In a recent interview with New York Times Magazine, President Barack Obama gave a long assessment about the American economy during his tenure in the White House from 2009 to the present. At one point, the President said that Democratic presidential hopeful Bernie Sanders was “correct” in his critique and his policy proposal that America’s largest banks need to be “broken up.”
The passage in question was written as follows in the Times, quoting the President:
‘But there is no doubt that the financial system is substantially more stable,” he said. “It is true that we have not dismantled the financial system, and in that sense, Bernie Sanders’s critique is correct” — a reference to the Vermont senator and presidential aspirant who regularly calls to break up America’s biggest banks. “But one of the things that I’ve consistently tried to remind myself during the course of my presidency is that the economy is not an abstraction. It’s not something that you can just redesign and break up and put back together again without consequences.’
It is important to note, however, that Obama does not necessarily endorse or advocate the Vermont senator’s current policy proposals on breaking up the big banks. In many ways, his remark that the economy is “not an abstraction” that can be “broken up and put back together again without consequences” is a rebuke of Sanders’ own proposals on financial reform. This is to be expected though, as Sanders is not shy about disagreeing with the President on a few fundamental issues.
In 2010, Barack Obama signed Dodd-Frank into law, described by Whitehouse.gov as follows:
‘The most far reaching Wall Street reform in history, Dodd-Frank will prevent the excessive risk-taking that led to the financial crisis. The law also provides common-sense protections for American families, creating new consumer watchdog to prevent mortgage companies and pay-day lenders from exploiting consumers. These new rules will build a safer, more stable financial system—one that provides a robust foundation for lasting economic growth and job creation.’
Sanders admits that, even though he voted for Dodd-Frank as well, he also believes that it was merely a “modest piece of legislation” that didn’t go far enough, which he stated while introducing the “Too Big To Fail, Too Big To Exist” act in 2015. He did, however, call to expand on the authority granted by Dodd-Frank to dismantle big banks such as JP Morgan Chase or Bank of America, believing that any major failure on the part of these institutions “would pose a catastrophic risk on the United States economy without a taxpayer bailout.”
President Obama is, in many ways, being what many liberal leaning centrists might call a “realist” or a “pragmatist” in his simultaneous praise and rebuke of Sanders’ Wall Street platform. In a manner not too dissimilar from Hillary Clinton in her campaign, he is trying to paint Sanders as a man who can eloquently diagnose the problem, but fail to propose any “realistic” solutions. Yet Obama in the same breath admits basically what Sanders has been saying all along; that even through all his efforts in a “pragmatic” administration the banks are still too big and too powerful, and that they still need to be downsized. In many ways, it reconfirms Sanders assertion that Dodd-Frank was too modest.
It’s enough to make any progressive wonder if Obama, Clinton, and other establishment Democrats are simply too hesitant to actually take the bold action necessary to do what needs to be done, in order to truly protect the American people from another 2007-08 style financial meltdown.
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