighten regulation, want to make sure Hillary keeps her campaign promises to defend the 2010 Dodd-Frank reforms and build on them to curb Wall Street’s excesses.
Progressive priorities include ensuring the US Justice Department pursues criminal cases against bankers, not just institutions.
Some Democratic activists are wary of two potential Treasury candidates – Sheryl Sandberg, Facebook’s chief operating officer, and Federal Reserve Governor Lael Brainard – because of links to the Bill Clinton and Obama administrations.
Sandberg was chief of staff to Treasury Secretary Larry Summers in Bill Clinton’s administration and Brainard was a top lieutenant to Timothy Geithner, Obama’s first Treasury secretary.
Locked in a tight race with Trump, Hillary has said little about any future appointments. Her spokesman, Brian Fallon, said any speculation about personnel is “entirely premature” as Hillary is focusing on winning the election.
She has no obligation to heed the advice of progressives like Warren or Bernie Sanders, who challenged Hillary for the Democratic nomination. But Hillary risks a damaging intraparty rift early in her White House tenure if she ignores them.
Kara Stein, a commissioner on the Securities and Exchange Commission, and Simon Johnson, a former chief economist at the International Monetary Fund and co-author of a book warning of the dangers posed by big financial institutions, are progressive favorites for SEC chair.
Progressives also favor Gary Gensler, an adviser to Hillary Clinton, for a senior administration role because of his reputation as a tough regulator when he headed the Commodity Futures Trading Commission in the Obama administration.
‘BROAD FEELING OF REGRET’
Jeff Hauser, director of the Revolving Door Project at the Center for Economic and Policy Research, said progressives have a “broad feeling of regret” that they did not exert more pressure on Obama to name officials committed to bold financial regulatory reforms.
“It wasn’t so much that progressives lost, it’s that they didn’t understand the stakes at the time and didn’t get into the game until it was too late,” Hauser said.
Warren, who would have a big microphone in any potential fight over US Senate confirmation of nominees, in a speech last week at the Center for American Progress, warned Clinton against choosing people who work at big investment banks.
“When we talk about personnel, we don’t mean advisers who just pay lip service to Hillary’s bold agenda, coupled with a sigh, a knowing glance, and a twiddling of thumbs until it’s time for the next swing through the revolving door, serving government then going back to the very same industries they regulate,” she said.
The New York-based Roosevelt Institute think tank is seeking lesser-known candidates, some outside Washington, for at least 120 administration jobs. Their potential candidates include state attorneys general who have taken on for-profit colleges and handled large mortgage settlements.